Break clauses in leases
Break clauses are commonly found in commercial leases and permit tenants to terminate their lease on an intermediate date during the term of the lease.
Unless the terms on offer from a landlord are so favourable, prospective tenants will not commit to a long – term lease. Increasingly, prospective occupiers wish to retain flexibility with regard to their occupancy of premises and break clauses provide this flexibility. Business needs change over time and so do premises requirements.
Break clauses thus help in attracting tenants whilst granting those tenants the ability to relocate or renegotiate lease terms at these break points.
Depending on the overall lease term, break clauses may operate after three, five or ten years. They usually require the tenant to provide a minim period of notice to exercise the break and if this is done it usually triggers a process of negotiation with the landlord who will usually be keen for the tenant to remain in occupancy for a further period.
Providing notice to exercise the break clause is, therefore, often used as an opportunity to renegotiate the rent payable. New terms are often agreed which involve the granting of a rent free period.
However, if the notice to break is served on the landlord, and the landlord accepts it, then the tenant must vacate the premises by the due date.
Careful consideration must therefore be given to the question as to whether to break or not as the outcome for the party giving notice may not be the desired one.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Read about RSHP's British Museum extension which has been shortlisted for the 2017 Stirling Prize.
Read our introductory article to building a house extension.
More updates from DCMS about the large-scale testing of cladding systems and the number of buildings affected.
UandI secure resolution to grant planning consent for major new regeneration project.
Infrastructure and the historic environment
IHBC article considers how heritage is dealt with when infrastructure schemes are authorised.
It was the tallest structure in the world for 3,800 years, but to this day the exact construction techniques are a mystery.
Shortlist for the industry's most coveted award announced.
Government responds to Mark Farmer's review of industry, rejecting the call for a levy on clients.
Peter Hansford to examine what wider lessons can be learned from the fire.
Every project is subject to uncertainty. How can construction better understand uncertainty for performance improvement?
MAD Architects reveal their designs for a futuristic campus for electric car manufacturer.
Homebuyers could borrow more with better forecasting of energy bills, according to industry consortium's new report.
Read our introductory article on carbon capture and storage.
Grenfell Tower articles updated daily
