Leases: Agreements Outside The Lease

A recent case has highlighted the difficulties that can arise when a landlord agrees to grant a concession but for various reasons does not want to include this in the lease. Often such concessions will be in the form of side letters or separate deeds and these are very likely to bind future owners of the landlord’s interest. What happens when the concession is set out in the correspondence prior to the grant of the lease?

The tenant here agreed that it would surrender a lease that still had many years to run. In return, the landlord would grant a new shorter lease and would not serve a schedule of dilapidations at the end of that shorter lease. The landlord’s agreement was set out in emails and letters confirming that a schedule would not be served. The lease did not reflect the agreement.