Paying Rent at Break Dates : Tenants Beware and Landlords Collect!

Published: 20th October 2008

If a commercial lease is silent on the apportionment of rent and provides for rent to be payable in advance without deduction or set off, then this may mean that a tenant may be liable for rent covering a period after the break date.

If a lease requires the rent to be paid quarterly in advance on the usual quarter days but the break date is, for example, the second day after a quarter day (eg 27 December), the tenant will be liable to pay the landlord for the whole of the December quarters rent despite the fact that the tenant will have vacated the premises on 27 December. This is obviously very bad news for tenants who should request their advisers to negotiate apportionment provisions when agreeing new leases or to change the drafting so that the break date is the last day of a quarter so that no further rent is payable on the break date. Some landlords will be unwilling to accept any change to this provision, as it does allow the landlords some breathing space to find new tenants while the rent is being paid for a further quarter.

If the break notice is conditional on payment of rent and all other sums due and owing under the lease, it is imperative that tenants make payment of all sums due and owing before the break date - otherwise they may not be able to validly break the lease. If the tenant considers there are valid arguments that the rent should be apportioned, it is better to pay the money over to the landlord in any event to validly break the lease, and then to argue about it later after having successfully disposed of the premises.

Implications
Landlords and tenants faced with a break notice should carefully check the terms of the lease to see whether or not rent can be apportioned. If there are no apportionment provisions, the tenant should be required to pay the entire quarters rent even if they ceased to occupy the premises a couple of days after the last rent payment date.