18/2/21 – Exercising a Tenant’s Break Option in a Commercial Lease

Over recent years it has become increasingly common for tenants to seek to exercise break clauses in commercial leases.  During the current pandemic in particular, some tenants who may be struggling have looked to exercise these break clauses.  However, care is required.

Where a commercial lease includes a tenant’s option to break, it is critical that the precise requirements for that break option as set out in the subject lease are met, completely and accurately, including compliance with the timetable and the form of that notice.  An example of this is where an Appeal Court judge said in a case dating back to 1997, that, if a clause requires the notice to be given on pink paper, it is not validly exercised by giving it on blue paper no matter how clear the intention to exercise the option may be.

For further advice please contact Francis Tomlinson on 01462 434455 or Robert Clifford on 020 7907 3704, both Directors in our Lease Advisory team.