Break options

General

A lease for a term of years may contain an option for the parties, or one of them, to determine the lease before the expiration of the term. This is known as a break option or a break clause. The break may be exercisable:

1. •

   at any time after a fixed date (a 'rolling break')

2. •

   on one or more fixed dates, or

3. •

   on the happening of stated events

In practice, most leases expressly state whether the break is exercisable by the landlord or the tenant, or if the right is mutual to both parties. In the case of a tenant, unless there is any indication to the contrary, the break option is exercisable by the person in whom the term is for the time being legally vested. However, if it is expressed to be personal to the original tenant it will normally lapse on the first assignment as a matter of construction of the lease.

Unlike options to purchase the reversion, or to renew, an option to break does not need to be registered in order to bind assignees of the lease or reversion.

Options