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Second Notice Served Late Means Lease not Ended

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Posted by Wolferstans Admin on 1st January 2011

A tenant wishing to vacate premises by terminating its lease should read the break clauses in the lease carefully and comply fully with them: failing to do so can prove to be an expensive mistake.

A recent case dealt with a dispute over a notice to terminate a lease. The Royal Bank of Scotland (RBS) was the owner of a property let to another company. The property was managed for RBS by Schroder Property Investment Management Ltd. (SPIM), the property management arm of the Schroder Investment Group.

The lease provided that if the tenant wished to terminate the lease, the landlord had to be given nine months' notice. Under the break clause, notice to terminate the lease had to be given by 3 October 2009. The lease also stated that the notice had to be served on SPIM. The notice to break the lease was duly served on RBS in September 2009, but the notice to SPIM was not served until December 2009.

The High Court held that time was of the essence in the service of both of the notices and SPIM's notice also had to be served by 3 October 2009.

The notice to break the lease was therefore ineffective.

It is essential to comply with break clauses not only in terms of any time limits but also in terms of the method by which the notice is given and to whom. We can assist you to make sure you avoid a continuing liability for a lease you wish to terminate.

Contact Clare Magill on 01752 292354