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Practice paper

How to satisfy break option conditions

Emma Humphreys and Emma Preece
Journal of Building Survey, Appraisal & Valuation, 12 (1), 39-47 (2023)
https://doi.org/10.69554/DBFT7547

Abstract

This paper provides a detailed overview of how to validly exercise a break clause in a lease. While straightforward in theory, break notices frequently end up before the courts as the margin for error is small and implications high. There have been several high-profile cases in recent years where the validity of break notices has been challenged as the break clause has not been complied with ‘to the letter’. If successful, this will often result in the lease continuing (including obligations relating to payment of rent) until the lease expires or terminates for some other reason. This paper addresses some of those challenges, including ensuring valid service of a break notice and compliance with common conditions attached to the break (such as returning the property with vacant possession and complying with the lease covenants). There is a wealth of case law in each of these areas, with this paper providing an insight on the key issues to be aware of, and most notable reported cases.

Keywords: service; conditions; vacant possession; Mannai; Capitol Park

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Author's Biography

Emma Humphreys advises on the full range of contentious issues arising with commercial and residential property, with a particular focus on break rights, insolvency matters, arrears, forfeiture, dilapidations and business tenancy renewals. Emma also deals with contractual and development disputes, specialising in rights of light and Electronic Communications Code issues, including the removal of telecoms masts and communications cables. Emma’s work is advisory — to avoid and/or settle disputes — as well as involving the conduct of litigation. She also sees part of her role as trusted adviser to assist clients with preparing for future developments in the property world and the associated legal issues. During recent years, this has involved advising property owners and developers on how buildings should prepare for developments in drone technology and assisting estate owners with making electric vehicle charging points available within their existing properties. Emma lectures widely on property litigation issues and has chaired many of the firm’s Property Patter podcasts during the past two years. She writes for various publications, including Estates Gazette. She regularly provides updates and insight on dilapidations cases for the RICS Built Environment Journal. She also summarises cases dealing with restrictive covenants for the Property Law UK website. Emma is an honorary member of Arbrix and a member of the RICS Telecommunications Forum. She is also former Chair of the Training and Education Committee of the Property Litigation Association and has sat as a member of the Steering Group of the RICS Dilapidations Forum and the South East Committee of Women in Property. She is qualified as a mediator.

Emma Preece specialises in commercial, residential and agricultural property litigation. Emma has experience in a range of landlord and tenant disputes such as lease renewals under the Landlord and Tenant Act 1954, dilapidations and possession claims, rent arrears and service charge recovery and issues arising on lease termination (such as the exercise of break clauses, validity of break notices, and compliance with break conditions). Emma also advises on a range of third party and adverse interests in land such as easements, boundary disputes, adverse possession and trespass, and regularly deals with contentious property issues arising from agricultural holdings, including the succession of agricultural tenancies and disputes relating to farm business tenancies. Emma acts for a broad range of clients include large corporations, developers, commercial and residential landlords and tenants, large land-owning estates and high net worth individuals. Emma is a committee member of the Junior Property Litigation Association in the southwest, and a member of the Property Litigation Association and Women in Property. She also contributes to the Estates Gazette and Property Law UK, as well as creating digital content.

Citation

Humphreys, Emma and Preece, Emma (2023, June 1). How to satisfy break option conditions. In the Journal of Building Survey, Appraisal & Valuation, Volume 12, Issue 1. https://doi.org/10.69554/DBFT7547.

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cover image, Journal of Building Survey, Appraisal & Valuation
Journal of Building Survey, Appraisal & Valuation
Volume 12 / Issue 1
© Henry Stewart
Publications LLP

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