A lease (otherwise known as a "tenancy" or "demise") is basically a contract between two parties — the landlord and the tenant — and is enforceable by recourse to the civil courts (ie the High Court or county court).  If the lease is breached by either party, the court can award compensation and/or compel the defaulting party to perform a term or refrain from an offending activity.  European law has had little impact, as yet, on commercial leases.

The person granting the lease (the landlord or lessor) must have an interest in the land at least as good as the lease granted to the other person (the tenant or lessee).  For example, a freeholder (the reversioner) may grant a lease for as long a period as he or she chooses but a tenant owning a lease for, say, 99 years cannot grant another person a lease for a period in excess of 99 years.  Where a tenant (or sub-tenant) disposes of his or her entire interest in the lease (or underlease), this is known as an assignment.

Where an existing lessee grants a lease to a third party, the latter lease is commonly referred to as an underlease.  An underlease (or subtenancy) occurs when the original tenant creates a lease of a lesser duration than the one (the head lease) that he or she has.  If the underlessee then grants a further (and shorter) lease, that further lease is called a sub-underlease.  There is no limit to the number of subsidiary leases which can be granted.

The old-fashioned and complicated wording of leases presents the layman with great difficulty in interpreting contents.  Although the basic form has changed very little over the years, each lease is unique to the particular property.  Specimen leases, eg those drafted in 1996 by the Law Society, are available from law stationers.  These can be amended to suit a particular transaction.