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A freeholder (‘the Landlord’) granted a ten-year headlease to a tenant. After a year, the tenant, with the Landlord’s consent, granted a sublease for a term of five years to a subtenant. Two years later, the tenant surrendered its headlease to the Landlord. Which of the following statements best describes the position of the subtenant?
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When a tenant surrenders their headlease to the landlord, the subtenant's interest in the property is not automatically extinguished. Instead, the subtenant becomes the immediate tenant of the landlord under the terms of the existing sublease. This principle ensures that the subtenant retains their rights and obligations under the original sublease agreement, even though the headlease has been surrendered. This rule is meant to protect the subtenant's interest and provide continuity in their tenancy.
Key Point: This question highlights the legal principle regarding the effect of a tenant's surrender of their headlease on a subtenant's sublease. Understanding the continuity of the subtenant's rights and obligations under the original sublease is crucial for landlords, tenants, and subtenants involved in property leasing arrangements.
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