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An implied surrender and re-grant taking effect by operation of law can occur if an agreed variation of the terms of a lease is so fundamental that the law regards it as being wholly inconsistent with the original lease. The original lease is deemed to have been surrendered and a new lease is deemed to have been granted between the parties on the terms of the lease as varied.

An inadvertent surrender and re-grant by operation of law can have significant adverse consequences for both the landlord and the tenant—see ‘Consequences of inadvertent surrender and re-grant’ below.

This Practice Note covers:

1. •

   variations to lease terms that do, or do not, trigger surrender and re-grant by operation of law, including:

   1. â—¦

      ‘increasing’ the demise or ‘extending’ the term

   2. â—¦

      ‘decreasing’ the demise or term

   3. â—¦

      increasing or decreasing the rent

2. •

   consequences of an inadvertent surrender and re-grant

3. •

   how to ‘extend’ the term or increase the demise without triggering a deemed surrender and re-grant, and

4. •

   how to deal with changes required