Recovery of rent by a tenant following the exercise of a lease break clause

Where a tenant exercises a break clause often the break date falls between two rent payment days (e.g. quarter days).  It may be a condition of the break right that the tenant must have paid all rent due under the lease at the break date, and so to be safe the tenant should pay a full quarter’s rent on the quarter day before the break date, even though some of the rent paid will relate to a period after the break date.

After the lease has come to an end, can the tenant recover the overpayment of rent?  In the absence of a clause specifically entitling the tenant to a refund, it had generally been thought that a tenant could not do so.  However, in a recent case the court ruled in favour of the tenant, Marks & Spencer. Following a detailed analysis of the lease, the judge held that the lease was subject to an implied term allowing recovery of the balance. 

The case offers encouragement to tenants who encounter resistance from landlords on this issue, albeit every case will require a careful examination of the terms of the relevant lease. 

Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Limited [2013] EWHC 1279 (Ch)

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