Break Clauses

1. The Nature of a Break Clause A Definition A Break Notice is not a Notice to Quit The Right to Terminate is Unilateral Forfeiture and Acceptance of Repudiatory Breach Distinguished A Break Clause is a Type of Option The Applicability of Braganza Restrictions on the Exercise of a Break Clause Break Clauses can Appear in All Types of Tenancies and in Many Different Forms 2. Formalities and Registration Formalities Registration 3. Assignment The Historical Position Tenancies Granted before 1 January 1996 Tenancies Granted on or after 1 January 1996 Formalities for Assignment Restrictions on Assignability Severance of the Reversion Assignment of Part of the Demise The Position of Equitable Assignees The Position where the Break Clause is not Contained in a Lease 4. Who May Exercise the Break Clause Introduction Where the Lease is Silent or Unclear Joint Lessees Joint Lessors The Survivor(s) of Joint Lessors/Lessees Where the Landlord is also One of the Tenants Concurrent Lessees The Position with Leases Taking Effect in Equity Equitable Assignees of the Term or Reversion Upon Reassignment of a Lease Containing a Personal Break Clause Former or Non-landlords/Tenants Agents Partnerships Insolvency Receivers and Managers Personal Representatives 5. The Form and Content of the Break Notice Introduction Compliance with Indispensable Conditions Mistakes in the Break Notice: The General Approach The Objective Approach to the Construction of Notices The ‘Relevant Objective Contextual Scene’ Mistakes as to the Break Date Mistakes as to the Identity of the Serving Party Mistakes as to the Identity of the Intended Recipient Mistakes as to the Identity of the Demised Premises Break Notices Marked ‘Without Prejudice’ Break Notices Marked ‘Subject to Contract’ 6. The Time for Exercise of the Break Clause and Service of the Break Notice Introduction References to the ‘Commencement of the Term’ The Time for Exercise of the Break Clause The Specified Period of Notice The ‘Corresponding Date’ Rule Other Fractions of Time The Effect of Late Service Acceptance of Short Service of a Break Notice 7. The Method of Service of a Break Notice Introduction Compliance with the Prescribed Contractual Method for Service Particular Contractual Methods for Service ‘Indirect’ Service Section 196 of the Law of Property Act 1925 Section 7 of the Interpretation Act 1978 Service at Common Law 8. On Whom the Break Notice Should be Served Introduction Joint Lessees/Lessors Multiple Parties Concurrent Lessees The Position with Leases Taking Effect in Equity Equitable Assignees of the Term or Reversion Former Landlords/Tenants Agents Partnerships Insolvency Receivers and Managers Where the Intended Recipient has Deceased Personal Representatives 9. Conditions in a Break Clause: General Principles Introduction Identification of the Conditions The Principle of Strict Compliance De Minimis Failures to Comply with Conditions The Time for Compliance Spent Breaches Words of Qualification Settlements/Side Agreements Service of a Break Notice without Fulfilling Conditions 10. Particular Conditions in a Tenant’s Break Clause Introduction Vacant Possession Payment of Rent and Other Sums Repairing Obligations Reinstatement Obligations 11. The Recovery of ‘Overpaid’ Rent and Other Sums Introduction Implication of a Term in the Lease Implied Agreement Restitution for Unjust Enrichment 12. Redevelopment Break Clauses Conditions in a Landlord’s Break Clause Intention, Desire and Other Linguistic Formulations The Scope of the Break Clause Redevelopment Break Clauses under the 1954 Act Redevelopment Break Clauses under the 1993 Act The Electronic Communications Code 13. Invalid Break Notices: Waiver, Estoppel and Withdrawal Introduction Waiver and Estoppel: General Principles The Operation of Waiver and Estoppel in the Break Clause Context Unilateral Waiver in Respect of Performance of Conditions The Server of a Notice Cannot Rely upon his Own Wrong Silence Withdrawal of a Break Notice Countermanding a Break Notice Sequential Break Notices 14. The Effect of Exercising a Break Clause As between Landlord and Tenant As Regards an Underlessee 15. Break Clauses and Compulsory Purchase Introduction Compensation: General Principles Compensation for an Interest Subject to a Break Clause 16. Break Clauses and Rent Review Introduction Procedural Relevance Substantive Relevance 17. Professional Liability Introduction Failure to Advise During a Transaction Failure to Remind of an Approaching Break Date Failure to Draw Attention to Preconditions Failure to Give Proper Notice Contributory Negligence 18. Business Tenancies Introduction Termination of Business Tenancies by the Landlord Termination of Business Tenancies by the Tenant The Position of Sub-tenants The Extent of the ‘Broken’ Demise The Insertion of Break Clauses into New Leases under the 1954 Act 19. Residential Tenancies Introduction Termination of Rent Act Tenancies Termination of Assured Tenancies Termination of Assured Shorthold Tenancies Termination of Contractual Tenancies without Any Security of Tenure 20. Agricultural Tenancies Introduction Termination of Tenancies of Agricultural Holdings Termination of Farm Business Tenancies Allotments 21. Drafting Break Clauses General Remarks Matters to be Addressed when Drafting a Break Clause 22. Practical Advice when Exercising a Break Clause Advice for the Party Seeking to Exercise the Break Clause Advice for the Recipient of a Break Notice Litigation Tactics for the Tenant Litigation Tactics for the Landlord