Lease Downsizing for Commercial Occupiers - The Options Available

Introduction

Many commercial occupiers now demand the flexibility to reduce their space in future, if required. While in principle the idea of being able to ‘lose a floor’ is simple, the practice is not always so. There may be a question mark over whether the arrangement needs to be contracted out of the 1954 Act. That in itself may be commercially unacceptable, while the alternative of side-by-side leases involves careful drafting in relation to alienation, forfeiture and rent review, among other issues.

Practical issues upon reducing the space will include splitting the rent and reinstating alterations. If the reduction requires any lease variations, guarantors may be inadvertently released. Lease renewal may appear to be another opportunity to reduce the extent of the demise, though this cannot be guaranteed, and tenants may instead need to market with a view to sub-letting the superfluous part of the premises, introducing issues of landlord’s consent.

What You Will Learn

This live and interactive session will cover the following:

• Options to break as to part - do they work, and if so how?
• Side-by-side leases - drafting issues
• Release of guarantors by lease variation
• Extent of property comprised in a renewal lease
• What terms might the landlord insist upon?

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.