Conditions attached to break options are fertile ground for dispute, particularly because such conditions have to be strictly performed. For a tenant, this is a cause for concern as failure to fully comply with a condition may frustrate the commercial purpose of the break option.

Typically tenants would seek to negotiate that any break must be unconditional. However, this is usually resisted by landlords. Whilst it is always a question of negotiation, compromise is often reached by referring to the Code for Leasing Business Premises in England and Wales 2007. The 2007 Code recommends that the only pre-conditions to a break option should be payment of the main rent, giving up occupation and leaving behind no continuing subleases.

We would always recommend that any pre-conditions to the break option are clearly spelt out in the heads of terms, to avoid protracted legal negotiations in this regard.

Whether or not there are pre-conditions to the break option, it is worth noting that the landlord's right to pursue a damages claim against the tenant for any prior breach of covenant is preserved.