Exercising Break Clauses, Rent Arears and the Current Pandemic

In these very uncertain times, it is hardly unsurprising that we are seeing a surge in the number of Tenants looking to exercise their break clauses under the terms of their commercial leases. With home working now seemingly becoming the norm and employers, even as large as Barclays, realising that large office space is perhaps a thing of the past, Tenants are looking to restructure their whole business model, including their business premises.

Tenants should however be aware that the vast majority of break clauses contain provisions that rent must be paid to date before a break clause can be activated.

Although the provisions of section 82 of the Coronavirus Act stop the Landlord from seeking to forfeit a lease for non-payment of rent, the Act does not grant a rent free period and rent under the lease remains due.

Therefore, any Tenant looking to break their lease in accordance with a lease’s break clause is likely to have to bring rent completely up to date before they are able to do so, even if they are relying on the government’s emergency legislation on forfeiture.


For further information on Commercial and Business Leases, re-negotiating your Lease in the “new normal” or exercising break clauses, why not contacts one of Alexander JLO’s expert lawyers for a free no obligation consultation and see what we can do for you?

 

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