Tenants: Can a break clause be used to re-gear my lease?

Over the last year, many landlords and tenants have been reviewing their lease arrangements with a view to reducing costs or risk. When existing lease terms are renegotiated between landlords and tenants, this is known as “re-gearing” the lease. When landlords and tenant negotiate lease terms, both parties will be looking to benefit from any variation. Recently, we have seen tenants offering not to exercise their break option in a lease in return for a further rent-free or reduced rent period, or the removal of a rent review clause. Tenants benefit from reduced costs, whilst landlords benefit from the security of a tenant at the property for a longer period. If you are a tenant with an upcoming break clause, it is worth considering this opportunity for re-gearing your lease. However, tenants should ensure that any formal variation to the lease is completed prior to the start of the break clause notice period, to ensure that the opportunity to break the lease is not missed if a variation to the lease is not agreed. Please click here to see our article on the issues that need to be considered when exercising a break clause. If you do agree a variation to your lease terms, it is important that these are formally documented to ensure that they are binding on the parties. If you have any queries about break rights and break clauses, or want to find out more about commercial leases, please contact Daniel York, Partner, in our Real Estate team, or email your query to realestate@herrington-carmichael.com; call us on 01276 686222 or use the contact form below. This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter. 19th March 10:00 am – 1:00 pm Online via Zoom The Property Roundtable is an open forum for professionals from across the property industry to discuss matters affecting property development. 

Top Legal Insights

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Commercial Lease: The Financial impact on Landlord and Tenant

Divorce in Lockdown: Can I get some discreet legal advice?

We have spoken to clients who are unfortunately experiencing some family issues, and would like to obtain expert legal advice, yet don’t know how…

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Why is having a will so important?

It is entirely up to you if and when you want to create a Will, but it is important to be aware of the consequences of not having a Will.

Award winning legal advice

We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2020 by Legal 500 and Alistair McArthur is ranked in Chambers 2020.

London

60 St Martins Lane, Covent Garden, London WC2N 4JS +44 (0) 203 755 0557

Camberley

Building 2  Watchmoor Park, Riverside Way, Camberley, Surrey  GU15 3YL +44 (0)1276 686 222

Wokingham (Appointment only)

4 The Courtyard, Denmark Street, Wokingham, Berkshire RG40 2AZ +44 (0)118 977 4045

info@herrington-carmichael.com

© 2020 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority.

Privacy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies   |   Client Feedback >