Landlords, letting agents and occasionally tenants, often approach solicitors with queries about errors, mistakes or clauses that are simply out of date in tenancy or lease agreements – and for legal advice on the action that can be taken to sort them out – in particular whether that contract can be amended, and the error corrected.
Need help with correcting a lease? Call us now on FREEPHONE 0800 1404544. Initial legal advice on the phone with our property specialists is always FREE.
Tenancies and leases
There is often confusion over what these two phrases mean – and the differences. In general terms (and we will use these definitions in this post), when it comes to residential property, tenants pay rent under a tenancy while a leaseholder has probably paid for a lease on a house, or more usually a flat, which can be for a given number of years – which was usually originally granted for at least 21 years (and which is often referred to as a long leasehold).
Common reasons to amend a lease agreement
If you have bought a leasehold property and your lease contains a drafting error, that mistake can cause you real problems when you’re trying to sell your property. Lenders, in particular, are very reluctant to grant mortgages in this scenario.
Amongst the more common problems are the following:
- a clerical or other mistake that needs to be corrected
- a correctly drawn lease that does not accurately achieve what was intended by those drafting it
- a correctly drawn lease that correctly achieved the parties’ original intentions, but changes in circumstances over time mean that there needs to be a change of the terms of the lease or tenancy
The errors that crop up most often include the following
- instances where the level of rent is incorrectly set out
- getting the names of tenants, agents or landlords wrong
- inaccuracies surrounding any description of the property. One recent high profile case involved a second floor flat that was actually described incorrectly as a “third floor flat”.
Can I remedy the error?
Broadly there are four ways to correct these kind of mistake:
1. indemnity insurance. This does not involve actually amending the lease – but can often be a sensible option if the error is a minor one and does not seem likely cause any practical problems
2. a deed of variation entered into with your freeholder
3. an application to the First-Tier Property Tribunal to vary your lease.
Click here to read more about our team can help you with an application to the First Tier Property Tribunal
4. “surrender and re-grant” – this refers to when landlord and tenant both agree to voluntarily surrender the existing lease and grant a new corrected version instead. However the problem with this solution is that it could prove very expensive by creating a Stamp Duty liability for the tenant (depending on the rent/premium payable for the amended lease).
Informal lease extensions – an opportunity to vary your lease.
Most informal lease extensions (as distinct from formal or statutory lease extensions) are dealt with by way of a deed of variation. This gives an excellent opportunity to update vary or correct your lease – and the process of negotiating an extended lease allows, as part of the negotiation, for variation of existing terms.
Click here to read more about lease extension.
NB we have one of the most specialist lease extension teams in the country – 5 people doing nothing but lease extension and freehold enfranchisement work.
Will a court or tribunal correct mistakes in a lease?
A signed lease or tenancy is not simply a piece of paper. It sets out what was agreed between the parties – and in most cases is therefore a contract or binding legal agreement.
In general, no matter how unfair some of the terms of your lease may be, you cannot amend those terms without the consent of your landlord.
Courts will not rule to correct or amend any contractual agreement, but only the ‘instruments’ involved. Understanding this is critical. To implement change in a written lease, it must be clear that there was an agreement reached that was not precisely set out in the written documentation. This requires proof.
If a mistake was made in the actual agreement between the parties, and that agreement was in due course accurately set out in the written lease, it is not possible to seek “rectification” ( ie correction) of that lease.
What is construction?
What evidence is required for rectification?
If you are looking for rectification to correct an error in your lease, you will need to prove that both you and the other side both actually agreed on a deal that is not the same as that recorded in the leasehold or tenancy agreement.
Courts are often very reluctant to accept just oral proof of negotiations prior to the lease being actually drafted, which differed from the terms contained in the final written version. Written evidence is often required by the court to justify any lease amendment.
Making sure that your lease is correct at the outset is therefore very important. Rectification of an incorrect document is to be seen only as a last resort.
However, it’s well worth noting that if both parties agree to any amendment, they are able to correct any mistake by entering into a deed of rectification.
Can a lease be changed by the freeholder?
No – the freeholder doesn’t have power to unilaterally alter the lease. A lease can only be changed with the agreement of both the freeholder and leaseholder or, as indicated above, the terms of the lease can sometimes be changed in an application to the court or tribunal.
And if your landlord does try to vary the lease, or act as if variation taking place, then it’s likely that this would be considered a breach of your lease – which as a breach of contract between two parties can be enforced by the courts.
Looking for expert legal advice on amending an incorrect lease? Call us today
For FREE initial phone advice about amending or correcting your lease;
- Call one of our team on FREEPHONE 0800 1404544 or on (01722) 422300
- E-mail us using the online enquiry form below: