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30/10/2017

Exorcising Break Clauses - Tenants beware

With Halloween just around the corner, let’s take the opportunity to expose some of the potential horrors facing tenants who are thinking about exercising a break clause. Below are six of the most common:

A change of landlord 

To be valid, a break notice must be served on the current landlord. Land Registry office copies and rent demands can provide some certainty. 

The right to break the lease is personal to the original tenant

If a tenant has taken a lease by assignment, they must make sure that the benefit of the break clause has also been assigned. In some cases, this right is granted to the original tenant only. 

Calculating the break date

Is the break date set out clearly in the lease? If not, careful calculation might be required to establish exactly when the lease can be terminated (and by association, when the break notice must be served). 

Onerous break conditions

The tenant may be required to comply with onerous lease conditions (repair, vacant possession etc.) on the break date. Even more significantly, a tenant may need to comply with some lease conditions on service of the break notice. A tenant must leave enough time to comply with these conditions, otherwise the break notice may be invalid.

Sub leases

Has the tenant sub-let the property? If so, the subtenant’s lease may also need to be terminated by the break date. This might require the tenant to serve a landlord’s break notice on the sub-tenant.

Service of the notice

There may be onerous conditions relating to the service of the break notice. Is there a minimum notice period? Has the landlord changed address? 

What a tenant should do:

If a tenant is thinking about exercising a break clause, they should ensure that they leave enough time to deal with any onerous lease conditions and to serve the break notice in good time. 

How Howes Percival can help:

We investigate the terms of the lease, to alert the tenant to any onerous conditions and provide advice on how best to comply with these. 

We diarise important dates to ensure that notices are served on time. 

We ensure that the break notice is served on the correct person, at the correct address. 

For further information, please contact Bill Trow on 01603 580039 or by email to bill.trow@howespercival.com  

© Howes Percival LLP  Howes Percival LLP is a limited liability partnership registered in England and Wales with registered number OC 322781 and is regulated by the Law Society.