Docklands Solicitor

Latest legal news from Docklands Solicitors, Kaslers Solicitors LLP.

Wednesday, 29 June 2011


Exercising Break Clauses and the Usual Pitfalls

A break clause in a commercial lease allows either or both parties to end the lease prematurely i.e., prior to the expiration of the term.

There are a number of pitfalls for a tenant in the correct exercise of the break clause.

The clause is usually drafted to stipulate that the tenant can break the lease only if all the covenants under the lease have been complied with. Therefore, the landlord usually insists that the tenant must be in full compliance of the covenants of the lease at the time of exercise of the break clause. This means for example that if the tenant is in breach of the repairing obligation under the lease, the tenant cannot exercise the break clause.

The timing of the notice is another crucial factor in the correct exercise of the break clause. The courts have taken the view that time will be of the essence unless the break clause states otherwise. To this end the landlord may require a strict timetable and a specific method of service of the notice to break the lease.

The break clause usually stipulates that at the time of its exercise the tenant must give vacant possession of the premises. If the tenant is unable to do so, the landlord may insist that the lease has not come to an end. The courts have interpreted “vacant possession” in a narrow sense as “the property was empty of people and that the purchaser was able to assume and enjoy immediate and exclusive possession, occupation and control of it.” This means that the tenant cannot be engaged in repairing the premises after the tenancy has come to an end in accordance with the terms of the break clause.

Alireza Nurbakhsh:  Commercial Property Solicitor 0845 270 2511

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Call Michael Breeze on 07900 195 195 or call 0845 270 2511 to if you need legal advise about any of these issues

Kaslers Solicitors LLP is a limited liability partnership registered in England under LLP no. OC310653; authorised and regulated by the Solicitors Regulation Authority under reg no 408936; governed by professional rules set out in the Code of Conduct click here to visit and has its registered office / main trading address at Suite 3, 10 Churchill Square, Kings Hill, West Malling, Kent ME19 4YU - tel: +44 (0)845 270 2511; fax: +44 (0)845 270 2513; DX 92863 West Malling.
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