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Break clauses

Break clauses allow tenants, if necessary, to bring the lease to an end part way through the term.

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Break clauses

Our commercial property solicitors have knowledge and experience which can assist you in the negotiation of a lease or the operation of the terms.

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 achieved for 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.

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