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ARTICLE · 01 MAY 2014

Conditional Break Clauses And Breach - Again!

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Arlington Business Parks GP Limited v Scottish & Newcastle Limited [2014] CSOH 77 considered whether notices served by the tenant, seeking to exercise a break option under two separate leases, were valid and effective.

United KingdomReal Estate and Construction
Gillian Craig
Gillian Craig
Julie Hamilton
Julie Hamilton
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Arlington Business Parks GP Limited v Scottish & Newcastle Limited [2014] CSOH 77 considered whether notices served by the tenant, seeking to exercise a break option under two separate leases, were valid and effective.

Arlington leased two office premises to Scottish & Newcastle Limited in Edinburgh. The leases both expired in 2023, but could be broken as at 7 May 2013 by the tenant giving twelve months notice. Scottish & Newcastle served notices on 3 May 2012 and subsequently invested £1.3 million to ensure both premises were in proper condition as at termination. The landlord did not accept that the leases were broken on 7 May 2013, and raised an action for payment of rent.

The court was asked to interpret the break clause, which obliged the tenant to not be "in breach of any of their obligations (under the lease in question) at the date of service of such notice and/or the termination date." Lord Malcolm read this as meaning that "a notice is invalid if the

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