What happens to an underlease on termination of the lease?

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Published by a LexisNexis Property Disputes expert
Practice notes

What happens to an underlease on termination of the lease?

Copyright © 2025 LexisNexis

Published by a LexisNexis Property Disputes expert

Practice notes
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The general common law principle is that, when a lease comes to an end, any underlease automatically terminates. However there are exceptions. This Practice Note covers surrender, merger, surrender and grant of a new lease, the exercise of a break in a lease or headlease, issues for the tenant, security of tenure, forfeiture of a lease or headlease and whether a sub-tenant or undertenant has the ability to seek relief from forfeiture.

Consensual termination—surrender or merger

Statute intervenes on surrender of a lease. It is a consensual termination and the tenant's interest is deemed to pass to the landlord subject to the rights of the undertenant. The effect of a merger is the same. The underlease survives and the landlord takes the benefit and burden of the underlease covenants.

Consensual termination—surrender and grant of new lease

The same applies if the lease is surrendered (by deed or by implied surrender) for the purpose of granting a new lease. The tenant or new tenant has the same rights against the undertenant and

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United Kingdom
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Underlease definition
What does Underlease mean?

A lease that takes effect under another lease.

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