Concurrent leases

A concurrent lease is a lease of the landlord's rights and obligations under an existing lease. This type of lease arises where the landlord grants a second lease over the same property, which is “concurrent” with the term of the existing lease. The result is that the second lessee (eg under the concurrent lease) effectively becomes the lessor of the first lessee under the original lease. Concurrent leases are very flexible and may be useful in the following circumstances:

• • it enables a landlord to divest itself of the management of a property or of a particular lease;
• • taxation advantages; and
• • as a potential vehicle to resolve disputes between the landlord/vendor and the tenants during the sale of a commercial building, which is subject to existing tenancies, and the landlord/vendor is not prepared to deal with issues arising from the leases.

See Concurrent leases.