Landlord and Tenant - Essay Example

In the most recent landlord and tenant code, the Code for Leasing Business Premises in England and Wales 2007, break clauses are supposed to be only conditioned on prompt rentals, surrender of occupancy and leave behind no existing subleases whilst other conditionalities referring to the general state of the leased premises should only be dealt with later in the same way they are dealt with in ordinary expiration of normal leases. This is a welcome development in the issue of break clauses because case law is replete of instances when conditionalities have become sources of highly contentious conflicts that posed difficulties in the determination of tenants’ rights to make use of break clauses previously agreed upon between them and their respective landlords.

One very outlandish case where failure to totally comply with conditionality to the last letter resulted in the tenant losing his right to exercise a break clause is the case of Osborne Assets Ltd v Britannia Life Ltd [1997]. In this case, the tenant, Britannia Life Ltd, wanted to exercise its right to a break clause which was written into the contract of lease and where such contract conditioned the option on total compliance with, among others, painting the leased premises with three coats of paint.

Britannia was able to comply but with only two coats of paint prompting the court to declare it in breach of the condition and the forfeiture of its right to exercise the break option. Fortunately, subsequent case law saw courts applying a more judicious and practical method of determining compliance with conditionalities by stressing on the word ‘material.’ Some earlier cases also followed the similar approach of strictly requiring tenants their absolute compliance with conditionalities in break options to the extent that even trivial breaches can cause their forfeiture.

The cases of Trane (UK) Ltd v Provident Mutual Life Assurance [1995] EGCS 21, Bairstow