The Christmas period for most people usually means time away from work, or at least a time where your mind can focus on other things like family and fine wining and dining. BUT beware commercial tenants!

Yes, this is probably not the most exciting blog to read and I hate to be the grinch, but I hope that this will be a reminder that the world keeps turning at Christmas time and tenant leasehold obligations still apply.

Rent Payments

Many leases require quarterly rent payments to be made on or before the ‘usual quarter days’, the relevant dates here are 25 March, 24 June, 29 September and 25 December. If you do not have a direct debit set up for the quarterly payments, say if you took on the lease between the September and December quarter days and you are yet to make a full quarterly payment, you could easily miss the December pay day if you are pre-occupied with Christmas shenanigans!

In most leases, the landlord will have a right of forfeiture if rent is in arrears for 21 days. This means you could lose the property if rent is unpaid for 21 days after being due and the Landlord need not remind you of this as leases usually provide this right whether rent is ‘formally demanded or not’. It is imperative that you ensure the rent payment dates are known and you have set up a payment method that will pay rent automatically or at least remind you to pay it. Usually, a lease will provide the tenant to set up a direct debit payment for rent or it may be via another method ‘required by the landlord’.

Break Dates

Break dates are also commonly around quarter days and Christmas is, of course a quarter day. This may be because a lease starts on the June quarter day and the break date is at the ‘halfway point’ of the term. Say the lease was for a term of 5 years starting on the June quarter day, if the break date was 2 ½ years into the term (being the halfway point), it would land on Christmas Day.

There is less leniency here than there is for late payment of rent. As above you usually (but not always) have 21 days in a standard commercial lease to pay the rent before the landlord has a right of forfeiture (although you should aim to never be in arrears). Break dates are very time sensitive and there is usually no possibility of exercising the break after the break date has passed.

Break clauses can also have very specific requirements for them to be validly served (see my previous blog on exercising break clauses). The busyness of Christmas can take your attention away from your entitlement to exercise a tenant break and you get no second chances! If you miss a break that you intended to exercise you could/will be stuck with the lease and its obligations for the remainder of the term, until the next exercisable break date or until you assign/sell the lease to an incoming tenant if the lease allows for this. With relation to the latter, you would usually be required to enter into an AGA (Authorised Guarantee Agreement) to guarantee the incoming tenant’s obligations which is less desirable than a clean break.

So, as you can see, missing a break date because of Christmas hype might be undesirable.