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Lease restructure

Restructure – a chance to recalibrate

Any change in circumstances (such as the recent pandemic) is a catalyst for landlords or tenants to seek a change in the terms of a lease.

The ‘restructure’ could apply to rent, varying the demise, removing break option clauses, capping/controlling service charges, etc.

Therefore if you are considering a lease restructure, be clear what you want to achieve before you commence negotiating. When an agreement has been reached and the Heads of Terms signed, a Deed of Variation to the original lease will have to be drawn up.

In an uncertain market, restructuring a lease allows tenants to:

  • Recalibrate their property strategy for the medium/long term
  • Enhance their bargaining position as landlords are reluctant to incur the expense and time to find a new tenant – they would rather negotiate changes to retain an existing one

A successful lease restructure requires good (‘market comparables’) intel, proven negotiating skills and a deep understanding of the process. This is something which is best left to professionals.

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