Give me a break: why break clauses matter

By Anna Ralston

The power is back with the landlords. After the dust has settled on two important Court of Appeal decisions relating to tenant’s break options, it is now the case that: unless there is an express apportionment clause, it will be difficult for a tenant to argue that it should be entitled to an apportioned refund for rents and other sums paid in advance of, but that relate to the period after, a break date (the broken period); and non-compliance with a mandatory requirement of a break clause (or any other option) will render a break notice invalid.

Last year saw two tenant-friendly decisions: first, there was Marks and Spencer v BNP Paribas, where it was held that the landlord did have to repay an apportioned amount of rent and other sums that related to the broken period; and second, there was Siemens v Friends Life, where it was held that non-compliance with the strict requirements of a break option, in terms of the form of notice, did not render the break notice invalid…

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