preview

Taking a Look at Property Contractual Law

Decent Essays
Open Document

Q1. Citing case law (English or Irish), discuss three essential elements that should be complied with to ensure that a tenant can properly exercise a break clause in a lease of a commercial property. (50 marks)
A1. A Break clause allows a tenant to terminate his/her lease early, usually subject to certain conditions which allows the tenant to react to the market conditions if they want to upsize, downsize or the property has just become unaffordable. However exercising a break clause can be tricky and very risky because getting it wrong usually means losing the brake clause and then the lease continues which can end up being more expensive than if you just continued the lease. Three essential elements that are complied with to ensure that a tenant can properly exercise a break clause in the lease of a commercial property are:
1. Is to include in the lease periodic break clause options to be exercised by the tenant only e.g. a break in the year five, ten and fifteen of a twenty year lease.
2. In the event that the landlord either, (A) the tenant goes bankrupt or goes into receivership, (B) the bank repossess or (C) a change of ownership that potently could cause conflict i.e. selling the property to a competitor.
3. In the event where the landlord applies to fundamentally change the property or the planning e.g. seeks to carry out major refurbishments that would cause disruption to trade.
Similar actions have arisen from the Irish courts with the case O’Brien vs. BT

Get Access