Break clauses in leases

This document contains key points arising out of the drafting and exercise of break rights in leases.

Content includes:

• Preliminary check points for tenants.
• The effect of the break: rent liability, covenants liability, 1954 Act, rent review.
• The effect of the break on derivative interests.
• Withdrawing a break notice.
• Break rights and surrenders contrasted.
• Break pre-conditions: compliance with covenants; payment of rent; vacant possession.
• Expressing the break date.
• Time of the essence.
• Service of the notice.
• Removing register entries relating to the lease.

Cases covered:
Dun & Bradstreet Software Services (England) Ltd v Provident Mutual Life Assurance Association [1998] 2 EGLR 175.
Brown & Root Technology Ltd v Sun Alliance & London Assurance Co. Ltd [1997] 18 EG 123.
Olympia and York Canary Wharf v Oil Property Investments [1994] 2 EGLR 48.
Walsh v Lonsdale (1882) 21 Ch D 9.
Clun's Case (1613) 10 Co Rep 127a.
Ellis v Rowbotham [1900] 1QB 740 CA.
Garston v Scottish Widows Fund [1996] 23 EG 131.
Scholl Manufacturing Co. Ltd v Clifton (Slim-Line) Ltd [1967] Ch 41.
Barrett v Morgan (2000) 2 AC 264.
PW & Co. Ltd v Milton Gate Investments Ltd [2003] EWHC 1994 (Ch).
JIS (1974) Ltd v MCP Investments [2003] EWCA Civ 721.
Central Estates Ltd v Sec. State for the Environment [1997] 1 EGLR 239.
Bairstow Eves (Securities) Limited v Ripley [1992] 2 EGLR 47.
Fitzroy House Epworth Street (No 1) Ltd v The Financial Times Ltd [2006] EWCA Civ 329.
Commercial Union Life Assurance Co Ltd v Label Ink (2001) L & TR 29.
Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd EWHC 1008 (Ch).
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 1 EGLR 57.
Peer Freeholds Ltd v Clean Wash International Ltd [2005] NPC 26.
WX Investments Ltd v Begg [2002] EWHC 925 (Ch).
Stephenson & Son v Orca Properties [1989] 2 EGLR 129.
The Prudential Assurance Company Ltd v Exel UK Ltd [2009] EWHC 1350 (Ch).
Linpac Mouldings Ltd v Aviva Life [2010] EWCA Civ 395.
Standard Life Investment Property Holdings Limited v W&J Linney Ltd [2010] EWHC 480 (Ch).
Orchard (Developments) Holdings plc v Reuters Ltd [2009] EWCA Civ 6
Hexstone Holdings Ltd v AHC Westlink Ltd [2010] EWHC 1280 (Ch).
NYK Logistics (UK) Ltd v Ibrend Estates BV [2011] EWCA Civ 683.
Quirkco Investments Ltd v Aspray Transport Ltd [2011] EWHC 3060 (Ch).