Mutual break clause: rolling break

by Practical Law Property

A standard clause that provides drafting for a mutual rolling break in a commercial lease. This clause allows either the landlord or the tenant to terminate the lease at any time during the term, subject to giving a minimum period of notice. This standard clause is drafted for use in England and Wales and it addresses key considerations for both parties, including the potential for an initial period where the break cannot be exercised. This standard clause outlines the process for exercising the break right, including requirements for serving a written break notice and the necessary notice period. It includes critical conditions that may apply to a tenant's right to break, such as the payment of annual rent, the provision of vacant possession, and the property's state of repair and condition. This standard clause addresses the consequences of a successful termination, including the effect of termination on underleases, the survival of remedies for antecedent breaches and an optional provision for the refund of rent paid in advance for the period after the break date. The drafting assumes the lease is excluded from the Landlord and Tenant Act 1954 (LTA 1954) and considers the clause’s relationship with the RICS Code for Leasing Business Premises, England and Wales 2020 (Lease Code 2020).