The lessee and lessor can agree to vary the terms in a lease without creating a new commercial lease document. The existing lease can be altered by a ‘variation of lease’.
If there is a mortgagee on the title, the lessor will have to get the mortgagee’s consent. The lessor will generally try to pass the cost of doing so onto the lessee.
Some common reasons for variations are:
- to increase the term of the lease;
- to record a change in rent or
- changes to use.
A variation of lease can be used to record the exercise of an option for renewal instead of registering a fresh lease for the option term. This must be done prior to expiry of the lease term.