Many people skim read the terms and conditions in a rental agreement simply because they haven’t got the time to read all the small print. But missing vital information could be tying them into a long, unnecessary lease.
Many tenants agree a break clause with their landlord, which allows the tenant to end the agreement before the lease has expired. But some terms and conditions in the agreement can jeopardise that privilege if they are not fully understood.
Amy Cusworth, who works at Oxley & Coward Solicitors, is all too familiar with tenants missing out on a break clause. One particular example was when a tenant was not granted a break clause in a lease which cost £67,500 per year. This was due to them owing £130 in interest payments to their landlord, even though he had not asked for it; the interest payment was stated in the conditions of their tenancy agreement.
Speaking of commercial property break clauses, Amy said: “The ruling in this case should really come as no surprise in the current economic conditions. The right to end a lease early remains a privilege, so any conditions must be satisfied to the letter.
“When negotiating terms with a landlord, it’s vital for a tenant to be sure that they are going to be able to comply with all the conditions.
“All too often we see a lease where the landlord goes for a general catch-all clause that is almost impossible to meet, as compliance could fall down over something as trivial as a piece of sticky tape left on a wall.”
To avoid missing out on a break clause, tenants should check and double check their tenancy agreement before they sign, as Amy suggests: “The best thing is for a tenant to take a good look at their lease, check their payment history and if possible rectify anything so they are fully up to date before they give notice.”
If possible, get a second pair of eyes to read through the agreement as well, just in case something was missed. After all it is the landlord’s aim to keep hold of paying tenants, rather than having an empty commercial property on their hands.
“What most tenants don’t realise is that it is their responsibility to make sure they have strictly complied with all the conditions. They cannot assume all is well just because the landlord has said.
“In a climate where landlords want to hold on to tenants, planning for break clauses needs careful thought – even before the lease is entered into,” Amy added.
For more information on what to expect being a tenant of a commercial property, check out our tenant guide.
