0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Forgotten your password?

Handing back an empty shell of a building did not prevent a tenant from exercising a break clause

6 July 2021

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.

The tenant had a right to break its lease on condition that it delivered vacant possession of the property to the landlord. The tenant had stripped out significant elements of the base build and landlord’s fixtures in the property and the landlord argued that, in returning the property minus those elements, it had not complied with the vacant possession condition.

Whilst the High Court agreed, the Court of Appeal did not. It ruled that as long as the property was returned free of people, chattels and interests, vacant possession had been provided (meaning the break right had been successfully operated).

Whilst tenants should look to resist break clauses which are conditional on the delivery of vacant possession, such wording is still fairly common and this decision will come as welcome news to tenants. Whilst removing too much from a property could still be a breach of the terms of a lease, a landlord’s remedy is damages – it will not of itself prevent the successful operation of a break clause.

Related opinions

Relief for landlords as the Court of Appeal confirms that leases have been validly contracted out

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.

View blog

Summary judgment stayed where part 26A restructuring plan pending

Landlords should reconsider summary judgment if a Part 26A restructuring plan is pending.

View blog

Landlords’ claims for summary judgment for ‘Covid’ rent arrears succeed (again)

A landlord’s claim for summary judgment to recover rent and service charge arrears accrued since the start of the pandemic against a non-essential retailer succeeded. Like London buses, a second such case has followed hot on its heels.

View blog

The High Court offers no comfort for beleaguered retailers

Whilst this decision may not be surprising, it will undoubtedly send a chill down the spine of retailers in a similar position to The Fragrance Shop.

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up