In Riverside Park Ltd v NHS Property Services Limited [2016] the High Court provided a helpful reminder for commercial tenants of the need to fully comply with any conditions for exercising break rights. Otherwise, as in this case, the break notice will not be effective and the tenant will continue to be bound to pay rent and comply with the terms of the lease.
Tenants should check carefully the conditions for exercising a break clause in a lease and instruct a solicitor if there is any doubt as to the tenant’s ability to satisfy such conditions in full.
In this case, when the lease was granted, the premises were open plan. The tenant subsequently carried out various works, including the installation of partitions. The lease provided that, in order to exercise the break clause, the tenant was required to provide vacant possession of the premises on the break date. Although it vacated the premises, the tenant did not reinstate the premises to open plan. The court held that the partitions were chattels that substantially prevented or interfered with the landlord’s right of possession. This meant that the tenant had not given vacant possession and the lease continued.
