Keep an eye on the time: Don’t lose your break
Let my pain be a lesson to all. I recently had to join the queue outside the Passport Office when 48 hours before my family and I were due to depart on our break I discovered that there was only five months and 23 days left on my daughter’s passport writes May Ozga, associate with Greenwoods GRM LLP.
She needed at least six clear months of validity in her passport to enter the country of our destination.
Sadly, despite my pleas, the Passport Office was unable to assist on this occasion as passports for children under the age of 16 take at least one week to be processed. Our household was not a happy place when it was confirmed that we could not go on our break!
The same process applies to the service of break notices in commercial leases. All too often, commercial tenants forget to pay strict heed to the notice period in their leases before they exercise their break rights.
Leases often stipulate that a tenant must give no less than six months written notice to the landlord of its intention to break the lease on a specific date.
It is crucial that a tenant adheres to the notice periods in their break clause and any other break conditions, in order to validly and successfully exercise its break right.
If the lease specifies that no less than 6 months’ notice must be given, the tenant must give at least this and not for example, 5 months 23 days. This is important because a landlord is entitled to say that as the break notice has not been exercised correctly, and as the lease has not ended on the break date it therefore continues. The tenant ends up continuing to pay for a lease it no longer wants and having to continue to observe the covenants under its lease.
The tenant’s only way out of the unwanted lease will be to either negotiate a surrender of the lease, or if the lease permits assignments, the tenant could find a willing and acceptable assignee.
The tenant will need to bear in mind that the landlord will have the upper hand in those circumstances. The landlord will be aware that the tenant failed to exercise its break right validly and is desperate to go. The tenant may end up having to pay a landlord a hefty surrender premium if the landlord agrees to accept a surrender of the lease.
It is crucial that tenants keep track of and diarise their break dates, diarise ample time in advance of their break date to obtain any legal advice, serve their break notices in good time and comply with any break conditions.
If a tenant serves its break notice well in advance it would also hopefully mean that if there is any defect in the notice, the tenant might still have sufficient time to re-serve it.
Don’t lose your break! If in doubt seek legal advice well in advance of any plans to vacate!