A Warning To Tenants About To Exercise A Break Clause

In today's difficult economic climate, tenants who have negotiated a break clause in their commercial lease may be alarmed to find out just how difficult it can be to successfully exercise it.

In essence, a break clause allows either the Tenant or the Landlord to terminate the Lease early. Although this sounds fairly simple, in practice, a Tenant wishing to exercise the break may find it anything but straightforward. The right to exercise a break is usually conditional upon certain conditions being fulfilled, such as rents being paid up to the break date, the need to give vacant possession and to comply with other general tenant obligations in the lease.

Vacant possession is generally considered to mean that;