Tenants’ Break Clauses in Commercial Leases

Tenants’ break clauses, giving tenants the right to bring their lease to an end early are becoming increasingly common in commercial leases with the object of giving the tenant a degree of flexibility in relation to their rented premises. It is vital to get things right both when the break clause is being drafted before the lease is granted and when seeking to operate the break.


From the tenants’ point of view any conditions attached to their ability to operate the break clause should be kept to an absolute minimum. Landlords will always insist that the rent (and probably other payments) due under the lease must be up to date and that possession of the premises is given up by the break date (which in practice means clearing the property completely) but other conditions such as compliance with all of the other tenant’s covenants in the lease (e.g. the covenant to keep in full repair) should be resisted by the tenant at the negotiation stage.


Other considerations are whether the break opportunity is to be a one-off on a specific date or if it will be a “rolling break” which could be operated at any time after a certain date and the length of notice that must be given to the landlord.

When a tenant wants to operate a break clause it is always a good idea to do so as early as possible and not leave it until the last possible moment. The provisions of the lease must be consulted to check how the notice to the landlord is to be given, the identity of the current landlord and the correct address for service of the notice.


The break clause in the lease may not refer to a specific date but to the break date being a specified anniversary of the commencement date and in such circumstances consideration must be given to exactly when the break date is.


Landlords will often be looking for a reason to be able to reject a tenant’s break notice and failure to observe the terms of the relevant clause in the lease can have expensive consequences for a tenant. It is therefore vital for tenants to seek legal advice both when negotiating the lease at the outset and at the point when they wish to exercise a break right.

If you require further information please contact our Commercial Conveyancing department on tallsopp@blackhams.com or telephone 0121 233 6912.

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