What is a reversionary interest in a lease?
In property law, the term ‘reversion’ (returning or reverting something to its previous state) refers to the interest a party to whom a property will revert at the expiry of an agreement has in that property. When a leasehold expires, legal title to the property reverts back to the freeholder. …
Is a reversionary lease a new lease?
When the lease doesn’t have security of tenure, but the parties agree the tenant can have a new lease at the expiry of the current lease, the new lease is a “reversionary lease”: one that’s granted now but starts at some point in future. However there are a few points to consider when negotiating such a lease.
Can you forfeit a reversionary lease?
Forfeiture. This can be achieved by specific drafting in the forfeiture clause of the reversionary lease. The landlord will need to bring two sets of forfeiture proceedings and the tenant will need to apply for two sets of relief.
Does a lease contain reversionary rights?
The lessor typically retains a reversion interest in the property which will mature after the lease expires. When the lease expires, the rights of the lessee are terminated and exclusive ownership of the property returns to the lessor.
What does reversionary rights mean?
A reversionary right is a registered condition embodied in a Deed of Transfer that on the happening of a particular event, or the non-happening thereof, ownership of the property concerned reverts to the enforcer.
What is a reversion agreement?
reversion, in Anglo-American law, interest held by a prior owner in property given to another, which, upon the happening of some future event, will return to that prior owner. A reversion is itself specific property, and it can be sold or disposed of as property by the reversion owner.
What is an equitable lease?
An agreement for the grant of an interest in land on terms that correspond to a legal lease but do not comply with the necessary formal requirements of a legal lease.
What is a reversionary estate?
Reversionary interest in the context of real property or wills and estates means a reservation created in a real property conveyance that the property will revert back to the original owner upon the happening of a certain event.
Can there be two leases for the same property?
There can be only one lease at a time giving a right to possession and occupation of property. Consequently, if a landlord subsequently grants a lease of the same property to someone other than the occupational tenant, it will take effect as a concurrent lease or as a lease of the reversion.
What is a reversionary clause?
A reversionary clause in a deed is a statement that, upon the occurrence (or non-occurrence) of a specific event or events, title to the deeded property returns (reverts) to the origi- nal owner.
How does a reversionary lease avoid the reservation of benefit?
Reversionary lease schemes entered into prior to 9 March 1999 succeed in avoiding the reservation of benefit legislation so long as the lease contains no covenants of benefit to the donor, such as to keep the property in full repair. The Pre-Owned Assets (POA) charge will instead apply.
When is a reversionary lease not caught by fa86/s102a?
Where a reversionary lease scheme is entered in to, on or after 9 March 1999, it is not caught by FA86/S102A if the freehold interest was acquired more than 7 years before the gift FA86/S102A (5), so the reservation of benefit rules cannot apply and a POA charge arises, so long as the lease contains no covenants of benefit.
Can a reversionary lease have a term commencement date?
A reversionary lease cannot specify a term commencement date which is more than 21 years after its date of grant. Of course, it would be possible to grant a concurrent lease/lease of the reversion, which is also a reversionary lease.
What is a concurrent lease of the reversion?
Strictly speaking, the Retail Lease is a lease of the reversion to the Substation Lease. Concurrent leases are therefore sometimes referred to, rightly, as leases of the reversion The key point is that the Substation Lease and the Retail Lease are both granted out of the same interest. This has important consequences.