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rent battle following the exercise of a break right

21 May 2013

Marks & Spencer (M&S) has won its £1.1m claim against the landlord of its former head office in Paddington.

M&S was claiming for overpaid rent, service charges, insurance rent and car park licence fees after it had exercised a break clause in January 2012 – despite there being no contractual right to do so.

The judge rejected M&S’s first claim that sub-underleases for the premises expressly provided for repayment of rent and other charges for the period after the break clause; instead the judge accepted M&S’s second claim that a term should be implied to that effect adding such a term would be “eminently reasonable”, what the parties meant and “necessary to give business efficacy to the lease”.

Whilst we wait to see if the landlord will appeal at least we have the glimmer of common sense on this topic.

In the meantime our advice is that you always expressly deal with this issue in the lease in order to prevent any ambiguity.

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