Many people across the county have felt the pinch of the cost-of-living increase, whether it be the rise in energy bills, food prices or other goods.

The crisis presents a bigger problem for small and independent businesses on the high street. The high street has been a popular location for independent shops and businesses; however, the pressures of the cost of living crisis are now being felt by local businesses who are struggling to get customers through the door as the cost of energy and products rise, people have less money to spend.

Myerson's Property Litigation Team explore local closures and commercial lease terms. 

Cost of Living Crisis do you need to end your lease early

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Local closures

The cost-of-living crisis has been evident in our local town of Altrincham, with owners of an outdoor food and drink hub announcing it is to close. The closure is because the increase in rent and electricity has had a ‘huge impact’ on the business. This announcement comes after restaurant Bistrot Pierre and diner Mustard also announced closures.

If you are a tenant, who is struggling, it is worth checking if you have a break clause in your lease which will allow you to terminate the lease before the expiry of the term. However, to ensure the break is exercised correctly, the notice must be served in compliance with the lease terms. There may also be break conditions that must be complied with.

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When can I exercise the right to break the lease?

A break clause can be exercised in 2 ways:

  1. There may be a fixed date or dates in the lease; or
  2. It could be a rolling break date whereby it could be exercised at any point by providing a notice period.

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How can I exercise the right?

To exercise a break, you must serve a notice to the landlord following the lease terms. It is very important that the correct notice period is given and you comply with the provisions in the lease. These may specify the entity to be served and the address to which the notice should be sent.

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Are there any conditions that I need to comply with?

There will likely be conditions you must comply with to ensure the break is effective.

An example of a condition may include:

  1. Payments of sums under the lease, including rent, service charges and insurance rent, amongst other sums. Unless the lease says to the contrary, all sums due must be paid, even if they relate to a period after the break date. For example, the quarter must be paid in full if the break date falls between two rent payment dates.
  2. To give vacant possession. This is quite a demanding condition; therefore, it is important to seek advice and check the wording of the lease.
  3. A requirement that all covenants under the lease have been complied with. This is also a demanding condition; therefore, it is important to check the wording of the lease carefully.

If the break conditions are not complied with, the break right will not take effect, and the lease will continue for the remainder of the term unless the landlord waives compliance with the break conditions.

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Contact Our Property Litigation Team

Myerson’s Property Litigation team are experts in commercial leases.  We have a wide range of experience in these cases and can help you to understand your options and guide you through the process, so please get in touch.

0161 941 4000