Solicitor Ed Williams, in our Commercial Property & Planning team, explains what a Deed of Variation of a Lease is.
A Deed of Variation is a legal document used when a Landlord and Tenant agree to alter the terms of an existing lease. Rather than entering into an entirely new lease, this document serves as a formal mechanism to record the changes both parties have mutually agreed upon. Deeds of Variation are a common and useful tool when dealing with commercial leases, but they must be used with care.
What can they be used for?
A Deed of Variation can be used to make a wide range of changes to an existing lease, including:
- Changing rent or rent review mechanisms;
- Adding or removing clauses;
- Updating repairing obligations;
- Amending rights of access or use of shared areas;
- Modifying permitted use of the premises.
These changes may be required due to evolving business needs, tenant requests, or changes in the property itself. The key advantage is that the core lease remains intact, while only the specific clauses that need to be changed are updated.
How are they dealt with?
Once the parties agree to the proposed changes, a solicitor will draft the Deed of Variation. If the lease is registered at the Land Registry, the deed must also be registered too.
When not to use?
A Deed of Variation should not be used where the variation will result in the term of the lease being extended or additional property being added to the demise (or being substituted for existing property). In these circumstances, the variation will amount to a surrender and regrant by operation of law which could have unintended consequences such as giving the tenant security of tenure under the Landlord and Tenant Act 1954, additional tax becoming due and difficulties with HM Land Registry amongst others. Where seeking to vary the term or demise, a new lease may be the more appropriate mechanism.
Conclusion
A properly drafted and executed Deed of Variation can provide a simple, effective way to adapt a lease to changing circumstances while maintaining legal clarity and protection for both Landlord and Tenant. However, it must be used correctly to avoid unintended legal consequences. Given the potential complexities involved, parties should always seek legal advice.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
