Give Me A Break: Why Break Clauses Matter

Summary and implications

The power is back with the landlords. After the dust has settled on two important Court of Appeal decisions relating to tenant's break options, it is now the case that:

• unless there is an express apportionment clause, it will be difficult for a tenant to argue that it should be entitled to an apportioned refund for rents and other sums paid in advance of, but which relate to the period after, a break date (the broken period); and
• non-compliance with a mandatory requirement of a break clause (or any other option) will render a break notice invalid.

2013: the year of the tenant

2013 saw two tenant-friendly decisions:

• First, there was Marks and Spencer v BNP Paribas, where it was held that the landlord did have to repay an apportioned amount of rent and other sums which related to the broken period.