What Is A Lease Re-Gear and Its Benefits

What Is A Lease Re-Gear and Its Benefits

If you’ve long been speculating the current trends in the market and the industry, you’d know that the current market conditions are quite volatile. In comparison with many years back, there’s a lot of risks now involving almost all industries. Economic changes brought about by various sectors of global industries are affecting even the most stable of all markets. And, this includes the real estate industry.

With that, landlords and other key players in the real estate market are constantly looking for changes and developments to help make rental situations easier and more manageable. One of these key changes is known as lease re-gearing.

What does a lease re-gear mean? What are its benefits? Read through below to find out more.

What’s A Lease Re-gear?

A lease re-gear refers to a re-negotiation of the lease agreement during its validity period. It’s important to remember that a lease agreement is a binding contract. It’s mandated and bound by law. Hence, it’s not just something that you can rescind or go against at will.

A lease re-gear is the best recourse for a win-win solution for both parties. This is like an early renewal whereby the terms of the lease contract are reviewed and negotiated before it expires. In most instances, a lease re-gear is positive. This is such that it leads toward an extension of the tenant’s stay in the leased or rented premises.

Before you proceed with the decision to go for a lease re-gear, it’s very important to have an understanding as to whether or not this is for you. Visit this website to learn more,

What Are The Terms Being Amended In A Lease Re-Gear?

A lease re-gear generally refers to an amendment of the terms in the contract. The conditions may differ based on the different properties subject to the agreement. But, universal terms that may be affected include:

  • The obligations to repair
  • The amount of rent payable
  • The provisions of the lease and other conditions that may be questionable
  • The duration and length of the lease

In essence, lease re-gearing is a positive solution to the landlord and the tenant for them to achieve their individual goals. You only need to ensure that the above-enumerated terms are adequately addressed.

What Are The Advantages Of A Lease Re-Gear?

As mentioned earlier, a lease re-gear is advantageous for both the landlord and the tenants. Some of these advantages include the following:

Benefits to the tenant

  • Additional flexibility by adding other terms advantageous to the contract
  • Ability to review the existing terms of the agreement to ensure that it meets with current market conditions
  • An extended stay in the property
  • Increased cash reserves, such as rent-free deposits

Advantages to the landlord

  • Reduction in service charges as to your property especially if there’s a steady or constant occupant
  • Ease of offering rental concessions for capital gains
  • Consistently having a client they can trust, which makes for an increased rental income
  • Opportunity to increase the investment value of your property

Is It Necessary To Document A Lease Re-Gear?

Is It Necessary To Document A Lease Re-Gear?

Yes, it’s necessary to document a lease re-gear. This is just like any other contract whereby any changes that you make have to be in writing.

The best way to document a lease re-gear is through the following means:

  • Surrender of the existing lease, so that a new agreement can be made
  • Amendment of the alterations in the re-geared lease agreement
  • A side letter on the current lease agreement if the re-gears are only minor
  • Modification or removal of the alienation provisions
  • Granting of a revisionary lease

If you’re to have a lease re-geared, the most important tip for you to remember is to have it done correctly. This isn’t a process that you can do yourself. It’s best if you have the assistance of commercial, contracts, or property lawyers by your side. Doing so helps ensure that you’re able to comply with all the necessary procedures and that all statements re-geared are correct and within the limits of the law.


The key to an excellent lease contract and lease re-gearing has to do with a deeper understanding of what it takes to keep a lease contract well and binding. A lot of this also has to do with ensuring that you know the ins and outs of lease contracts and the law by which it adheres to.

Lease re-gearing can spring out of many and varied reasons. But, the most important thing to remember is that at the end of the day, lease re-gearing is a win-win for both the landlord and the tenant. It’s one of the best solutions available to both parties when alterations need to be made.

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