Breaking up is hard to do

Written on 25 Nov 2014

A recent decision, once again, demonstrates the limitations of conditional break clauses.

In this latest case, when the tenant served a break notice on the landlord, the landlord claimed that the break (which was conditional upon compliance with the covenants in the lease) was invalid for lack of compliance with various covenants, including a covenant to keep fencing in repair. The judge found that the tenant had failed to comply with their obligation to keep the fencing properly in repair (despite the tenant having carried out patch repairs). As a consequence the break notice was ineffective and the lease continued. This reminds us of the inherent dangers of conditional break clauses.

As property litigator, Jane Rogers comments, “This first instance decision of Mr Justice Newey does not extend the existing law on conditional break clauses but it does underline the principle that even trivial breaches of the lease can defeat the exercise of an option.”