In Riverside Park Limited v NHS Property Services Limited, the court looked at whether a tenant had validly exercised the break option in its lease when it left internal partitioning at the premises.
The lease gave the tenant a right to break the lease on the break date (24 September 2013) provided that vacant possession was given on or before the break date.
Therefore, if the break had been validly exercised, the lease would come to an end in September 2013. Otherwise, the lease would remain in place until the end of the term in 2018.
Whilst there was no dispute that the break notice had been validly served, the tenant had left internal partitioning in place on the break date. The court had to look at whether or not this rendered the break notice ineffective.
The court firstly considered whether the partitioning was a chattel or a fixture, and determined that the partitioning was a chattel because:
The court then proceeded to look at whether leaving the partitioning in place was a failure to provide vacant possession. Did the presence of the partitioning deprive the landlord of the physical enjoyment of the property? If so, vacant possession would not have been provided.
Unfortunately for the tenant, the court decided that the partitioning meant that vacant possession had not been given. Therefore, the break notice was ineffective and the lease remained in force.
It is very common for tenants to install internal partitioning. In this case, a failure to spend a small amount on removing the partitions has led to the tenant being tied into a costly lease until 2018. Tenants should ensure that they take legal advice on how to effectively exercise a break option.
Contributor: Alexandra Holsgrove Jones
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.