Deemed surrenders and re-grantsMost of the provisions in the Act apply to tenancies granted after 1 January 1996.

However, in the case of a lease granted before 1 January 1996, s.1(5) of the Act provides that if the lease is varied in such a way that there is a deemed surrender and re-grant, the lease will then be treated as a new tenancy for the purposes of the Act.

While it is not possible to be certain whether a particular variation will constitute a deemed surrender and re-grant, it is clear that an increase in the extent of the premises demised or in the term for which they are to be held will result in a deemed surrender and re-grant.

This principle was reinforced recently by the Court of Appeal decision in the case of Friends Provident Life Office v British Railways Board [1995] EGGS 140.Landlords need to be advised about the risks of inadvertent s urrender as a result of a variation of the lease and the risk of losing rights such as original tenant liability and rights against former tenants and guarantors as a possible consequence of the variation.User covenantsS.3(5) contains provisions which appear to create a new concept in the enforceability of covenants and take them outside the scope of contract law.

The subsection provides: 'Any landlord or tenant covenant of a tenancy which is restrictive of the user of land shall, as well as being capable of enforcement against an assignee, be capable of being enforced against any other person who is the owner or occupier of any demised premises to which the covenant relates, even though there is no express provision in the tenancy to that effect.'This would have the effect of making a covenant restrictive of user enforceable against a subtenant or licensee but would also have the effect of making it enforceable by one tenant of the premises against another tenant of the premises which are subject to the restrictive covenant.

For example, in a lease in a parade of shops, the landlord covenants with Tenant A that he will not permit the user of any units for a particular purpose.

In the leases of adjoining premises to Tenant B and others, the landlord includes covenants restrictive of that particular user.

In the event of breach by Tenant B, Tenant A can enforce the restrictive covenant directly against Tenant B even though there is no contractual relationship between the two tenants.

Overriding leaseUnder s.19 a former tenant, or his guarantor, may call for an overriding lease provided that he has paid any arrears of a fixed charge pursuant to a notice under s.17 of the Act.

Notices under s.17 are to be served by the landlord.

'Landlord' is defined in s.17(6) as including any person who has a right to enforce payment of the charge.

This definition applies to the landlord himself, that is the person entitled to the reversion expectant immediately on the expiry of the term of the lease in question.

The definition would also include, for example, a receiver.

It would not, however, appear to apply to a person who has paid arrears of a fixed charge, and so on, pursuant to an indemnity covenant.Consider a situation where the landlord has granted a lease to A who has assigned to B who has assigned to C.

B has given an indemnity covenant on assignment by A, and C has defaulted.

If the landlord serves an s.17 notice on A and A has paid the total amount due and then reclaimed the amount from B under the indemnity covenant, A would be entitled to call for an overriding lease having paid in full in accordance with s.17 but B would not as B's payments would have been made under an indemnity covenant and not pursuant to s.17.

Ss.17 to 20 of the Act apply to existing leases as well as those granted after the Act comes into force.Mortgagees in possessionPrior to the Act, the position of a tenant's mortgagee in possession was that as the successor in title to the mortgagor, the mortgagee was subject to the burden but also had the benefit of the covenants so far as they touched and concerned the land.

Where repairs were concerned, the mortgagee in possession was not judged by the same standards as the tenant.

He should do such repairs as could be paid for from the balance of the rental income after his interest has been paid but need not increase the debt by laying out sums on repairs from the rents, although he must not render the lease liable to forfeiture.S.15(4) of the Act provides that where any tenant covenant in a lease or right of re-entry contained in a lease is enforceable against the tenant, it shall also be enforceable against the mortgagee in possession under a mortgage granted by a tenant.

The effect is that, in theory at least, the mortgagee of the tenant in possession will be in a more onerous position now that the Act has come into force than he or she was previously and this is something on which the solicitor acting for mortgagees, including those acting on a residential lease, should be advising clients at this stage.Rent reviewThe hypothetical lease providing for a rent review which takes place now the Act is in force must be a new tenancy.

This may well be to the advantage of the landlord under an old lease.