Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors - The Property Lawyers in Manchester on Commercial Business Leases
Please note: Not to be used or relied upon without legal advice. These notes are for illustration purposes ONLY
continued from page 10 . . .
Leases - Method of Determination
Determination - on surrender by deed
When a tenant surrenders their Lease to their immediate Landlord, who accepts the surrender, their Lease is absorbed by the reversionary estate and thus determined. A document affecting a surrender of a leasehold estate does not have to describe itself as a deed of surrender, but it must:
- be by way of a deed (though if effected by way of another document, it may still take effect as a surrender by operation of law - see section: Determination - on surrender by operation of law)
- contain the wording which clearly shows that the tenant is surrendering the Lease.
Also, the Landlord must consent to the surrender. This can be established by either:
- the lodging of a letter of consent
- the landlord applying to close the registered leasehold title and/or cancel notice of the Lease from the registered reversionary title, or
- the deed being executed by both the Landlord and the Tenant
How to make the application
In addition to the documents required, as stated in section: Points to consider on all applications, Conveyancing Solicitors and Property Lawyers should lodge the original deed of surrender or other deed affecting the surrender.
Stamp duty or stamp duty land tax
A surrender of a Lease will normally be a 'transaction' for the purposes of stamp duty and stamp duty land tax. Conveyancing Solicitors and Property Lawyers will therefore need to take the appropriate action depending upon which provisions apply to the surrender.
- for transactions dated on or before 30 November 2003, stamp duty will apply and therefore:
* if the application includes an instrument of surrender for value which attracts stamp duty, Conveyancing Solicitors and Property Lawyers should lodge the duly stamped instrument
* if the application includes an instrument of surrender for value which requires adjudication, Conveyancing Solicitors and Property Lawyers should lodge the instrument after it has been adjudicated by HMRC.
* if the application includes an instrument of surrender for value which does not attract stamp duty and, pursuant to regulations made under the Stamp Duty (Exempt Instruments) Regulations1985 does not have to be produced to HMRC first, Conveyancing Solicitors and Property Lawyers should lodge the appropriate form.
* if the application includes an instrument of surrender not for value, the appropriate certificate under the Stamp Duty (Exempt Instruments) Regulations 1987 should accompany the application.
- for transactions dated on or after 1 December 2003, stamp duty land tax will normally apply and therefore:
* Conveyancing Solicitors and Property Lawyers should lodge a land transaction return certificate or self certificate. However, if a new Lease of the same Property has been granted in consideration of the surrender, or a deed of variation of a Lease takes effect as a surrender and re-grant, a land transaction return certificate or self certificate is not required in respect of the surrender, or
* (if stamp duty applies to the transaction and the instrument has been dealt with in accordance with the stamp duty provisions) Conveyancing Solicitors and Property Lawyers should lodge a letter explaining why stamp duty (rather than stamp duty land tax) still applies to the transaction. This may be the case where, for example, the transaction was effected pursuant to a contract entered into before 11 July 2003.
Determination - on surrender by operation of law
When a tenant surrenders their Lease to their immediate Landlord, who accepts the surrender, the Lease is absorbed by the reversionary estate and thus determined. Sometimes a surrender of Lease does not take place by deed by is affected by operation of law, ie as a result of the actions of the parties. In this instance Conveyancing Solicitors and Property Lawyers must supply satisfactory evidence of the acts which imply surrender - see rule 161(1) LRR 2003. Note that a surrender by operation does not take effect following an action by the tenant alone. If the surrender is be deed, see section: Determination - on surrender by deed.
(All italics in this page are Crown Copyright and reproduced here for your information with permission from HM Land Registry)
. . . continued on page 12 (Manchester Conveyancing Solicitors Property Lawyers on Commercial Business Leases 12)
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