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The High Court has recently held that Cancer Research failed to break one of its leases effectively.
In this case, as is common, the lease required payment of rent quarterly in advance. It also contained a break clause allowing a tenant to give notice provided that all the terms of the lease had been complied with.
The tenant gave notice and, in respect of the last quarter’s rent falling due, paid an amount proportionate to the rent for the period between the quarter day and the termination date. The High Court held that the notice had not been effective to end the lease because the tenant had not paid the full quarter’s rent in advance. As a consequence it had not complied with the conditions of the lease and therefore the break was ineffective.
This case, the latest in a number of recent cases concerning failed breaks, shows that failing to comply with the terms of a lease can be a costly affair, particulary in the current market.
The Government appears set to announce plans on ‘living with Covid to restore freedom’. With the success of the retail and hospitality sector key to recovery, what protections will be on offer to tenants to deal with Covid-19 rent arrears?
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Break rights have proved a fertile source of litigation over the last few years. More often than not, tenants have found themselves on the wrong end of the decisions. However, a Court of Appeal decision yesterday has bucked that trend.
One of the requirements for tenants to contract out of the security of tenure regime contained in the Landlord and Tenant Act 1954 is that they make a simple or statutory declaration before entering into the lease.
Landlords should reconsider summary judgment if a Part 26A restructuring plan is pending.
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