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ARTICLE · 02 APRIL 2013

Break Options – Yet Another Failed Attempt

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The case of Canonical UK v TST Millbank LLC has added to the recent flurry of failed break clause cases.

United KingdomReal Estate and Construction
Lauren King
Lauren King

First appeared in Informer: Real Estate Newsletter - Spring 2013

The case of Canonical UK v TST Millbank LLC has added to the recent flurry of failed break clause cases.  This is no doubt symptomatic of the economic climate in recent years, which has resulted in tenants attempting to offload properties that are financially draining or surplus to requirements whenever possible, and landlords challenging such attempts in order to retain rental income.

The facts

The tenant applied to Court for a declaration that it had validly exercised its break option terminating its lease of 27th floor of the Millbank Tower in London. The lease was for 10 years and provided that the tenant had to pay "yearly and proportionately for any part of a year the Yearly Rent... by equal quarterly payments to be made in advance on the usual quarter days". The break clause provided that the tenant could terminate the lease by giving six months' notice, provided (1) the rent was paid up to

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