entirely met the terms of the break clause and typically involves a landlord asserting that the tenant hasn’t done all they should have to break free from the lease. In the current climate, there is an expectation that an increasing number of tenants could seek to trigger an existing break clause, potentially to downsize and agree a new lease, even in the same space. Seeking to trigger a break clause is a serious
step, requiring a lot of advance planning and should really involve the advice of an experienced commercial property lawyer, who will help avoid the unwanted consequences of getting it wrong. In what can be a poor rental market, with lots of
tenants looking to downsize, landlords can be put on the back foot, having to fi nd tenants quickly to maintain their income. T is situation will ensure landlords will check the details of their agreements closely, to understand if they can reject the request to break the lease.
Ensure you serve notice correctly and adhere to its conditions When considering a break clause, the fi rst important point is, how, when, where and to whom the notice requesting the break should be served. T e details of these instructions in the lease must be followed to the letter, or a break clause will be rendered invalid if the conditions are not met.
T e notice might have to be given using a specifi c form and must be
delivered to the right person. Check the landlord at the time the lease was drawn up is still the landlord and check with the Land Registry if necessary. T e party exercising the break clause must adhere to the provisions of the clause and prove the notice was served correctly. Case law has shown time and again that break clauses will be construed against the party seeking to rely on it. T e party serving the break will often have to demonstrate they
provided ‘vacant possession’. T is is not as easy as it sounds and can take time to resolve, as it is not just a case of leaving the space empty, but as it was when the lease was agreed, with any changes reversed and everything left as it was, including all the original fi ttings. It’s important to note that once a break clause is triggered, it cannot
legally be revoked, even if either party changes their mind due to circumstance changing while the notice period is being served. A new lease at the end of the old is the only solution, which often has a number of unwanted consequences for either landlord or tenant or both. Standard commercial leases are a thing of the past and new leases will contain clauses designed to protect the interests of the landlord and tenant, so it is always advisable to remain aware of current trends and engage appropriate legal advice before discussing any contractual changes. Lease agreements in general and break clauses in particular off er
a lot of potential risks for the unwary and this is where the help of an experienced commercial property lawyer can save a lot of time, stress and expense.
If you need support drafting leases with appropriate break clauses or need advice about triggering a break clause, speak to a member of the Commercial Property team at Taylor Walton Solicitors on 01727 845245 or email
james.khakpour-smith@
taylorwalton.co.uk
ALL THINGS BUSINESS 35
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