Terminating a commercial lease using a break notice can offer valuable flexibility but it also carries legal and financial risks. Errors in serving the notice or failing to meet the break clause conditions can leave tenants facing costly bills.

• A contractual right to terminate a lease can be a useful option but it requires careful consideration.
• If the break clause is not exercised properly then the lease will continue, which could have disastrous consequences for you or your business.
• Break clauses often require various conditions to be met following service of the break notice. Failure to meet just one of those conditions could lead to a lease not terminating.
• The Courts require strict compliance with break clauses.
• Our commercial property dispute solicitors often advise clients on the exercise of a break clause to help manage the risks and can help:

• • advise you on what needs to be done in order to exercise the break clause;
  • advise you on the consequences of serving a break notice;
  • draft and handle the service of a notice on your behalf;
  • advise you on the steps to take to comply with the break clause conditions; and
  • advise you on the related steps you would need to consider when the lease ends, such as dilapidations liabilities.

Top Tip

Careful planning and legal review are essential to avoid unintended consequences.

Vacating your premises requires careful planning to avoid costs or unexpected legal issues. Whether triggered by growth, downsizing, or a change in strategy a well-managed exit involves reviewing lease obligations notice periods and dilapidations.

• If you are a tenant which is moving your business from one property to another it can be a stressful process, with lots to consider. It can be easy to overlook the obligations you owe under your lease and in some cases, this could lead to expensive financial consequences.
• If you are a landlord and your tenant is vacating, this can also be a testing time as you will be seeking to hold your outgoing tenant to their obligations under the lease while lining up a new tenant to move in without too much of a rental void.
• The single largest issue that you will have to deal with is likely to be dilapidations by which we mean a tenant’s liability to leave the property in the correct state of repair, decoration, condition and layout.
• A Lease and/or Licence to Alter will often set out whether a tenant is obliged to reinstate the property by removing alterations which it has made, such as partitioning. Sometimes, the obligation will depend on the landlord first triggering it, or it might apply automatically.

Top Tip

Whether you are a landlord or a tenant, it is often sensible to seek advice at an early stage from a commercial property solicitor and a building surveyor on the extent of the potential claim, your options for addressing it and any deadlines which apply to contractual provisions, such as reinstatement obligations.

Renewing a business lease involves more that just agreeing new terms, it is a time sensitive process governed by strict legal rules. Missing key notice periods or deadlines can weaken your negotiating position or even cost you your right to renew.

• The Landlord and Tenant Act 1954 (“the Act”) governs the statutory process which applies to the renewal of leases of business premises in cases where the lease has not been contracted out. A link to our short briefing note about the Act can be found here.
• If you are a tenant who is considering whether to renew its lease then it is important to take advice on your options at an early stage.
• You might be a landlord which is either considering offering its tenant a new lease or perhaps looking to regain possession so that the building can be redeveloped, for example.
• The Act entitles a landlord and a tenant to serve a notice if they want to commence the statutory lease renewal process or oppose it (in the case of a landlord). Drafting and serving the notice correctly is important. A landlord’s notice is known as a section 25 and a tenant’s is known as a section 26 request. A landlord will need to serve a counternotice in reply to a section 26 if it wants to obtain possession instead of granting a new lease. Other types of notices can also be served for achieving different purposes under the Act.

Top Tip

It is very important to take early legal advice when either serving a notice or if you have received one from a commercial property solicitor. Critical deadlines arise from the service of a notice. They are important to both landlords and tenants depending on the circumstances and if you are a business owner it is important to protect your business’s continuity and premises.

Boundary disputes can be a costly and disruptive issue for business owners, particularly if they involve shared spaces, access or land needed for business operations and continuity. Whether with neighbouring commercial properties or residential landowner’s these disputes can escalate quickly.

• Most people do not wake up in the morning and think about starting a boundary dispute with their neighbour. More often than not, the positions of fences and hedges are not given much thought and can remain the same for decades.
• One of the most common triggers for a boundary dispute is a neighbour’s plans to extend or develop their property. Often, the boundary will be disturbed during the process of the works, or one neighbour will challenge the boundary location in relation to the extension as a means of trying to stop the extension from being built.
• In some cases, you might realise that your neighbour is in possession of land that you consider is within your title or vice versa. This situation might require the consideration of the law of adverse possession. Again, this realisation is not usually stumbled upon without some other triggering event (such as a neighbour’s extension or commercial development), which causes the boundary line to be brought into focus and considered.
• Boundary disputes can be very expensive, mentally draining and often cause lasting damage to relations between neighbours. Boundary disputes are rarely resolved swiftly.

Top Tip

Boundary disputes can be complex and emotionally driven. Early legal advice, clear documentation and proactive communication are key to protecting your business interests and avoiding costly and prolonged conflict.

Rent arrears and other breaches of obligations under a lease can pose serious risks for both landlords and tenants in commercial property arrangements. For landlords, persistent non-payment or breaches may justify taking steps towards forfeiture (ending the lease early). However, this process is complex and must be handled carefully to avoid legal challenges or unintended consequences.

• From time to time, a commercial tenant will fall into arrears with its rent or commit some other breach of the lease. As a landlord, you will want to understand your options.
• It is not always in a landlord’s interest to react to a tenant’s breach by looking to terminate the lease (known as forfeiting). In a difficult market, this could leave a landlord with an empty property, saddled with business rates and keeping the property secure from squatters. There are alternative remedies which a landlord may wish to consider.
• In some cases, a landlord will want to terminate or use the threat of forfeiture as leverage. However, some landlords do not know that their right to forfeit for a breach can be waived through their actions or those of their agents.
• Equally, some landlords might not appreciate that there is a statutory notice which must be served before being able to forfeit for certain breaches or that the act of forfeiting the lease can give rise to offences being committed where the process known as peaceable re-entry is used incorrectly instead of issuing possession proceedings.
• A landlord who forfeits unlawfully could face a claim for wrongful forfeiture and have to pay damages to its tenant.

Top Tip

It is sensible to seek advice on your options where a tenant is in breach and you are considering forfeiture. Forfeiture can be an effective remedy for a landlord if it is exercised properly but there are alternative remedies available which are often worth considering.