UK · EU · US · InternationalBreak clauses: why most attempts to break a lease fail
Short answer: break clauses fail on technicalities far more often than on merits, and a failed break leaves you liable for the rest of the term. The clause is worth reading on the day you sign the lease, not on the day you want to leave.
Conditions are construed strictly
A break right is a unilateral option, and the conditions attached to it must be complied with strictly. Substantial compliance is not enough. If the clause requires the rent to be paid up to date, arrears of a few pounds can defeat the notice. If it requires all covenants to be performed, an unrepaired scuff can defeat it.
Where you have any choice at negotiation, resist conditions tied to full compliance with all tenant covenants. A condition limited to payment of the principal rent is far safer, because it can be satisfied with certainty.
Vacant possession is not the same as leaving
Where the clause requires vacant possession, the premises must be free of people, chattels and legal interests, so the landlord can take immediate and exclusive possession. Cases have turned on partition walls, fixed furniture, leftover equipment and contractors still on site. Handing back the keys is not vacant possession if anything of yours remains.
A condition requiring only that the tenant gives up occupation is materially easier to satisfy, and worth asking for at grant.
Rent paid beyond the break date is usually gone
Where rent is payable quarterly in advance and the break date falls mid quarter, the tenant pays the whole quarter and, absent an express clause, does not get the balance back. The Supreme Court in Marks and Spencer v BNP Paribas declined to imply a term requiring repayment. If you want the overpayment back the lease must say so, which makes it a negotiation point at grant rather than an argument at exit.
Timing and service
Notice periods are strict and cannot usually be shortened. Serve early, serve in the manner the lease requires, serve on the correct party including any superior landlord or agent named in the lease, and keep evidence of service. A notice served perfectly but a day late is worthless.
What we do
We read the break clause at review, before you sign, and tell you what it will actually take to operate. Where you already hold the lease we advise on the conditions and prepare the notice. See commercial lease review, from £750.
Common questions
Can a small rent arrear defeat a break notice?
Yes, where the clause makes payment of rent a condition. Conditions are construed strictly and small sums have defeated breaks.
What does vacant possession require?
Premises free of people, chattels and legal interests so the landlord can take immediate and exclusive possession. Leftover fittings, equipment or contractors can defeat it.
Do I get back rent paid past the break date?
Usually not, unless the lease expressly provides for it. The Supreme Court declined to imply a repayment term in Marks and Spencer v BNP Paribas.
When should I take advice on a break?
At least six months before the notice deadline, and ideally before signing the lease at all. Once the deadline passes there is nothing left to advise on.
Fixed fee agreed in writing before any work begins, written reply within twenty four hours, handled entirely in writing. Send your matter.