Break Clauses – a costly mistake?

With changing times, property needs are also changing and some tenants are looking for ways to exit their lease early.

Sometimes it is a matter of negotiating to terminate with a willing landlord but sometimes leases contain break clauses allowing the tenant to give notice to a landlord to bring the lease to an end.

The problem with break clauses is that they are often quite restrictive and it can be easy to invalidate the break notice and miss the opportunity together.  An especially  common mistake is that a tenant pays the rent in full up to the Break Date.  The usual requirement is that rent is paid to the next quarter day.

It is important to check the landlord’s details and to make sure every requirement of the break clause is met.  Otherwise, the tenant remains on the hook past the break date for the remainder of the term and are left trying to find a replacement tenant to whom they can assign or negotiating a surrender with the landlord – neither of which are guaranteed.

Tenants should check their leases for break clauses and make a note of both the termination date and the amount of notice that needs to be given.

It is vital that tenants take professional advice in good time before exercising their break.  We would recommend taking advice at least 3 months’ before the notice needs to be served.  There will be professional costs incurred to serve the break notice but this is money well spent to avoid being tied into the remainder of the lease.

For expert advice you can trust, please contact the Commercial Property team here at Hart Brown Solicitors on 01483 887766, email us or start a live chat.

This is not legal advice; it is intended to provide information of general interest about current legal issues.

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Tamzin Mandelli

Partner, Commercial Property

Prior to joining Hart Brown, Tamzin had worked for a local authority, for both regional and national firms, and she had managed her own firm....

Partner, Commercial Property

Tamzin Mandelli

Prior to joining Hart Brown, Tamzin had worked for a local authority, for both regional and national firms, and she had managed her own firm.

With over 20 years’ experience Tamzin specialises in all aspects of commercial property including the sale and purchase of shops, offices and restaurants, landlord and tenant matters (from granting the new lease, through to the various licences for works, transfers and so on) and dealing with the eventual termination of a lease. She is also experienced at dealing with development work including option agreements and acquisitions.

Her most memorable case was the lease of some advertising space – for a well known electronics company in Leicester Square!

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