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Commercial property update

Magnus Hassett, James Noble and Amy France consider break clauses and vacant possession, uncompleted leases, superior landlord's consent and occupiers' liability

7 November 2011

Vacant possession

The operation of break clauses in leases remains a fruitful source of potential disputes. Tenants looking to bring their leases to an end may find themselves up against landlords who, in a difficult letting market, try to find reasons to keep their tenants on the hook. From a tenant’s point of view, strict compliance with any conditions attached to a break option remains essential.

A condition that is often attached to the exercise of a tenant’s break is the giving of vacant possession. The Court of Appeal has recently again made it clear that, in order for such a break option to be effective, a tenant must strictly comply with such an obligation.

The case of NYK Logistics (UK) Ltd v Ibrend Estates BV [2011] EWCA CIV 683 concerned a tenant that had exercised its break but which then remained in occupation for a week after the break date to finish off works required under a schedule of dilapidations. Before the ...

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