Lease lengths have changed massively over the last 10 years with the average going from around 20-25 years down to around 3-5 years. Whilst some more established tenants are happy to commit to a longer term we are finding start up and smaller businesses looking for increased flexibility, but there are ways of taking a longer lease whilst still retaining that all important flexibility. And it is worth noting that landlords will generally be able to offer tenants willing to commit to a longer term a better deal than those only able to commit for a short term.
Break Clauses
A break clause is often inserted mid-way through a lease to give the tenant (and/or landlord) the option to end the lease. The tenant will usually have to serve prior written notice to the landlord often with 6 months’ notice, there are invariably conditions attached to the break clause such as all rent and service charge payments being up to date and the property being handed back with vacant possession, the break will be deemed as invalid if the conditions are not met. The lease will detail any conditions attached to the break clause and how much notice should be given.
Many landlords will prefer a tenant to take a longer lease with break options instead of lots of shorter leases, for the pure fact it saves the hassle and costs of agreeing and drawing up a new lease each time. For example, rather than a 2 year lease the landlord might offer the tenant a 6 year lease with break options at years 2 and 4.
