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Break clause notice became valid once 'accepted' by email

Posted: 31st May 2011   In: Dispute Resolution, Commercial Property

A property management company effectively validated a break clause notice by accepting it as an email – even though the lease required more formal notification.

The case involved a tenant who leased commercial premises for a term of ten years starting on 1st March 2005.

The break clause allowed for termination of the lease after 1st March 2010 providing that the tenant gave six months notice served by hand or by special delivery post.

After five years, the tenant sent the notice by email to the property management company, which replied saying that it accepted the notice and was happy for the tenant to exercise the break clause.

The landlord later disputed that the notice had been properly served. It submitted that the management company’s acceptance of the email notice was merely an acknowledgement of receipt and should not have been taken as an acceptance of notice to exercise the break clause.

The court, however, ruled in favour of the tenant. It held that the acceptance of the email by the management company had to be taken as an acceptance of the break clause notice.

Once the email had been accepted, the tenant was entitled to conclude that nothing more had to be done. It meant the landlord was prevented from challenging the validity of the notice.

Please contact us if you would like more information about the issues raised in this article.