Can I replace existing lease with new lease?

[tomblack]

Hi

I am buying the freehold of a small office block as a long-term investment. There is a good tenant in place and they want to continue as tenant once the current lease ends in about two years time. Ideally, I would like to have a new lease drawn up to take effect when I complete the purchase (in about two months) and to replace the existing lease. The terms would be similar to the existing one; 15 years, 5 year rent reviews etc.

Assuming the tenant agrees, is it possible for a new lease to be implemented before the existing one expires and the existing one would then be cancelled?

The reason I want to do this is because my lender will offer me better terms if there is a lease in place for the term of the mortgage.

regards tom

[Editor]

There is no reason why you cannot terminate the existing lease and agree a new term if you can get your tenant's agreement to this.
Another option which could save money, as you are happy with the terms, and providing you can get agreement from your tenant, is to have your solicitor draw up a short supplemental agreement extending the existing lease.
This is usually a two page or so document which is signed by both parties and attached to the original documents. I have regularly renewed leases in this way.
Don't forget there is now a requirement to register all leases with the Land Registry if they are over 7 years. It's the tenant's responsibility to register, but you will need to supply a lease plan - see:
http://www.landlordzone.co.uk/dir/planning-services.htm