The top ten rules of break clauses In house lawyers forum – spring 2013

• there is no breach of the lease too

small, too technical or too unfair on the

tenant that it will not lose the tenant its

right to break if the break is conditional

on full compliance with the tenant’s

covenants

• the same goes for requirements under a

lease that the break notice is served at

a particular address, by a particular

person, on a particular person, or by a

particular mode of service. Every single

word of the break clause relating to

service must be strictly complied with

• likewise for requirements under a lease

that the break notice is to be served or

payments are to be made or covenants

are to be complied with or vacant

possession is to be given, by a certain

time or before a certain date

• the only reliable exception to the first

rule occurs when the break clause is

expressly conditional only on

‘substantial’ or ‘material’ compliance

with tenant’s covenants

• the landlord’s motive for trying to

defeat the break is irrelevant - this is a

legal way of saying that no basis for

resisting the exercise of a break will fail

for being too cynical

• the presence in the lease of a liability to pay

money ‘whether demanded or not’ means

that it will be the tenant who will have to

calculate and pay the amount owing, if the

break clause is conditional on all sums due

under the lease having been paid

• small errors in the wording of the break

notice will not necessarily render it

ineffective if the reasonable recipient

would nevertheless be able correctly to

ascertain what the tenant meant to

write

• a tenant who believes that it has

complied with the conditions attached

to the break should tell its landlord of

that belief and ask the landlord to

confirm whether it agrees, and if not,

why not

• where the giving of vacant possession is

a condition of the break clause, strict

compliance with the condition does not

mean the tenant has to leave the

premises 100% pristine to satisfy the

condition

• the workings of the above rules will

always be subject to modification

depending on the terms of the lease

Get in touch if you have any questions or

would like further information.

t +(0)121 237 3992

e richard.nicholas@brownejacobson.com