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Break Clauses in a Commercial Lease - FAQs

Break Clauses in a Commercial Lease - FAQs
A break clause is a provision in a lease which enables either party (or both) to terminate the lease early. Our Property Litigation Team looks how to exercise this clause and the usually very specific terms you need to adhere to.0 Advanced issues found▲  0 Advanced issues found▲     When can a break clause be exercised...
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511 Hits

What are property related professional negligence claims?

What are property related professional negligence claims?
If you hire a property professional, they have a duty to you to provide work of a sufficient standard. If that duty is breached and causes you loss, then you may well have a professional negligence claim. Typically, professional negligence in property matters relates to a property transaction and the professionals are solic...
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543 Hits

“What actually amounts to Practical Completion?” Mears Ltd v Costplan Services (South East) Ltd

“What actually amounts to Practical Completion?” Mears Ltd v Costplan Services (South East) Ltd
If you take a lease of a 'work-in-progress' with no completion date, you may rely on 'practical completion'. But when a builder says that works are 'practically complete' and you disagree, it could end up in court... Mears Limited entered into an Agreement for Lease with Cost Plan Services (Southeast) Limited to take a 21-y...
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489 Hits

Practical Completion in Construction Contracts and their affect on Agreements for Lease

Practical Completion in Construction Contracts and their affect on Agreements for Lease
Practical completion is generally the point at which an 'expert' will confirm that a building project is complete, except for minor defects that can be put right without undue interference to an occupier. An Agreement for Lease will rely on this date and problems often arise when deadlines are not met or the level of acceptable 'minor defects' is d...
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1387 Hits

The Accidental Landlord

The Accidental Landlord
Stephen Eccles, our Litigation Partner, considers how a property owner can be caught by legislation relating to commercial property. ​ We have recently encountered a number of cases where a landlord has allowed a tenant into possession of commercial property in exchange for rent and has then been alleged to have created a 1954 Act Business Tenancy ...
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2342 Hits

CPSEs and Failure to Communicate

CPSEs and Failure to Communicate
Many landlords view Commercial Property Standard Enquiries with a sense of dread. However, they are integral and failure to keep them updated can cause issues.It can appear unreasonable for the landlord to have to complete lengthy replies to enquiries for a simple lease transaction. Many solicitors, including ourselves, regularly assist landlords w...
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1250 Hits

The Importance of Lease Registration

Commercial-Lease-1
Another recent high court decision regarding effective service of a break notice highlights the importance of registration following the lawful assignment of a commercial lease.

In Sackville UK Property v Robertson Taylor Insurance Brokers Limited and Integro Insurance Brokers Limited [2018] EWHC 122 (Ch), the landlord rejected service of a break notice by the new tenant on the ground that the notice was invalid, as it had been served by a party who was merely a beneficial owner and not the tenant at the time the notice was served. 

On an assignment of a commercial lease, the existing tenant is generally required to obtain the consent of the landlord to assign (‘transfer’) the remainder of the term of the lease to a new party, known as the assignee. When a registered leasehold title is assigned, a transfer deed is executed by the parties and sent to land registry to enable the assignee to be registered as proprietor of the leasehold title following assignment.

On the facts of this case, the landlord had granted consent to the assignment of the lease. However, the assignee failed to register a change in the ownership of the leasehold title at Land Registry on the mistaken belief that the assignment was sufficient to transfer the remainder of the lease. By failing to register the transfer of the registered legal title, the assignment took effect in equity only and the legal estate did not vest in the assignee. 

The new tenant purported to serve a break notice in accordance with the terms of the lease.  It is always advisable to obtain legal advice when serving a break notice, as this is one of the most litigated clauses in commercial leases. 

In this case, the landlord rejected the notice as invalid because the tenant had failed to register themselves as legal proprietor, and the high court agreed with the landlord; a disposition of a registered estate does not operate at law until the disposition is completed by registration.

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861 Hits

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