Circumstances change. Whatever the nature of an arrangement – be it economic, commercial or personal – a change of circumstances may make it desirable to seek an exit. This is particularly true of leases. In most cases it is difficult to find an exit but some leases do give the tenant the right to bring the lease to an end before the expiry date. The clauses that contain such rights are called break clauses. So far so good, but a tenant must take care in exercising a break clause. If they do not exercise it properly they will have failed to break the lease and will continue to be bound by its terms until the end of the lease – and there are no second chances.
Break clauses require break notices to be served on the landlord. Landlord and tenant solicitors, Dewar Hogan, say that sometimes this is easier said than done, especially if the landlord is an off-shore company. Another very common problem is conditional break clauses. These often say that a tenant can break their lease if they have complied with all their obligations, including paying the rent and keeping the premises in repair. In the current economic climate when it may be difficult to re-let, or re-let at a reasonable rent, landlords will carefully scrutinize break clause notices. If a notice is invalid the lease will remain in force until the end of the term.
Most tenants will instruct solicitors to advise, prepare and serve a break notice. Although this involves legal fees they will usually be modest compared to the rent and other costs that a tenant will have to continue to pay if they do not properly exercise a break clause. Dewar Hogan point out that the other benefit of instructing a solicitor is that if a break clause is not exercised properly as a result of solicitors’ negligence the tenant will have a claim for compensation against the solicitor.
About Dewar Hogan
Dewar Hogan are solicitors based in the City of London specialising exclusively in advice in relation to property issues, claims and disputes; and property litigation, including professional negligence claims against property professionals (solicitors, valuers etc). The firm provides the full range of commercial property services and residential property services including those relating to adverse possession, boundary disputes, and beneficial interests.
Founded in 1991 by Ron Hogan and John Cox, Dewar Hogan are recognised as one of the leading property litigation practices by Chambers Guide to the UK Legal Profession
Contact: Sarah Stevns, 7 Ludgate Broadway, London, EC4V 6DX, Phone: +44(0)207-634-9550
16th July 2012
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