- Rent and other sums due under the lease must be paid up to the break date, even if not demanded by the landlord. “Other sums” will include service charge, insurance rent and default interest.
- Time is of the essence when it comes to serving break notices. The lease terms stipulating when the notice is to be served must be strictly adhered to, otherwise notice risks being invalidated. Mistakes are often made on this.
- The tenant must have complied with its other covenants in the lease, such as those relating to repair and decoration. In one case, the tenant’s break notice was invalid, because it had redecorated a few weeks before it was obliged to under the lease. It is on these sorts of small technicalities that attempts to exercise break options fail.
- Vacant possession of the premises must be given on the break date. Failure to do so potentially invalidates the exercise of the break option and the tenant then remains on the hook for the residue of the term. However, the meaning of vacant possession is not always clear cut and the tenant would be well advised to take legal advice as to what vacant possession means in the context of its particular lease and circumstances.
- If the lease requires it as a precondition to breaking the lease, pay the full quarter’s rent and any outstanding sums due. Take legal advice if any sums are in dispute, or the break date falls during a rental period.
- Consider carefully what other preconditions there are to exercising the break, particularly in the context of COVID-19. If vacant possession and delivering up the premises in repair and decoration are required, can this be practically achieved in the context of the Lockdown?
- Check for evidence of previous late payments and whether default interest may be due on them. If so, include a sum to cover such interest.
- Consider instructing a surveyor to advise on what repairs need to be carried out prior to exercising the break option, to ensure compliance with repair covenants.
- Carefully check the lease provisions as to how the notice must be served and take legal advice, if in doubt. Keep documentary evidence of service of the notice.
Read more of our latest blog posts, featuring all the latest legal news, analysis and opinion from our expert lawyers.
- By Lawbite Team
- December 22, 2020
In December 2020, the UK Furlough Scheme enacted in response to the Covid 19 Pandemic, was extended until the end of April 2021. A key aspect of th...
- By Lawbite Team
- December 08, 2020
Many SMEs are a tenant, but a good number also are a commercial property landlord. On both sides of the commercial property lease equation, times ...
- By Lawbite Team
- November 10, 2020
As the UK Coronavirus lockdown begins to lift, with non-essential shops being allowed to open in June and more establishments in July, SME owners w...
LawBite can help you
LawBite is on a mission to provide business legal advice that is easier to access, clearer to understand and much cheaper. Our on-line legal advice platform can quickly connect you with expert business legal advice. Our friendly, highly qualified business lawyers, solicitors and mediators will give you the guidance and reassurance that comes from customised legal advice for small and medium sized business.
Whether you are bringing or defending a legal claim, outsourcing work, want a business contract review to ward off disagreements, talk to an expert trademark lawyer, resolve a contractual dispute with methods like mediation and arbitration, or getting your new company set up and on the right footing with a robust shareholder agreement and GDPR standards, we can help you succeed.