The current pandemic has highlighted the binding nature of commercial leasehold obligations, irrespective of whether the tenant can derive any benefit from the premises. Many tenants, particularly in the retail sector, have found themselves with little or no income, unable to operate their businesses from their commercial premises but still bound to pay the rent and other outgoings due.

Whilst most leases contain rights to assign or underlet where premises are surplus to the existing tenants requirements, see our previous factsheet on Alienation – A guide to assigning or underletting your lease, this has been of little help recently as the appetite for taking on new business premises has largely stagnated.

Some, but not all, leases contain a break right affording the Tenant (and sometimes the Landlord) the right to end the lease early. In this latest factsheet from our commercial property team, we look at the operation of tenant break rights and the additional benefits these may offer in the current climate.

The ‘Exercising Break Rights’ guide can be accessed here, and covers:

• What is a Break Right?
• Service of the Break Notice
• Break Clause Conditions
• Break rights in the Covid-19 Environment

Whilst break rights are extremely beneficial, Tenants should carefully review the break clause requirements and consider whether they can realistically fulfil the conditions before serving a break notice and exercising the right to break. It is always recommended that you seek the advice of a solicitor before exercising a break right. Our commercial property solicitors are experienced at dealing with early termination rights and can check the terms of your lease and advise you on the requirements to be satisfied. We can also draft and serve the Break Notice for you.

If you would like to discuss the options available to you in relation to your lease, please contact our Head of Commercial Property – Julia Ferguson.