Breaking up is hard to do
Tenants must think before they break.
I have the right to break my lease, but how do I go about it?
For a tenant’s break notice to be valid, it must be served by the tenant on the landlord in accordance with the terms of the lease. If a notice is served by the wrong person and/or on the wrong person and/or in the wrong way, a court might deem that it is invalid. In the current market, landlords are more likely to argue that notices are invalid so as not to lose their tenants and possibly face a void.
The first thing to establish is “who is the tenant?". This might not be the occupier of the property. The classic case of this is where an individual enters into a lease and then a few years later sets up a company to run the business. Unless the lease has been formally assigned to the company, the individual will still be the tenant (except in very limited circumstances) even if the company has been paying the rent. It is therefore the individual who needs to serve the notice, not the company. Also, if there is more than one tenant, notice needs to be given on behalf of all of them, not just one.
So “who is the landlord?” The landlord might not be who you think it is, for example where the landlord has transferred the property to a group company. Where the landlord transfers the property, it should serve notice of the transfer on the tenant. However, if the tenant does not understand the notice, it might not appreciate that it has a new landlord (particularly if there is no change in the agent who collects the rents). Therefore, it is important that investigations are carried out to establish the identity of the landlord. Searches at Companies House and the Land Registry are a necessity.
Having established the identities, the practicalities of when and how to serve the notice need to be considered. The lease will set out the break date details and should be read carefully alongside the service of notice provisions.
Many break clauses only allow the tenant a one-off opportunity to terminate the lease. Therefore, serving an invalid notice could be a very expensive mistake as the tenant may well find itself liable for the rent and its other obligations under the lease for the remainder of the term.
This article contains information of general interest about current legal issues. It does not give legal advice and specific advice should always be sought about your particular circumstances. We will be happy to assist.
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