Refunds of rent following Marks and Spencer plc v BNP Paribas

By Tim Allen

It is common practice for break clauses to include an obligation upon the tenant to have settled all arrears of rent up to the break date in order for a tenant’s option to terminate the lease to be effective.

It is generally acknowledged that tenants will not have the right to claim a refund of rent following a break date unless the lease expressly grants that right. This practice is based upon case law dating back to Ellis v Rowbotham [1900] 2QB, where it was held that a landlord who forfeited a lease for non-payment of rent was entitled to the whole rent instalment even though forfeiture took place before the end of the period to which the instalment related.

More recently, the position had been affirmed in Quirkco Investments Ltd v Aspray Transport Ltd [2011] EWHC3060 (Ch). In the Quirkco case, the lease reserved a yearly rent and stated that where the commencement and expiry date of the lease did not match the usual quarter days, the tenant was required to pay ‘in proportion for any period of less than a year’…

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