Top ten tips for breaking a lease
09/06/2010
By Richard Ellard, Partner in Commercial Property & Development.
In the current market many tenants are deciding to exercise their break options but with landlords keen to avoid empty properties it is vital for a tenant to get it right. Our top tip list will guide you.
- Check terms. All conditions attached to the break option must be met in order to successfully end the lease.
- Notice. You must give the correct period of notice. One day too short and you will not be able to end the lease.
- Break date. You must ensure you have calculated the break date correctly. Hopefully your lease will specify an actual date but it may refer to an anniversary of the start of the term.
- Method of service. Check the lease to make sure you serve the notice by the correct method. Email is unlikely to be valid. You should keep a record of when you serve the notice and it is sensible to ask the landlord to acknowledge receipt.
- Comply with lease covenants. If required, you must ensure that you have complied with all the obligations in the lease both when you serve the notice and on the break date. Strict compliance is necessary. If you are required to decorate the property in the last year of the term you must decorate even if you only decorated last year.
- Vacant possession. No rubbish should be left and you must not be occupying the property on the break date.
- Payment of rent and other sums. You need to ensure that you pay all sums required. This may include insurance and service charge payments as well as rent.
- Ask a surveyor. If the lease is full repairing and requires reinstatement of alterations this must be dealt with and you should ask a surveyor to advise you of the work that needs to be done.
- Ask the landlord. Although the landlord is under no obligation to help you, it is worth asking what works need to be carried out and what payments you need to make to avoid any uncertainty.
- Seek legal advice. With so many risks it is important for you to be properly advised.