new lease terms
📖 What is new lease terms? Meaning and definition
When a leaseholder applies for an extended lease or a new lease, the conditions of that new agreement, known as 'new lease terms', must be determined. These terms can involve various aspects of the tenancy, from specific clauses about how the property can be used to the precise definition of what parts of the building are included in the demised premises. For instance, a landlord might propose new clauses restricting underletting to assured shorthold tenancies or similar agreements that do not grant security of tenure, or they might seek to introduce rules about noise levels, such as playing musical instruments.
Leaseholders can also propose amendments, though they may not always pursue them. The First-tier Tribunal often becomes involved in determining these new lease terms, especially when the landlord and tenant cannot agree. The Tribunal's role is to decide which proposed terms should be included in the new lease, taking into account the existing lease and any statutory requirements or allowances, such as those under the Leasehold Reform, Housing and Urban Development Act 1993.
In practice, this means that when a new lease is being negotiated, both parties can suggest changes. These changes might define what is included in the property (e.g., specific plasterwork, window frames, or even parking spaces) or impose new covenants (rules) on the tenant. The Tribunal will review these proposals, often considering extensive documentation, to make a binding decision on the final wording of the new lease terms.
📋 Requirements
- An application for a new lease or an extended lease is being made.
- There are proposed amendments or additions to the existing lease agreement.
- The parties (landlord and tenant) may not agree on the proposed terms.
- The proposed terms must be considered in light of existing lease provisions and relevant legislation.
📝 Procedure
- The leaseholder applies for a new lease, often under the Leasehold Reform, Housing and Urban Development Act 1993.
- Both the landlord and the tenant propose amendments or new clauses for the draft lease.
- If an agreement cannot be reached, an application is made to the First-tier Tribunal for determination.
- The Tribunal reviews the proposed amendments and relevant documents, such as the existing lease and plans.
- The Tribunal makes a decision on which new lease terms will be included in the final lease agreement.
💡 Examples
- A landlord sought to add a new clause to an extended lease, requiring that any underletting must be an assured shorthold tenancy, ensuring the undertenant does not gain security of tenure.
- The Tribunal determined that a new lease should specifically include the plastered coverings of ceilings and internal surfaces of window frames as part of the demised premises.
- An application was made to the Tribunal to include the demise of parking spaces used by occupiers in the proposed new leases for flats.
- A landlord proposed new sub-clauses in a lease to prevent tenants from making noise, such as singing or playing musical instruments, that would be audible outside the property.
📚 Legal basis
- Leasehold Reform, Housing and Urban Development Act 1993
❓ Frequently asked questions
What kind of changes can be considered 'new lease terms'?
New lease terms can include a wide range of changes, such as new rules about how you can use the property (e.g., restrictions on underletting or noise), or clarifications about what parts of the building are included in your leased property (e.g., specific structural elements or parking spaces).
Who proposes these new lease terms?
Both the landlord and the tenant can propose new lease terms. For example, a landlord might want to add new covenants, while a tenant might seek to include additional areas like parking spaces in their new lease.
What happens if the landlord and tenant disagree on new lease terms?
If an agreement cannot be reached between the landlord and tenant, the matter can be referred to the First-tier Tribunal. The Tribunal will then review all proposals and make a binding decision on what terms will be included in the new lease.
Are new lease terms only relevant when extending a lease?
While often discussed during lease extensions, new lease terms can also apply when a completely new lease is being granted, or when existing leases are being acquired and their provisions need to be determined.
Can the Tribunal reject proposed new lease terms?
Yes, the Tribunal can reject proposed new lease terms if they are deemed unreasonable or not in line with the existing lease and relevant legal provisions. They will make a determination based on the evidence presented.
Do I need a solicitor to deal with new lease terms?
While self-represented litigants can apply to the Tribunal, dealing with new lease terms can be complex. It often involves understanding legal documents and statutory requirements, so it is advisable to consult a qualified solicitor for guidance.