Are you letting out or letting go of your property?
Granting a long lease for a premium will provide you with funds to develop or invest, but beware that you do not also let go of the freehold…
Published 12 September 2016
It is great news for landlords when the terms of a new lease are agreed with an existing tenant before the current lease has come to an end. There will be continuing income from a known and trusted tenant, and no need to deal with dilapidations or spend time considering new fit out works.
However, even if the agreement reached seems straightforward and the new lease is to be in the same form as the current one, there are still some important considerations for landlords before entering into the new lease.
A lease entered into before an existing lease has expired, which is to take effect on expiry of the existing lease, is called a reversionary lease.
Before entering into a reversionary lease landlords should consider our previous tip on reversionary leases and the following:
As always, however simple you think a transaction may be, it is wise to seek legal advice as early as possible when you are thinking about entering into a reversionary lease.