Deed of Variation For A Lease

Deed Variation For Commercial Property

This page will guide you through the lease variation process for commercial leases and answer many of your questions. You will learn about our specialist commercial leasing lawyers can help you make changes to an unsuitable or outdated lease while avoiding legal pitfalls.

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What is a deed of variation on a leasehold property?

A commercial lease deed of variation enables a landlord and tenant to change the terms of a business lease. It is a legal document that specifies the changes that have been agreed, such as adding in a new permitted usage or removing a signage restriction.

The deed supplements the existing lease and the two documents must be read together to understand all the conditions of the commercial tenancy. Often, your solicitor will annotate the original lease to show that it has been varied, so that everyone is aware of the changes.

Commercial leases often last for 10 or more years. The original lease may no longer serve the business goals of the landlord or tenant and frequently the parties will agree that the original lease must be varied to reflect changes in circumstance.

Our specialist team of commercial lease lawyers has decades of experience dealing with commercial lease variations. We can help you negotiate a worthwhile lease restructure that reflects current market conditions and the current and future needs of your business.

Common reasons for a deed of variation on a lease include:

  • The landlord and tenant have agreed to add or delete a clause in the lease
  • Extending the term of the lease
  • Changing the amount of ground rent payable
  • Altering terms related to how the property can be used
  • Updating arrangements for property maintenance and repairs
  • Revising who is responsible for insuring the property
  • The lease does not include sufficient rights, for example, access rights for service deliveries, or the right to place plant and equipment on the outside of the building
  • The lease plan does not properly identify the premises and the parties want to update it to current Land Registry standards
  • To correct a mistake in the lease.

When you vary the lease by deed, you permanently change it. This means it will bind future landlords and tenants of the property.

Is there an alternative to a deed of variation on a lease?

Often, it is possible to achieve your business goals in a simpler manner. For example, a landlord may write a letter allowing the tenant to pay the rent monthly, even though the lease requires quarterly rent payments. The concession is given to the current tenant only, so when the tenant assigns the property the permission will fall away.

What is the process for a deed of variation on a lease?

A commercial lease can only be varied if both parties agree to it – that is the starting point. A specialist commercial leasing solicitor can help you negotiate the changes you are seeking, and then put the agreed changes into a binding legal document.

The process involves:

  1. Both parties agree on the changes
  2. Our solicitors draft the deed of variation
  3. Both parties sign the document
  4. If necessary, the deed is registered with the Land Registry

Commercial lease variations can be much more complex than they first appear. A deed of variation must be carefully drafted to ensure that it accurately reflects the agreed changes and is legally binding. Without specialist guidance from a commercial lease variations solicitor, you may accidentally surrender the lease or put in place clauses that are onerous.

They can also advise whether a formal deed of variation is the best route forward, or whether you can achieve the same goal through a simple letter or licence.

Our commercial property lawyers can walk you through the legal minefield while ensuring that all issues are protected. Whether you’re an established landlord, new to the process or a tenant requiring variations or corrections to your lease, we can give you timely and pragmatic advice tailored to the needs of your business.

What are the disadvantages of a lease deed of variation?

If a variation extends the term of the lease, or increases or decreases the extent of the premises, then this is considered to be a “deemed surrender and regrant.” In other words, it is implied that the tenant’s interest is transferred back to the landlord, and an entirely new lease is brought into being.

This has unexpected and far-reaching consequences for both parties:

  • Security of tenure exclusions are not carried through to the new lease, so the tenant may gain a legal right to renew the business lease at the end of the term even though this was not what the parties intended
  • Previous tenants and guarantors will be released from their liabilities under the original lease
  • The regrant almost certainly will trigger a new Stamp Duty Land Tax charge.

As you can see, the law surrounding deeds of variation can be complex. It is critical to take legal advice from a specialist commercial leasing solicitor to avoid any unintended, and potentially disastrous, consequences for your business.

Other services related to lease deed of variations

Why choose Osbornes for a lease deed of variation?

For more than 40 years, our firm has provided a single source of commercial property advice and assistance, focusing our efforts on achieving the best results for landlords and tenants. Our priority is getting your lease variation concluded as smoothly and quickly as possible, ensuring minimal disruption for your business.

We are highly rated by independent legal directories Chambers and Partners, Legal 500 and The Times for our significant experience in this field. Our firm has been commended in The Times ‘Best Law Firms’ guide and we pride ourselves on our swift and responsive approach.

We can help you with such issues as:

  • Deciding what changes you need to be put in place to meet your business needs or protect your investment?
  • Whether the changes you are seeking are both legally and commercially viable?
  • Deciding the best way to document the lease variations. Is a deed of variation required or can we achieve the same goals through simpler means?
  • Deciding how the variations impact the remaining terms of the lease and your ability to assign the lease or sell the property in the future?

Usually, we are able to offer a fixed fee for this service. Please contact us for a confidential discussion and a no-obligation quote today.

To speak with one of our solicitors, contact us by:

  • Filling in our online enquiry form; or
  • Calling us on 020 7485 8811

Contact our Commercial Property Lawyers

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