Break clause invalidated by failure to follow letter of the law

posted by AlisonHoy

A business tenant has failed to apply a break clause in its lease because the notice document didn’t follow the letter of the law correctly.

The tenant had a 25-year lease and wanted to activate the break clause. The clause stated that any notice exercising the right to break “must be expressed” as being given under the Landlord and Tenant Act 1954 s.24(2). 

The tenant complied with all aspects of the clause including serving notice within the appropriate time period before terminating the lease. However, it didn’t specifically state its intention under s.24(2).

The landlord rejected the notice, saying it wasn’t valid.

The case went to court and the judge ruled that the notice was valid even though the tenant hadn’t complied with the clause.

However, the Court of Appeal overturned the ruling stating that notice had to be given in the way stated in the break clause.

The clause was emphatic and used the word ‘must’. While the tenant had complied with all other aspects of the clause it had failed to give notice under s.24(2). The notice was therefore invalid.

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