The High Court has held that a tenants decision not to remove some of their partitioning has rendered their break option invalid.
Riverside Park Ltd granted a 10 year lease to NHS Property Services with a fifth year tenant break clause. The break option was subject to 6 months notice and vacant possession on or before the break date. The tenant activated the break clause by serving notice and vacated the property, however did not completely remove all of their partitioning.
The case focused on whether the partitioning was a tenant’s ‘chattel’ and therefore required to be removed to comply with the break clause.
The court held that the partitions were chattels and the failure to remove it meant that vacant possession had not been provided. The court made this decision on the basis that they were not fixed to the structure of the property and could therefore be removed without damage to the partitions or the property itself and could be reused.
The outcome means that the tenant is responsible for a further 5 years rent as well as other overheads and maintenance.
This is another example of case law which has supported the landlord in a break clause dispute and shows the consequences of not complying specifically with the provisions of a break clause. The answer – seek advice in plenty of time if you are considering exercising your break option and make sure the original drafting of your break clause is properly understood.
If you need advice on the content of your lease, or any other commercial property matters then please do not hesitate to contact us on 01604 620616.
Tom Drake August 2016