Landlords will breathe a sigh of relief and tenants a sigh of exasperation following a recent UK Court ruling. The outcome determines what happens to rent paid in advance for a period after a Lease ends at a Tenant’s request under a ‘break clause’ in the Lease.
For many years it was accepted law that, if the Lease ended in the middle of a rental period, any rent paid in advance for the period after the end of the Lease was only recoverable by tenants if the Lease contained a clause clearly setting out the advance rent should be refunded. However, that principle was tested in 2013 and the Courts decided that tenants could, in certain circumstances, claim a refund of advance rent. The story does not end, however, in 2013.
The dispute was referred to the UK’s highest homeland court, the Supreme Court, for a final decision. The Supreme Court takes the position back to what it was before 2013, namely that if there is no clause in the lease tenants will not be entitled to a refund of advance rent.
Tenants should, therefore, take advice when entering into Leases to protect their entitlement to a refund of advance rent.
Brearleys commercial property lawyer, Adrian Tattersley, has a wealth of experience in drafting and negotiating amendments to Leases for all types of commercial property. To ensure your rent position is safeguarded contact Adrian on 01484 714400 or by email at email@example.com