Q&As

Is there any guidance for UK commercial tenants who need to fulfill break option obligations by vacating premises during the current coronavirus (COVID-19) restrictions?

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Published on LexisPSL on 09/04/2020

The following Property Q&A provides comprehensive and up to date legal information covering:

  • Is there any guidance for UK commercial tenants who need to fulfill break option obligations by vacating premises during the current coronavirus (COVID-19) restrictions?
  • Closure of businesses
  • Restrictions on movement of people and gatherings
  • Health and safety and duty of care
  • What if it is, or becomes, unlawful to access the relevant premises?

Is there any guidance for UK commercial tenants who need to fulfill break option obligations by vacating premises during the current coronavirus (COVID-19) restrictions?

The exercise of an option in a lease to end the term (a ‘break option’) is often subject to conditions. Those conditions must be strictly observed, unless the lease provides otherwise.

The date on which the conditions must be complied with may vary, but an obligation to give vacant possession of the premises is usually required to be met on the break date. In order to give vacant possession:

  1. the premises should be free of any legal impediment to possession, such as a subtenancy

  2. the tenant must generally have ceased using the premises for its own purposes (save for any de minimis use), and

  3. the landlord must be able to have immediate and exclusive use and occupation of the premises without any substantial impediment (see Cumberland Consolidated Holdings v Ireland and Legal and General Assurance Society v Expeditors International (UK))

For further details and examples of cases in which the condition to give vacant possession was found to have been satisfied or not, see:

  1. Practice Notes: Break clauses and notices—exercising breaks and conditions precedent, in particular section: Vacant possession condition precedent

  2. Practice Note: Vacant possession

  3. Commentary: Conditions of option: Hill and Redman’s Law of Landlord and Tenant [4206]–[4207]

  4. Commentary: Conditional break clauses (tenant):

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