Break Clause in Lease

[Kaib]

I was wondering if someone could clarify the following break clause. I would like to know whether I can terminate the lease any time after the first two years or it has to be done bang on the 2 years? Thanks

1.1 Break option

1.1.1 The Tenant may terminate this lease on the expiry of the second anniversary of the Term on giving not less than 6 months’ prior written notice to the other provided that on expiry of any notice given by the Tenant to the Landlord the Tenant has:

(a) paid the Rent and Insurance Costs and any VAT on them up to the date of expiration of the notice;

(b) vacated the Property and returned all keys to the Landlord; and

(c) terminated all subleases.

1.1.2 Any termination of the lease in accordance with clause 20.8.1 is without prejudice to the continuing liability of the Tenant for any sums due under this lease or for a breach of covenant or condition that occurs before expiry of the notice.

1.1.3 The Landlord will reimburse to the Tenant any proportion of the Rent and Insurance Costs and any VAT on them paid by the Tenant and which relates to a period after termination.

 

[Chris Ashdown]

I read it that you must complete the first 2 years, and if you want to cancel the lease for the period from two years after the original start then you must inform the landlord at least 6 months prior to the new lease extension , so notify them 6 months before which would be 18 months from the start of the lease, often there is no leaway so not either before or after the 18 month period

Just my interpretation

 

[ComPropSolicitor]

Its a poorly worded clause. that said, it means that you need to give at least 6 months notice to the Landlord ahead of the break date. One of the requirements of satisfying the Clause is that you give vacant possession which does mean that advice to you could be to serve notice to exercise the break clause on the grant of the Lease - if you want to stay then you don't give vacant possession on the break date - if you want to leave you get out. However, avoids issues with the notice as you give more than adequate time.

That said, advice is to serve the notice as much in advance as possible.

It does, however, only allow you to end the Lease on the second anniversary. Again, this is bad wording and should be a defined term and also given a fixed date really to avoid trouble with misinterpretation.

 

[ComPropSolicitor]

I read it that you must complete the first 2 years, and if you want to cancel the lease for the period from two years after the original start then you must inform the landlord at least 6 months prior to the new lease extension , so notify them 6 months before which would be 18 months from the start of the lease, often there is no leaway so not either before or after the 18 month period

Just my interpretation

Means that it can only be terminated on the second anniversary of the start date of the Lease but to terminate you need to give 6 months notice. Effectively meaning that you have to have made a decision as to if you want to stay at the Property or not after eighteen months.

 

[Kaib]

Thank you guys, I do want to leave after two years.

So can I give notice before 18 months have passed? Or does it have to be bang on 18 months?

I'm guessing if I don't serve notice at 18 months, I will not be able to exercise the break clause afterwards, is this correct? Or can I give 6 months notice any time after the first the first two years?

Also, would you recommend hiring a solicitor for this purpose or can it be done without one.

Thanks

 

[ComPropSolicitor]

"not less than 6 months notice"

if you want to leave - serve the notice now and make sure on the break date that you have satisfied (a) (b) and (c) or the Lease will not be deemed to have come to an end.

 

[ComPropSolicitor]

I also still don't think you understand. The break date is 2 years after the start date of the Lease. There is only one date. It is not continuing. You get one chance to end the Lease. After 18 months if you have not served notice the right falls away. It does not merge or form any other date.

 

[kulture]

i would also recommend seeing a solicitor. There is too much potential liability. A few hundred spent now could save thousands in the future.

 

[Kaib]

"not less than 6 months notice"

if you want to leave - serve the notice now and make sure on the break date that you have satisfied (a) (b) and (c) or the Lease will not be deemed to have come to an end.

If I serve the notice right now (before the 18 months), at what point do I have to vacate the property? Will I have to vacate immediately, at 18 months or at 2 years?

 

[Kaib]

i would also recommend seeing a solicitor. There is too much potential liability. A few hundred spent now could save thousands in the future.

You're right, I think I will see a solicitor about this.

 

[Kaib]

If you do not have a solicitor already I am more than happy to quote you and explain in full detail after reviewing the Lease what you need to do.

I do have a solicitor but will get in touch if I need a quote.
Can you give me a rough idea of solicitor cost for lease termination?