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Tenants of Business Premises - not entitled to refunds

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Is a Tenant of Business Premises entitled to a refund if the break date is between rent payment dates?

In December 2015, the Supreme Court ruled that if a Tenant of Business Premises exercises an option to terminate its lease on an agreed break date then the Tenant is not entitled to a refund of any rent that it had paid in advance in respect of a period after the break date; unless the lease says that the Tenant is entitled to such a refund.

In the case of Marks and Spencer Plc  v BNP Paribas Securities Services Trust Company (Jersey) Ltd and another (2015) Marks and Spencer were the Tenant and their lease did not have a clause giving them a right to a refund of rent paid in advance in respect of a period after the break date.  Thus, Marks and Spencer lost the case!

If you are a tenant of Business Premises and you have agreed to take a lease with a break clause then you should also insist on a refund clause.

For expert legal advice on all aspects of Landlord and Tenant Law please contact our commercial team, Andrew Liddell or Tony Church.

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