How to… activate a tenant’s break clause

Posted: 04/02/2014

There are many pitfalls in activating a tenant’s break clause, so be aware of the following:

• Make sure that the person giving the notice is the person who owns the lease. Where you are sharing occupation with another company it may be easy to put the notice in the other company’s name; or where a parent company has, out of practice, been paying the rent, the actual tenant is not the parent company. Also, if a lease is owned jointly, make sure that the notice is given by all the joint owners.
• Comply with the requirements for service of the notice:

- If the lease says that a break notice needs to be served within a specified time, don’t serve it late;

- Make sure the landlord’s specified address is served; failing that, try the landlord’s home or registered office. If in doubt, cover all possibilities;

- If a particular method of service is specified, comply with it.

• Be aware of and comply with any conditions for the operation of the break, such as:

- Are all sums due under the lease paid up to date, including interest on historic late payments?

- Have you performed all your covenants?

• Finally, make sure that you want to break the lease. Once a break notice is exercised it cannot be withdrawn.

This article was published in Estates Gazette in January 2014.

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