It is usually the case that a tenant can bring the lease to an end on the lease expiry date by vacating the premises and handing back the keys to the landlord.

Leases which are excluded from the Landlord & Tenant Act Security of Tenure and Compensation Provisions do not permit the tenant to remain in occupation beyond the contractual term end. If the tenant does not vacate then it becomes a trespasser.

If the lease is a Business Tenancy and the tenant does not vacate the premises on the contractual expiry date, the lease will continue until it is brought to an end under the Landlord & Tenant Act.

It is therefore essential to obtain proper professional advice and we can advise you on this matter in conjunction with your solicitors.

This is where a tenant exercises a break clause to end a lease on a specified date.

As a general rule, specific steps have to be taken for example, the service of a Notice. The Notice is a legal Notice and should be served by solicitors and time is generally of the essence in the service of a Notice. Failure to serve the notice in the correct manner and time can invalidate the break.

It is common for there to be conditions attached to a break clause in order to make them valid. They include:

1. Vacant possession
2. Payment of rent or rents
3. Specific reinstatement obligations
4. A requirement to make a payment to the landlord by a specified date
5. Performance either, full, material or substantial performance of lease covenants by the tenant

A failure to meet any such condition can render the break clause invalid with disastrous financial consequences.

A lease is a contract which generally requires the tenant to hand back the premises in a specified condition which for example may include the reinstatement of alterations, redecorated, repaired and recarpeted.

Generally on a lease expiry a tenant who will have a choice as to whether it carries out the work before the expiry date of the lease or not.

There may be limitations on the expiry of a lease on the extent of any works required, for example, if the landlord intends to substantially refurbish or not.

There may be limitations on any works required if the landlord intends to substantially refurbish or redevelop.

In other cases, the costs can be significant greater if the works are not carried out by the tenant prior to the end of the lease.

A tenant generally has no right to carry out such works of reinstatement after the expiry of the lease. The landlord may be able to claim not just the cost of the works but further sums for loss of rents and fees and the tenant will lose control on the actual costs of the works.

The acquisition of new premises will either be by way of taking a new lease or alternatively an assignment of an existing lease.

In the case of a new lease, we will negotiate and advise on your behalf the following terms:-

1. Lease length and flexibility by incorporation of break clauses.
2. Cost of occupation, rent, rates, service charge and insurance.
3. Incentives including rent free periods and capital payments.
4. Rent reviews
5. Schedules of Conditions.
6. Specification
7. Warranties
8. Service Standards
9. Tax efficient structures

In the case of an assignment of an existing lease from either tenant, you will effectively take over the lease and all the obligations that go with it. The value of the lease will be dependent on the state of the market and how favourable or otherwise the term of the existing Leases are.

Ending a lease either on expiry of the contractual term or by the service of a break notice is a highly complex and specialist area. Spring4 are able to advise you on these matters to help bring your lease to an end at minimum cost.