Lease break clauses examined

Year Published: 2011

Whether a landlord or tenant, does your lease include a break clause entitling the tenant to terminate the lease early? If so, take care that the arrangements for giving up the premises operate in accordance with the wording of the lease.

In Ibrend Estates BV v NYK Logistics (UK) Ltd, the Court of Appeal decided this summer that a commercial tenant who gave a notice to break their lease, but (a) did not return the keys of the premises on the break date and (b) had workmen still present in the premises after the break date completing repair works required under the lease, had failed to give vacant possession of the premises on the break date. The result was that the lease was not effectively broken.

It is essential that the lease terms should be adhered to in the absence of any other agreement between the landlord and the tenant affecting the operation of the break provision. Tenants who believe that they are acting in a proper manner would be well advised to double-check that they are fulfilling what is set out in the lease or otherwise ensure that have reached a positive agreement with the landlord.

For further information please contact Becky Simpson on 0844 391 5804 or any member of our Real Estate team.

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