Break options: Some common questions answered

05 Oct 2021

The requirements of enforcing a break in a lease can be difficult to navigate, and which if not followed correctly can result in a missed opportunity to end a business tenancy early; an opportunity which in the current Covid climate, tenants cannot afford to dispense with. The below scenario highlights some of the questions regularly asked regarding break options. 

Q:    I sent an email to my landlord to terminate our lease pursuant to a break clause with weeks to spare. I have asked the landlord to confirm receipt but the landlord has not responded. Is the landlord obliged to?

No. The landlord is not obliged to respond. Furthermore, if the lease states that services of notices by email are not valid, your notice is of no effect.  

Q:    Ok. I have therefore delivered to the landlord’s registered office a written notice which has been signed for, a permitted service by the lease. It has been served a day late. However, it is only a day late and the landlord knew from the previous email notice that the I (as tenant) was going to end the lease and cannot therefore object, can they?

Yes, the landlord can object. Time is of the essence of break clauses and even if your notice is a day late, it is of no effect. 

Q:    The lease specifies that a break notice must be printed on blue paper. I have given notice on ordinary white paper. Surely the landlord cannot object as it is clear what the tenant’s intention is?

Possibly. Sometimes, the courts will help you in circumstances like this, but every case will turn on its facts. Generally speaking the lease requirements must be followed, and if they are not you risk challenge and potential expensive litigation.    

Q:    I have served my break notice in time and validly, which the landlord has accepted. The break date has arrived, I  have vacated, and the shop has been cleared of stock, fixtures and fittings, other than some shop shelving along a wall. The landlord has said that the condition requiring vacant possession to be given has not been complied with. Surely the presence of a couple of shop shelving units cannot prevent me from exiting the lease?

Yes it can, unless the landlord waives compliance with any condition (which it is not obliged to do under normal circumstances).    

Q:    The break date in the lease is 1st December. On the September quarter day, I paid rent from 29th September to 1st December. The Landlord is saying that because the full quarter’s rent has not been paid, the break option has not been validly exercised. Surely this cannot be right, as there are no arrears?

Yes it is right because the lease says it is a condition of the break right that all rents due and payable have to be paid. On this wording the tenant has no room to apportion the rent. 

Q:    The break date is 1st December. I carefully paid the landlord the full quarter’s rent on 29th September. The break date has passed and the landlord has accepted the break has been validly exercised but is refusing to repay the rent from 1st December to 24th December. Surely he must do this as the lease came to an end on 1st December?

No, the landlord is not obliged to refund such apportioned rent. For the landlord to be obliged to do this, the lease must contain a specific obligation to do so.

We can help you with all of the above areas that have been discussed in this Q&A, should the need arise. Please get in touch with your usual contact at DMH Stallard or with Nigel Skevington, Real Estate Partner, by email or by phone on 020 7822 1555.

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