Break clause meaning

This Flowchart sets out the requirements for a transaction defrauding creditors. This flow chart explains the requirements for a transaction defrauding creditors...

How to use this Checklist This Checklist outlines the principal clauses to cover when preparing a software development contract. For deeper commentary on matters mentioned here, consult Practice Note: System development and systems integration agreements and Precedent: Software development agreement. Targeted topics are also addressed in Practice Notes: Software development agreements—fees, expenses and disbursements and Software development—agile method. The Checklist may likewise support the preparation of a brief, non-binding heads of terms; for guidance, see Precedent: Heads of terms—commercial contracts. Use the third column to capture notes or remarks as you progress through the Checklist as it is worked through. Headings include Checklist, Further information and Notes (if any). Checklist Further information Notes (if any) Parties Confirm each party’s legal form and whether any third parties (for example, group affiliates) are intended to benefit under the proposed contract. See Precedent: Parties clause. Confirm whether any third party will underwrite performance or financial obligations. Commencement and duration ...

During any due diligence for acquiring a lease that is itself an underlease, a purchaser ought to carefully evaluate: whether the superior lease could be forfeited or ended on the operation of a break clause—this may negatively affect the leasehold’s value and the prospects of disposal or funding as well as the ability to sell on or secure finance against it whether the covenants in the superior lease and the underlease align—the purchaser might assume far more burdensome duties because of a requirement to observe strictly in practice the superior lease covenants under the underlease whether the grant of the underlease has, in substance, operated as an assignment of the superior lease In this Checklist, references to the underlease mean simply the lease being acquired, and references to the superior lease mean the lease from which the underlease was granted. Is there any obligation to comply with superior lease covenants?...

FORTHCOMING CHANGE : The Renters’ Rights Act 2025 obtained Royal Assent on 27 October 2025. For insight into how it affects residential tenancies in England, refer to Practice Note: Renters' Rights Act 2025—key provisions. This Flowchart outlines the steps for ending an assured shorthold tenancy (AST) under section 21 of the Housing Act 1988 (HA 1988) via the standard possession route, covering when to serve a section 21 notice, when to issue proceedings, and the procedural milestones up to a possession order. Where HA 1988 governs, unless the tenant chooses to leave of their own accord, a landlord may regain possession only by following the mechanisms in HA 1988, ss 8 or 21, securing a possession order and enforcing it. For more detail, see Practice Note: Assured and assured shorthold tenancies—terminating. Under HA 1988, s 21, a landlord may terminate a fixed-term AST by giving the tenant no less than two months’ written notice, exercising a break clause during the term, or at the end of, or after the...

Original news Mr K (CAS-44560-Q1C8)—12 September 2025 Summary The Pensions Ombudsman upheld a complaint concerning a scheme’s inadequate due diligence on a high-risk investment. The professional trustee was found to have breached both common law and statutory duties by committing funds to storage pods and airport parking. As the investments lacked diversification and were overly speculative, no reasonable trustee would have proceeded. The determination underscores that a professional trustee can be accountable for investment losses even where the member was heavily engaged in making the decision... What were the facts? Mr K was a member of the Blick-Horsham Limited Executive Pension Scheme (the Scheme), a small self-administered scheme (SSAS). The Scheme’s trustees were Rowanmoor Trustees Limited (RTL) and Mr K. He proposed investing in storage pods and airport parking via Store First Limited (Store) and Park First Limited (Park). In February 2015, RTL warned Mr K that the proposed investments featured a two-year break clause and advised him to consider how a replacement tenant might be...

In this issue: Transferring property Easements, rights and covenants Property development Property taxes Property insolvency Property in Scotland Key developments and horizon scanning Additional property updates this week Daily and weekly news alerts Trackers Transferring property HM Land Registry updates Practice Guide 1 and forms FR1 and AP1 HM Land Registry has revised Practice Guide 1—First registrations, together with forms AP1—Change the register and FR1—First registration: application. See: LNB News 05/08/2024. Easements, rights and covenants Registration of easements—whether right of way acquired by prescription over private road In Sagier v Kaur, the Upper Tribunal (Lands Chamber) (the UT) allowed the appellant’s appeal from the First-tier Tribunal (FTT), directing the Chief Land Registrar to cancel the appellant’s application to register a private right of way over part of a private road owned by the respondent. The appellant had applied to the Land Registry to enter a right of way over the...

The Executors of KDL Beresford v HMRC [2024] UKFTT 952 (TC) The deceased, B, held shares in F Ltd, which in turn wholly owned N Ltd. N Ltd owned a six‑storey office building situated in London. Two storeys were let on commercial leases, while the remaining four were run as serviced offices, administered for the company by an agent. At any given time, approximately 42 individual offices in total were in occupation, usually by between seven and 20 separate firms. Clients entered into 12‑month office agreements including a break clause and were required to pay two separate fees. The first, the 'facility fee', related to the office space and a set of standard services, such as utilities, cleaning, telephone answering and reception services, together with access to kitchens and sanitary facilities...

FORTHCOMING CHANGE : The Renters’ Rights Act 2025 received Royal Assent on 27 October 2025 For guidance on the Act’s effect on residential tenancies in England, refer to Practice Note: Renters’ Rights Act 2025—key provisions. That Practice Note details which party must issue a break notice and on whom it must be served, along with the acceptable methods of service. It addresses whether service is permitted or required by contract, the statutory frameworks governing service of notices, and the deeming rules under: section 196 of the Law of Property Act 1925 (LPA 1925) section 23 of the Landlord and Tenant Act 1927 (LTA 1927) section 7 of the Interpretation Act 1978 (IA 1978) the common law It further considers how break notices align with statutory security of tenure for assured shorthold tenancies (ASTs) under the Housing Act 1988, and with business tenancies under the Landlord and Tenant Act 1954 (LTA 1954)...

Break clauses A break clause is a provision in a lease that allows the landlord or the tenant to bring the lease to an early end. The Practice Note: Break options in commercial leases in Scotland examines break clauses in depth and covers: who is entitled to exercise the break the timing for exercising the break clause any pre-conditions to using a break clause the implications for sub-leases For sample drafting, see Precedents: Break clause for commercial lease in Scotland—landlord option—style, Break clause for commercial lease in Scotland—tenant option—style, and Break clause for commercial lease in Scotland—mutual option—style. For practical guidance on exercising a break option, see: Break options—exercising break clauses in Scotland—checklist. Break notices Break options are operated by serving a break notice. The break clause often specifies the requirements for the notice, including its form, the date and method of service, and the correct parties to be served. These details may alternatively appear in a general...

This Practice Note offers a step-by-step guide to operating a tenant break option within a lease. It covers the key lease terms to review, the timing for exercising the right, the required format and service of a break notice, and any additional pre-conditions that must be satisfied to bring the lease to an end. It also outlines the actions to take once the notice has been served. For fuller guidance on break notices, see Practice Notes: Break clauses and notices—exercising breaks and conditions precedent and Break clauses and notices—service. The break clause A break clause (or option) permits a tenant or a landlord (or, in some instances, both) to terminate a lease ahead of the contractual expiry date. The clause will typically specify: which party may invoke the break right the date on which the lease can end (the break date) the length of notice that must be given any pre-conditions (in addition to serving a break notice) that have to be...

Notice to terminate lease To: [ name of Landlord ] (Landlord) of [ address ] From: [ name of Tenant ] (Tenant) of [ address ] Re: Lease dated [ date ] entered into between (1) [ the Landlord OR [ name of original landlord ] ] and (2) [ the Tenant OR [ name of original tenant ] ] (the Lease) relating to [ description of property ] (the Property) Pursuant to clause [ number of break clause in the Lease ] of the Lease, [ I OR the Tenant ] hereby serves notice to bring the term granted by the Lease to an end on [ [ date ] OR [ repeat wording of the lease, eg 'the expiry of the fifth year of the Term' ] ] and on that date [ I OR the Tenant ] shall yield up possession of the Property. Dated: [ date ] Signed: ( [ For and on behalf of the...

Definitions warning This Precedent clause makes use of the following defined expressions: ‘Annual Rent’, ‘Insurance Rent’, ‘Property’, ‘Rents’, ‘Service Charge’ and ‘VAT’. All are defined in the Lexis+® UK Precedent leases (see, eg, Precedent: Lease of part (office))...

PARTICULARS Date [ date ] Landlord [ name ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is located at ] [ address ] (Landlord) Tenant [ name ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is located at ] [ address ] (Tenant) [ Guarantor ] [ [ name ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is located at ] [ address ] (Guarantor) ] Property [ description ] [ as more particularly described in Schedule 1, Part 1 ] [ Building OR Centre ] [ description ] [ identified [ edged OR coloured OR hatched ] [ colour ] on [ the [ [ name ] ] Plan OR Plan [ number ] ] ] Term the period set out in clause 2.1 [ to be included only if...

General principles Once a fixed-term assured shorthold tenancy (AST) ends, a periodic tenancy arises by operation of section 5 of the Housing Act 1988 (HA 1988). Under s 5(3)(d) HA 1988, the duration of that periodic tenancy is set by reference to the interval for which rent was last due under the preceding fixed-term tenancy itself as specified by that statute...