by Claire Miller – Partner, Head of Property, Penman Sedgwick LLP

Are you a commercial tenant with an imminent break right?
If so, and if you are considering exercising this right, it is vital that you take great care in doing so. Rights like these are more valuable than ever in the current uncertain market, and making a mistake could be very costly indeed: the exit route that you took care to negotiate when you entered into your lease, and which you now find yourself in need of, will be lost and you will remain committed to the rent and other obligations in the lease for what could be many more years to come.

You will need to consider the following in particular:

  • any conditions attached to the break right – a break clause will be strictly construed and these must be strictly performed if your break notice is to take effect
  • any time limits in the break clause – time will be of the essence in respect of these, even if the clause does not expressly state this
  • the notice provisions in the lease – failure to serve the break notice in accordance with these provisions could be fatal
  • the form of the break notice – if the lease prescribes a particular form, it must be used, and even if it doesn’t there are plenty of tenants who have found that their break notice has been invalidated by defects in the notice itself
  • who may serve the notice, and on whom it should be served – make a mistake with either, and your notice will be invalid

It is important that you take legal advice before you exercise this valuable right: we can help with this, and all that flows from this such as dealing with dilapidations liabilities, claiming back any rent paid in advance for the period after the break date (if the lease provides for this) and lodging an application to the Land Registry to close your leasehold title (if your lease is registered).

If you are looking for legal advice, we can help.