Break Clauses - Apportionment Of Rent

Introduction

Break clauses continue to be a source of contention for landlords and tenants alike. Even the most apparently straightforward pre-conditions, such as payment of rent up to the break date, have been a source of litigation.

Conditional break clauses and apportionment of rent

Many break clauses will only allow tenants to break if rent has been paid in full. If the break date is between rent payment dates, then rent paid in advance and in respect of a period after the break date will not be recoverable by the tenant in the absence of an express provision to that effect. Tenants who apportion rent in these situations will invalidate the operation of their break. This has recently been confirmed in PCE Investors Ltd v Cancer Research UK [2012] EWHC 884. The Apportionment Act 1870 will not be of assistance in these circumstances as it only applies where rent is paid in arrears.

The upshot of this is that apportionment of rent in respect of a period after a break will only be possible if the rent is payable in arrears, or if there is an express provision in the lease allowing the landlord to refund the proportion of rent paid beyond the break date.

Conditional break clauses - recent case law

Recent case law has confirmed the importance of satisfying the break conditions in order to avoid invalidating the break itself. In Quirkco...