It is a basic rule that any contractual or statutory requirement for the service of notices, must be strictly complied with. This is particularly important for a tenant wishing to exercise a break notice. In fact, it has been stated in case law that “if the [notice] clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease.” Failure to effectively exercise a break can have a disastrous impact upon a tenant, with continuing liabilities to pay the rent, service charge and other outgoings on a property which the tenant no longer wishes to occupy. The effects are worse still if the tenant has moved into alternative premises.
In a deviation from the basic rule, in the recent case of Siemens Hearing Instruments Ltd v Friends Life Ltd  Ch D (N Strauss QC), the High Court surprisingly found that a notice was effective to trigger a break clause in the lease, despite the fact that it did not include specific wording prescribed in the lease. This decision may be of some assistance to tenants who have served a “defective” notice, where certain requirements have not been met.
However, the judgment in this case made it clear that this precedent will only apply in limited circumstances. For example, if the break clause in the lease explicitly states that a non-compliant notice is ineffective, then it is clear that the requirements must be strictly adhered to. However, words such as “must” and “shall” are not decisive in the interpretation of the clause and it is really the substance of the clause that is important. Where the break clause forms part of a professionally-drafted lease and is silent on the point of non-compliance, the court held that it can be reasonably assumed that this is deliberate, meaning that non-compliance will not automatically invalidate any notice served. The courts will look to objective criteria to determine this, such as the background and purpose of the provision and the effect of non-compliance. If the information omitted from the break notice was not essential to the other party and has not prejudiced them in anyway, it is unlikely to invalidate the notice served.
What does this mean for landlords and tenants? Well, for tenants it is reassuring that the validity of a notice may be upheld despite containing an error or omitting some information, but there is clearly doubt on this point as this case is hard to distinguish from giving notice on pink paper. Given the importance of successfully exercising a break, it is unwise to just rely on this court decision to protect you. As always, it is better to be safe than sorry, so a careful consideration of all the terms of the break clause and notice requirements in the lease is still needed to ensure that any notice served is compliant. Notices, therefore, should be professionally served.
For landlords, the message is to not automatically assume that a notice you receive is valid, but to bear in mind that a minor procedural defect might not invalidate a notice. It is wise to have any break notice received professionally checked, as early confirmation of a valid notice means that the landlord can avoid any delay in marketing the property.
If you would like any further information or advice on this please contact Mark Lavers on 020 7209 2013 or email@example.com
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