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Exercising a break clause: getting it right!
December 5, 2025
By Heledd Evans
For businesses with commercial premises, there is a lot of legislation for landlords and tenants to comply with, and when circumstances change unexpectedly, there can be major fallout when it comes to the terms and conditions of a lease.
If changes in your business’ circumstances are significant, whether that’s expansion, closure, or a change of premises, a break clause may be used.
A break clause is a provision within a lease which can allow a landlord, a tenant or, in some cases, both, to terminate a lease before its planned termination date. A lease will usually require a landlord or a tenant to serve a break notice to notify the other party that they wish to terminate the lease on a specific break date.
To ensure a break notice is valid, it must be served correctly with all pre-agreed conditions satisfied.
Exercising a break clause requires close compliance with the terms of the lease as well as an understanding of the case law in the area. A small mistake or lack of compliance can easily invalidate the break notice, preventing parties from taking a break from the lease.
A break clause is a contractual remedy – it is therefore very important to take the time to understand the terms before taking any necessary steps.
Case law in England and Wales demonstrates that strict compliance is needed with the terms of the lease in order for the break to be valid. Examples of pre requisites that might be included are:
The way a break notice is noted, presented and delivered to parties involved have strict rules. The ‘form’ usually means the break notice being in writing, clearly identifying the parties to the lease and stating the date of the break. Case law has demonstrated that any small error can deem a break notice invalid, including sending a notice on different colour paper to the colour of paper that is required by the break clause.
Where a lease has been transferred or assigned after its original date of entry, parties must be very careful to ensure they check who the correct party is to serve the notice on. Mistakenly addressing the notice to an original party (as opposed to a current party) can also render the break notice invalid.
A lease will usually require the notice to be served by a certain method. It’s important that this is complied with or else, it can be deemed that the notice was not validly served.
An invalid break can mean that a tenant or landlord remains legally bound to a lease far longer than they may have wanted. This can be an issue for landlords who, for example, may have wanted to undergo development work at a property, as well as being problematic for business tenants who may no longer be in a financial position to continue with the lease, or may want to try a different enterprise.
If you’re stuck in the lease, you may need to pay a significant premium to be released from the tenancy.
Great care must be taken when exercising a break clause. Break clauses include many technical points which may seem trivial, but can easily invalidate the break. Seeking legal advice to understand the requirements and rigidly following the practical advice is crucial to ensure your break is valid.
If you have any concerns or queries related to break clauses or any of the above, get in touch with Darwin Gray’s specialist property team by calling 02920 829 100 for a free no obligation call or fill in our Contact Us form.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
