Within the terms of a commercial property lease there is sometimes an opportunity to prematurely determine a lease term before it has come to its contractual end.  This is known as a “break clause” or “early termination provision”.

The terms of the break clause within the lease will determine how and when that break clause is exercised.  Frequently there are specific provisions detailing how and when the notice must be served.  Do not simply look at the terms of the termination provision, you must make sure that the notice has been properly and validly served on the party receiving it.  This is not always apparent from the break provision itself, and you will need to look at the clauses in the Lease relating to service of notice.

As well as ensuring that notice is served in the correct manner and in accordance with the terms of the Lease, there are quite often pre-conditions which need to be satisfied in exercising any break provision.  Examples of this might be paying a sum of money to the party receiving the break notice by way of penalty or, for the party serving the break notice, an obligation, for example, to put the property into the same state it was as at the date the Lease was entered into.  This might be the dismantling of internal partitioning, or recovering the floors.

Exercising a break clause is usually time specific and it is crucial to ensure that the break clause is exercised fully in accordance with the terms of the Lease.  Whether you are a landlord or a tenant exercising the break clause, you would be well advised to contact a member of our team to ensure that you are serving the notice in the correct format.