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.