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No apportionment of rents permitted unless the lease allows it

29 July 2014

In last autumn’s seminar on break clauses Nick Cox reported on the case of Marks & Spencer v BNP Paribas.

This case had suggested that if the lease included a break “premium” then a tenant might not have to pay rent for a full rent period if a break date fell between payment dates.

This decision has now been overturned by the Court of Appeal who have ruled that a tenant is only able to apportion rent, or to recover any overpayment of rent that results from the service of a break notice, if the lease specifically says so.

We advise that when agreeing terms at the outset, the precise date for any break to operate should, wherever possible, coincide with a payment day. However, if that is not the case then tenants should not risk failing to operate a break properly by apportioning rent payments, unless the lease allows them to do so. The obligation to pay rent in full on the payment days will be a condition precedent for almost all break notices to be effective.

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