Break The Lease … Not The Bank !

As a business you may have negotiated a break clause in your Lease and may be wishing to exercise it either because you are moving Premises, or because your business is closing down.

By failing to correctly exercise the break clause you could lose thousands of pounds.

All to often a businesses get so blinded by moving they forget about what they need to do to leave their present property.

Once the opportunity to break a lease is lost the only option is to try and negotiate a lease surrender with the landlord or try to assign or underlet the property.  This can be very costly and, in the wrong market conditions, very difficult.  The business can be left with a building it no longer wishes to occupy, with ongoing rent and service charge liabilities.

Unfortunately failing to properly exercise a break option is only too common.  Errors include failing to serve the break notice by the correct date on the correct address or even failing to get the right name of the landlord.  If there are conditions attached to the break clause this can cause even greater difficulties.

We advise that tenants should always consult their solicitor well in advance of any intention to exercise a break clause.

Getting the notice wrong or failing to comply with the precise conditions can leave firms with ongoing liabilities for months or even years in the future.

November 2005