Exercising a Break Clause in a Commercial Lease
Break clauses are the subject of litigation again. A recent High Court decision provides a helpful reminder for commercial tenants of the need to fully comply with any conditions for exercising break rights. Otherwise, as in this case, the lease will continue to exist. Tenants should check carefully the terms of their lease and any licence for alterations and take legal advice at an early stage to ensure that they don’t lose out.
In this case, when the lease was granted, the premises were open plan. The tenant subsequently carried out various works, including the installation of partitions. The court held that the partitions were chattels that substantially prevented or interfered with the landlord's right of possession. This meant that the tenant had not given vacant possession as was required by the break clause.
If you are thinking about exercising a break clause in a lease of commercial property speak to one of our experts to ensure that you don’t fall foul of tricky landlords and to avoid unnecessary costs.