Break clauses are one of the most misunderstood elements of a commercial lease. For businesses leasing premises across Cheshire, the North West and England & Wales, a poorly drafted break clause can mean the difference between flexibility and being locked into unsuitable premises for years.
This guide explains how break clauses work, the mistakes we regularly see and what businesses should look out for before committing to a lease.
What is a break clause in a commercial lease?
A break clause allows either the tenant, the landlord or both to terminate a commercial lease early, usually on a specified date or dates.
For tenants, break clauses are often critical where:
The business is growing or restructuring
The property is tied to a specific contract or location
Flexibility is required due to market uncertainty
For landlords, break clauses may support redevelopment or future re-letting strategies.
Why break clauses often fail in practice
From a legal perspective, a break clause is only effective if every condition is satisfied precisely. Courts interpret break conditions strictly.
Common problem areas include:
1. “All rent and sums due” conditions
Tenants may assume this refers only to basic rent. In practice, it can include:
Service charge balancing payments
Insurance rent
Interest or default charges
Any outstanding sum, however small, can invalidate the break.
2. Compliance with lease covenants
Conditions requiring compliance with “all covenants” are particularly risky. Minor breaches such as alterations not formally documented or disrepair unknown to the tenant can defeat the break.
3. Notice periods and service requirements
Break notices must be:
Served within strict timeframes
Sent to the correct party
Served using the correct method
Errors in service are one of the most common reasons break clauses fail.
Break clauses and commercial property in Cheshire
We regularly advise businesses leasing premises in Chester, Crewe, Nantwich, Warrington and across Cheshire West and Cheshire East where break clauses have been agreed at heads of terms stage but never properly stress-tested.
In local markets, leases are often negotiated quickly to secure premises. This increases the risk that:
Break clauses are copied from precedent wording
Commercial intent is not reflected in legal drafting
Tenants overestimate their ability to exit
Early legal review ensures that the break clause works in real-world conditions, not just on paper.
How to make a break clause tenant-effective
From a tenant’s perspective, a workable break clause should:
Limit conditions to payment of basic rent only
Exclude historic or technical breaches
Allow sufficient notice to plan relocation
Align with business and cash-flow planning
For landlords, clarity and certainty are equally important to protect asset value.
When to take advice
Break clauses should be reviewed:
Before agreeing heads of terms
Before lease completion
At least 12 months before the break date
Early advice avoids last-minute disputes and preserves negotiating leverage.
Commercial property advice for Cheshire businesses
At NJB Legal, we advise landlords and tenants across Cheshire and the wider North West on commercial leases, break clauses and exit strategy, providing clear, practical advice focused on commercial outcomes.