Commercial Property Solicitor

For more information contact
Jonathan Senior
0114 253 6543 | email Jonathan
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Ironmonger Curtis LLP
Registered office:
Edmund House,
233 Edmund Road,
Sheffield,
S2 4EL

0845 225 2635
0114 253 6559
info@ironmongercurtis.com

VAT number 852641622

Ironmonger Curtis LLP
SRA number 417712
Authorised and regulated by the
Solicitors Regulation Authority
Partnership number: OC310963
Members: Trevor Ironmonger, Jonathan Curtis, Simon Smith

Break Clauses in Commercial Leases

Commercial Leases

Back to Commercial Property

In the current climate prospective Tenants of commercial properties may only be persuaded to commit to a longer lease if there is a break clause which will allow them, if necessary, to bring the term to an end part way through.

Tenants should be wary however as they may have difficulty in exercising a break option which is subject to pre-conditions e.g. compliance with Tenant's covenants up to the break date.

In such circumstances even a trivial or minor breach of covenant could prevent the exercise of the break.

If an unrestricted right to exercise the break cannot be agreed then the Tenant may seek a pre-condition which requires "material" compliance only.

Landlord's looking to oppose the exercise of a break option on the basis that there has not been material compliance with repairing obligations may have to prove that they have co-operated in attempting to agree the detail of the work required or that they would have difficulty re-letting if the breach is not remedied.

More certainty, and a reduced risk of litigation, may be achievedfor both the Landlord and Tenant if only breaches of covenant which the Tenant has failed to remedy within say 3 months of being put on notice would prevent exercise of the break option. This gives the Landlord the opportunity to make sure that the premises are left in the condition required by the lease and the Tenant the benefit of knowing exactly what will be required to exercise the break.

If you wish to discuss this article or require any advice or assistance in relation to commercial leases then please do not hesitate to contact Jonathan Senior on 0114 2536543.

If you require advice or assistance in relation to a dispute concerning a commercial lease or any other aspect of property law then please do not hesitate to contact Simon Smith on 0114 253 6546.