Breaking Shop Lease

[jenny3]

We rent a shop for which we renewed the lease in 2006. There is a 5 year break clause which we now intend to exercise. However, on checking back, we are pretty sure that we didn't actually sign the lease, although have obviously been in the premises ever since. We are supposed to give 6 months notice to exercise the break clause. Does anyone know where we stand legally? i.e can we leave without giving 6 months notice given that we didn't sign the lease?

[R1Geezer]

Legally, by renting the shop and occupying it up to now you have by your actions effectively agreed to the lease even though you have not physically signed it. The document itself is only evidence of a contract, the contract itself is not in material form and thus can only be shown to exist by documentary evidence or weight of action, the latter applies here. You should proceed as if you have signed it and adhere to the contract. This would also be the moral argument.

When you say "can we leave without giving the 6 months notice?", do you mean leave full stop or leave for the originally agreed 5 year break?

[jenny3]

I mean leave full stop, as the lease began in 2006.

[R1Geezer]

well if you treat the lease as if it has been signed then go from there. So are there any get out clauses, ie with some sort of notice for example? if not then you could just walk but no doubt the landlord will pursue and as I said above they may well have a case. If you can sell the remaining lease or even give it away with the new person taking on the rent that should placate the landlord. This is all speculative on my part based on what you have said, it is worth going to a specialist lawyer on this.

[jenny3]

thanks

[johne1892]

All I can suggest Jenny is that you don't leave it too late to send the cancellation notice as we have had experiences of people receiving the notice a week late and they have not accepted the letter as it was 5 months 3 weeks before the end of the current lease etc...

[atalanta]

It is quite common for such properties to have a ten-year lease with the option for the tenant to give notice to leave (break) after five, if s/he wishes. If you do not give the agreed amount of notice, the lease will be assumed to be continuing for the remaining term - that is, the remaining five years to bring it up to the end of the ten-year agreement. If you do not give the notice in time, prepare to be held to the deal for another five years.

[themas]

1. If you have not signed the lease it may well be considered that you are "holding over" - occupying the premises under the terms of the original lease but without any commitment to have to give lengthy notice. If that is the case you could probably leave by giving notice equal to your rent payment interval (e.g. 3 months if you pay quarterly). However, if you accepted & are operating terms which were not in the original lease - the most likely being a different amount of rent - then you would probably be deemed to have accepted the new lease. To get a definitive answer you need to see a solicitor who is experienced in commercial property leases.

2. Even if you try to get out earlier, in case you're not able to make sure you give the 6 months notice at the right time (& make certain it is in writing by recorded delivery & that you keep a copy - you must have evidence it was delivered if there is a dispute).