Break options in commercial leases represent an opportunity to revisit whether the needs of the parties have changed since the lease was originally entered into and if necessary bring the lease contract to an end.
A landlord will generally have redevelopment/refurbishment motives in exercising a break but alternatively may wish to occupy for their own use. Tenants may be in the process of expanding or downsizing and welcome the opportunity to terminate for that reason. Where property is over-rented break options can be a valuable escape route from the burden of this commitment. This decision often needs to be balanced against any inertia towards relocating particularly when dilapidations and the write off of fit out works are taken into account.
For a party contemplating exercising a break it is critical that they strictly observe the procedures described in the lease in terms of timescale and conditions attached. Failure to do so may prejudice the validity of the break notice at considerable expense depending on the remaining duration of the lease.
For further information please contact Jeremy Gilbert.
 Case Study
Implementation of reinstatement and repair works within 6,500 sq. ft. office floor at Royal London House, Finsbury Square, London, E.C.2, in order to successfully terminate a lease held by Misys Plc.
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