Q. I am the tenant of commercial premises under a
ten year lease, and I have served an option to break terminating
the lease in six months' time. This option to break is subject
to a condition to give vacant possession of the premises and to
have complied with all repairing covenants in the lease. I have
carried out works to the premises during the term under a licence
for alterations, which include large amounts of partitioning,
window blinds, an alarm and kitchen units. I am anxious for
the break to be effective. What kind of issues do I need to
A. The break clause will only be effective if all of the
conditions attaching to it have been satisfied. The condition
to provide vacant possession won't be complied with where there
is any impediment that substantially prevents or interferes with
the right of possession of a substantial part of the
In order to decide whether or not the alterations outlined above
need to be removed to exercise the break, the first question to
address is whether or not they are chattels. Chattels are
items that are not fixtures and a tenant is generally obliged to
remove its chattels at the end of the term. By contrast if an
item is a fixture the tenant does not need to have removed it to
provide vacant possession to the landlord. Whether a chattel
has become a fixture is determined by the extent to which it is
annexed or attached to the land and the purpose for which it was
brought onto and annexed to the land. The item will not be a
chattel if physical removal is unable to take place without causing
substantial damage to the land and if use of the item as a chattel
will be lost as a result of the removal.
In a recent case which involved demountable partitioning, the
court ruled that the partitioning was a chattel and therefore
needed to be removed for a break conditional on vacant possession
to be validly exercised. This was on the basis that it could
be removed without damage to the partitioning itself or the
property as the partitioning was not fixed to the structure.
The court decided the partitioning was for the benefit of the
tenant, rather than providing a lasting improvement to the
property. Therefore, if the partitioning is demountable, the
safe approach will be to ensure that it is removed before the break
date. This also applies to the other alterations that have
been made to the property.
In respect of the second condition to comply with all repairing
covenants in the lease, unless this covenant is qualified in some
way, the safe approach will be to instruct a surveyor to prepare an
exhaustive report of what repairs are necessary and carry them out
before the break date. This will include very minor items of
repair and damage, and it is to avoid any potential arguments that
the landlord may raise to prevent the tenant exercising the
break. If the condition to comply with all repairing
covenants is not qualified as being in relation to substantial or
material breaches, any breaches, no matter how trivial (for example
wood rot in window sills or a property being left uninsured for
only a few days), can potentially invalidate a
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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