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Compliance With Break Clauses

QUESTION: My company needs to relocate. Our lease has a tenant-only conditional break, effective in 18 months’ time. How can we ensure we are compliant of the break?

This is critical when dealing with a lease break. Every lease is different and each will treat the notice required for serving a break differently.

You should take advice from your surveyors and lawyers very early in the process to ensure you get a proper interpretation of the legalities of the lease and its obligation. Your team should help to identify what needs to be done to comply with the break at least six months before the date for service of notice.

Having agreed a timeline for various steps the building surveyor ought to take a dilapidations survey and send a copy to your landlord inviting comment. Be careful of landlords who propose a financial settlement for dilapidations and then prolong negotiations as a tactic to prevent the break being exercised. Your building surveyor ought to recommend and impose time limits on any negotiations. If the landlord is not welcoming the break then you should start to carry out all the necessary works.

Once you are absolutely sure that nothing has been missed, send a copy of the completed works survey to your landlord inviting comment. Ensure that your solicitor has plenty of time to draft the break notice and serves it well within the specified timescales.

You should make sure that all sums due for rent or other charges are paid on the break date. If there is any premium payable, ensure that this is sent to your landlord in cleared funds on or before the break date and when you vacate the premises you should ensure that all items are removed.

By doing things in this manner you will ensure that the break will be effective.

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