Rent refunds after break?
Weak demand from tenants for commercial property has meant many changes to the ‘traditional commercial lease’. One example is that landlords increasingly agree leases which give the tenant the right to bring its lease to an end early. These rights are known as ‘break clauses’.
This is an area of conflict. Landlords understandably are often unwilling to let tenants go without a struggle. Many tenants fail to comply with the terms of their break clause. As a result, some have been locked in to their lease for the rest of its term.
Typically the rent (at least) must be paid up to the date on which the lease is to end. That may require the tenant to pay rent beyond that end date. If it does not, the break clause will not work.
Well drawn leases specify that the landlord must refund rent etc. paid for the period after that end date. A recent case where the lease did not, but the court still held that the landlord had to refund those sums, is now to go to appeal.
Watch this space!