Break Clauses in Commercial Leases

A break clause lets the landlord or the tenant end the lease early. Break clauses are strictly construed by the courts, so getting the detail right is everything.

How breaks work

A break clause gives a right to end the lease on a set date, or on a rolling basis, by serving notice in the way the lease requires. The clause may belong to the tenant, the landlord, or both.

Conditions

Breaks are often conditional. Common conditions include giving vacant possession, having paid the rent up to the break date, and complying with the lease covenants. If a condition is not met exactly, the break can fail and the lease continues. Courts have upheld failed breaks over small sums and technical breaches, so the conditions must be satisfied precisely.

Serving the notice

The notice must be served by the method, on the party, and within the window the lease specifies. Even the address and manner of service matter. A missed deadline cannot usually be recovered, and once served, a break notice is generally irrevocable without the other side's agreement.

Take advice before serving

Because break clauses are so heavily litigated, have a solicitor review the clause and the conditions before you serve or rely on a break. Watch the interaction with rent and rates timing around the break date. See break notice served or needed in our urgent problems.

What conditions usually apply to a break clause?

Common conditions include giving vacant possession, having paid the rent to the break date, and complying with the lease covenants. If a condition is not met exactly, the break can fail.

Can a break notice be withdrawn?

Once served, a break notice is generally irrevocable without the other side's agreement, so take advice before serving.