Court in M&S Case Favours Tenant Taking a Break From Its Lease
In today’s competitive market tenants are increasingly managing to negotiate an upfront contractual right to end their leases early. For many tenants this can mean the right to call time on a failing business without on-going liability under their lease, or for growing businesses, an opportunity to move to larger premises more aligned with their growing business needs.
The decision reached last Thursday in the case of Marks and Spencer PLC v BNP Paribas Securities Services Trust Company (Jersey) Limited is an important one for landlords and tenants alike. It means that a provision may be implied even if this is not included in the wording of the original lease: that the tenant will be entitled to a repayment of overpaid rent and service charges, if this relates to a period beyond the date of break. For M&S in this case, a reported £1.1 million was at stake. This case will have far reaching consequences, particularly for landlords; many of whom have seen this overpayment as a way of compensating them for a lost tenant.
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