A Lease Regear replaces one lease with a new one, on renegotiated terms. Rather than a lease renewal, which happens when a lease has expired or is just about to expire, a lease regear will normally be proposed when there is some time before the lease expires, e.g. 3 years before the expiry date.
The Landlord or Tenant are free to propose terms for a new lease at any time, this may become more attractive as the commercial goals of either Landlord or Tenant change over time.
Mutual gain is at the heart of any lease re-gear or restructuring, with neither party obliged to conclude a transaction, therefore a considered approach is needed.
Advantages for a Landlord include :
The advantages for a tenant include:
Once the terms are agreed there are typically two ways to complete the process – either by the issue of a new lease of by varying the existing lease.