What is a break clause?
A break clause in a commercial lease allows either the tenant or the landlord to terminate the lease early. It provides some flexibility as, depending on how the lease is drafted, the right to terminate the lease may arise on one or more specified dates, or it may be exercisable at any time during the term on a rolling basis.
Conditions of a break clause
The right to exercise a break clause is usually conditional upon certain conditions being fulfilled, such as rents being paid up to the break date and vacant possession of the property being given on the break date.
An obligation to give vacant possession puts an obligation the tenant to make the property available so that the landlord can both physically and legally occupy it and enjoy the property undisturbed.
A break clause may also be conditional upon the tenant complying with its covenants in the lease. Even the smallest of breaches can prevent a tenant from terminating the lease early.
Conditions of a break clause can make it tricky for a tenant and a landlord needs to ensure that the tenant has properly complied with all the conditions before allowing the break to proceed.
Our specialist landlord and tenant can advise you before you serve the break notice whether you are a landlord or a tenant. It is important that you get things right from the offset and even serving the notice incorrectly can be fatal.
For further information please contact our specialists using the online enquiry box above or by e-mail firstname.lastname@example.org or contacting us on 0161 833 0044.