High Court decides tenant entitled to rent repayment following break

In a recent ruling, the High Court has, for the first time, implied a term into a lease entitling the tenant to repayment of rent and other sums paid before the break date that related to the period after the break date.

In Marks & Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Limited [2013] EWHC 1279, the latest of a long line of recent cases on exercise of break rights, the court has considered whether, following successful exercise of a break, the tenant is entitled to a refund of the rent paid for the period after the break date.

Normally, in order to exercise a break, a tenant has to pay the full quarter’s rent that falls due prior to the break date, even if the break date occurs part way through that quarter. This is on the basis that the break may not be successfully exercised and therefore it is the full quarter’s rent that is owed.

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