Many commercial property leases contain break clauses allowing tenants to terminate the lease earlier than the expiry date. It’s important to understand the specific requirements of the break provisions and to plan in advance. Such clauses are often litigated between landlords and tenants and careful preparation can avoid the management time, cost and uncertainty these disputes can involve.

Break clauses will require notice to be served in a specific manner and within a prescribed timeframe. They can also require certain pre-conditions to be met, for example payment of rent (and possibly a capital sum), compliance with other obligations in the lease such as carrying out repairs or removal of alterations and the giving of vacant possession on the break date.

As a tenant you can avoid costly mistakes which could render exercise of the break clause ineffective and as a landlord you can ensure termination is only effective where strictly permitted by taking early advice where necessary.