14/04/2016

Fixed term leases typically obligate tenants for a set period of time. A commercial property lease usually continues until its end date unless you include a clause to end it earlier.

The case of Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another has reinforced the importance of ensuring that any right to break in a lease is comprehensively drafted to cover a range of possibilities. In this case, the Court decided that as the lease did not contain any apportionment clause regarding rent paid for a period following the break date then the Landlord did not have to repay the rent paid for this period to the tenant.

In order for a break notice to be validly served, there must be strict adherence to any conditions attached to the right to break. These include:

• when a break notice has to be served.
• the period of notice to be given
• any payments to be made to the other party and when the payments must be made
• compliance with lease obligations as a condition of exercising the break such as repairing obligations, maintenance requirements and insurance obligations

If a break notice is not effective then the lease will continue and you will have to comply with your obligations under it. This could prove very costly not only from a rental payment point of view but also as the obligations under the lease including repair, maintenance and insurance obligations as they will continue to apply and you will have to comply with them.

Whether you are considering taking a new lease of a property or exercising a right to break Beswicks Legal can give valuable advice to you. When lease terms are being negotiated and agreed with the other party we can ensure that the documentation protects your position in relation to any break provision. If you are thinking about exercising a right to break then please contact us to discuss any steps that need to be taken before a break notice is served and avoid any pitfalls that may exist which could result in the notice and your wish to terminate the leave being ineffective.

For further details on this or any other aspect of Commercial Property Law, contact Beswicks Legal on 01782 205000 or enquiry@beswicks.com