Tip of the Week: Rights mean responsibility
You may be familiar with the expression 'Derogation from Grant'. The underlying principle is that what is given by one hand cannot be taken away by the other…
Published 1 March 2016
If a lease term expires on a day that is not the end of a quarter (or other agreed rental period) it is well established (in practice, if not in law) that a tenant only need pay rent up to the end of the term. Landlords invariably recognise this and the last rent demand will usually be for an apportioned sum only up to the last day of the term. To demand rent beyond the end of the term could have the effect of extending the term.
Where a lease comes to an end on the service of a break notice, it was also the practice of landlords only to demand rent up to the break date. The matter was complicated when payment of rent became a typical condition for a tenant break being effective. Tenants were (quite properly) advised that, until it was established that the break would be effective, the rent to be paid on the last rent payment day should be for the full rent period (usually a quarter) and should not be apportioned, otherwise the condition of paying the rent might not be satisfied.
Questions then arose as to whether, if the tenant's break is effective, the tenant should be entitled to a refund of the proportion of rent referable to the period after the break date. The Supreme Court has now confirmed that there is no such implied term and where rent is payable in advance, a tenant must pay a full period's rent before a break date in order to comply with a condition requiring payment of all rent due prior to the break date; and there is no right at common law to a refund if the break is effective, an express provision would have to be included in the lease for the tenant to have a refund.
Now that this has been established beyond doubt, when a tenant seeks to negotiate a surrender, remember that the tenant has no right to a refund of rent paid in advance beyond the surrender date.