It is essential for both landlords and tenants to have flexibility regarding the term of a commercial lease.
Life and business are unpredictable. Break clauses ensure parties can end a tenancy agreement before it expires, should circumstances require it.
When it comes to break clauses, our Commercial Property Solicitors can advise you quickly and competently, providing you with the information you need to negotiate the best terms and conditions for your business, be you a landlord or a tenant.
We are a diverse, multi-lingual law firm that uses best-in-class technology to provide clients with streamlined, modern, and highly effective commercial property law advice and representation. Our years of experience in commercial property law means we have a robust reputation for excellence with the UK’s best Barristers and Queen’s Counsel, Estate Agents, Independent Financial Advisers, Surveyors, and Lenders who can bring additional support to our Commercial Property Department if needed.
What is a break clause?
If you are just starting your business, flexibility and agility are vital ingredients to your success. A break clause is written into a fixed term commercial lease agreement to enable the landlord and/or the tenant to terminate the lease before the lease end date. Commercial leases, on average, are granted for five to seven years. Committing to such a period with no break clause comprises a considerable risk; hence, the value of one or two break clauses.
You will need to negotiate hard to secure a break clause that works for you and your business. This is where your Solicitor’s expertise comes into play – they can advise you on how to approach the landlord and the best way to ensure a win/win. In addition, they will check over the terms of the break clause so you can be confident that if you choose to exercise it, the process will be free from any nasty surprises.
What type of conditions are attached to a break clause?
Break clauses will specify conditions for the break clause to operate; for example:
- All rents and payments due under the lease must be paid.
- All covenants under the lease agreement must be performed.
- No material breach of its repairing covenants should exist on the part of the tenant.
- The tenant must leave the premises vacant.
- The landlord must have an intention to redevelop the property.
The break clause should specify whether the conditions must be satisfied at the date the break notice is served or at the break date, or both.
The Royal Institution of Chartered Surveyors (RICS) professional statement, Code for Leasing Business Premises, England and Wales 2020 (1st edition) (Lease Code 2020) which took effect on 1 September 2020, states that it is best practice to have only two conditions relating to a break clause, namely:
- The tenant pays the basic rent up to the break date.
- The tenant gives up occupation and leaves no subtenants or other occupiers.
However, paragraph 2.4 of Part 3 of the Lease Code 2020 recognises that the landlord and tenant may have agreed to stricter conditions in the Heads of Terms.
Why choose us?
Whether you require warehouse, retail, manufacturing, or office space, break clauses are essential for all parties to a commercial lease in these unpredictable times. Our Commercial Property Solicitors will look carefully at the proposed terms of any break clauses, ensuring they comply with relevant guidance. We will also be by your side if you choose to exercise a break clause, advising you on how to do so within the terms of your commercial tenancy agreement.
We are proud of our personal service to all our clients and where possible we are always available by phone and will respond to your email within 24 hours. As a full-service law firm, we can also provide advice on other commercial matters such as contracts and dispute resolution.
We will leave no stone unturned when handling your commercial property transaction and/or negotiating terms. Each member of our team has the experience and resources available to ensure that every aspect of your commercial lease agreement including break clauses, that requires attention will be spotted, brought to the fore, and managed. You can trust us to provide the commercially-astute advice you need to protect your interests.
Our Solicitors are businesspeople themselves; therefore, we understand that every decision you make must encompass commercial reality. We receive most of our instructions via word of mouth recommendations because business owners in Coventry and Warwickshire are confident that we have the knowledge and dedication required to negotiate the best commercial lease terms on their behalf.
We are focused on results and achieving them in the swiftest, most cost-effective way possible. Our Commercial Property Solicitors will take care of your legal concerns so you can concentrate on your organisation’s future growth and prosperity.
To talk to us about break clauses, please contact us using the form below.
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Depending upon the complexity we are able to offer fixed fees in some cases. In other cases our solicitors chargethe following hourly rate:
- Partner/Member SolicitorHourly rate of £250 + VAT
- Senior Solicitor or Head of Dept: (PQE 8yr+)Hourly rate of £225 + VAT
- Assistant Solicitor/Fee Earner (PQE 3/7yr)Hourly rate of £200 + VAT
- Newly Qualified Fee Earner (PQE 1/3yr)Hourly rate of £170 + VAT
- Paralegals/TraineesHourly rate of £120 + VAT
- Support ParalegalsHourly rate of £100 + VAT