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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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The fast-tracked Economic Crime (Transparency and Enforcement) Act 2022 received Royal Assent on 15th March 2022, creating a new public Register of Overseas Entities (the OE Register). UK entities already have an obligation to disclose their beneficial ownership information under the PSC (People with Significant Control) regime however, this new register will apply where the UK property is held by a non-UK legal entity. This register will capture any overseas entities who hold freehold titles or leasehold titles of longer than seven years in England and Wales (a Qualifying Estate). The register will document the name, address and start date of the person who is the beneficial owner as well as the nature of the person’s ownership. This information must then be updated every 12 months. The scope of a Qualifying Estate is wide-reaching. For any Qualifying Estate that has been acquired since 1999 and still owned by an overseas entity, then that entity will be required to register. Additionally, any property dealings post 28th February 2022 will require the overseas entity to be registered.  It is not yet clear when the register will be implemented but with the deadline for compliance six months from implementation, overseas entities that could be caught by the new legislation should assess their position immediately to ensure compliance. If you require further information please contact our Conveyancing department on rsnipe@blackhams.com or telephone 0121 233 6912.

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By Harkeert Kaur Samra • March 11, 2022
In ASR Interiors Ltd v AWS Trading Ltd & Anor [2022] , a witness attempted to give video evidence while driving a van. It has been reported that one of the witnesses called by the defendant, ‘appeared to be driving a van while dividing his attention between the road in front of him and the camera of a mobile device placed on the passenger seat’. The judge requested the hearing be stopped and directed the defendant to re-establish contact with the witness once he was stationary. The second time contact was made, Mr Singh appeared to be in a busy office with distracting amounts of background noise. On the judge’s request, he found a quieter storeroom in the building, but Singh then had to disappear with the video link running while he ran back to the office to get his statement. The judge recorded that Singh did not have his exhibit to the witness statement to hand or know about a brochure he referred to in the statement. The judge then proceeded to say counsel for the defendant ‘wisely accepted that the process was not turning out to be a successful one’ and opted to rely on Singh’s statement only. The judge said this was ‘realistic’ but did not give Singh’s statement any weight.
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