Break Clauses and how to deal with them

Break Clauses and how to deal with them

We deal with countless tenants asking us to settle their dilapidations claims only to find that they have exercised a Break Clause once we have reviewed the lease .  Ensuring exact compliance with the terms of the Break Clause is essential to avoid the Break Notice being invalidated.  Ignoring this can mean the lease continues and this can be extremely costly.

Some of the key things to consider and look out for are listed below.

Service of the Break Notice: the lease will stipulate the manner of service and the correct address for service along with the correct notice period.

Payment of outstanding monies: does the Break Clause require rents to have been paid (without set off or apportionment) or does it go wider requiring all outstanding monies under the lease to have been paid, even those which have not been specifically requested.

Vacant possession: is the giving of vacant possession a pre-requisite and what does this mean.

Compliance with the lease covenants: many Break Clauses require the lease covenants to have been complied with in full or materially.  This may mean amongst other things that the repairing breaches need to be addressed prior to lease end.

The above list is by no means exhaustive and the level of detail or exact requirement is different in every lease but above all else it is essential that a tenant plans for a lease break well in advance and obtains the correct professional advice. If the Break Notice is deemed invalid then the dilapidations claim may not be the major issue for the tenant to consider.