Take Notice! How to Serve Lease Notices

Many agreements and deeds in the property sector include provisions requiring or allowing one party to serve notice on the other party, or a third party, if certain events occur. For example, a tenant, landlord, or both, may have the right to terminate the lease early on a specified date by serving a break notice on the other party; completion of a sale of property may be triggered by the seller serving notice on the buyer. Consequently, most documents contain what is known as a ‘notice clause’, which sets out the parties’ agreement on how such notices are to be served in order to be effective. If a document does not contain a notice clause, there are various statutory provisions governing notices which may apply. Whether there is a notice clause or alternatively if statutory provisions apply, it is essential that the applicable requirements are carefully reviewed and adhered to, to ensure that the notice is valid and will take effect as intended.

A notice clause may specify that a notice must be served in a particular way - by hand delivery, fax, document exchange, e-mail and/or by post, and even what postal service must be used e.g. first class pre-paid post or recorded delivery.

Another common requirement is that the notice must be in writing and signed by the party giving the notice or by someone else, such as a solicitor, on their behalf. What ‘in writing’ means – whether it permits a notice to be ‘written’ electronically via email - will depend on a careful review of the other terms of the relevant agreement/deed. A notice clause will also usually stipulate where the notice must be sent – to which address and for the attention of whom.

It is wise for the person giving the notice to keep evidence of how the notice was purported to be given, such as proof of posting. Some notice provisions will incorporate an assumption of when a notice is deemed to have been received if it is sent by a particular method; in which case the sender is not required to prove that the notice was actually received by the intended recipient. The sender may not be able to rely on such deemed service provisions if it is clear that a notice was not actually received e.g. if the notice was returned to sender marked as undelivered. If the agreement/deed does not include deemed service provisions, the sender will need to prove the notice has actually been received by the intended recipient. In such cases it is important that the sender obtains evidence of receipt of the notice.

The timing of serving a notice is also often vital. For example, many notices will need to be served a specified time before a certain date. It is crucial that any specified timeframes are adhered to, otherwise there is a risk the notice will not have the desired effect, even if it has been sent/delivered in accordance with the applicable requirements.

In some scenarios, there may be further conditions attached to whether a notice served will be effective. For example, break clauses in commercial leases often stipulate that if it is the tenant wishing to terminate the lease, a break notice will be ineffective (even if validly served on the landlord) if there are any sums outstanding under the lease, if the tenant has not left and emptied the property of its belongings and/or if the tenant has not paid a premium payment. If such attached conditions are not complied with and/or the break notice is not served in accordance with the applicable requirements then the tenant’s attempt to break the lease could be ineffective and they face being tied in to a lease and the obligation to pay rent for longer than they anticipated.

When serving a notice, it is vital that the applicable requirements, whether contained in a notice clause or in statute, are carefully reviewed and strictly followed to ensure that the notice is valid and will have the intended effect. As mentioned above, an ineffective notice can have significant consequences. For this reason, we recommend that legal advice is taken before attempting to serve a notice. If would like further advice, please contact us.

Author: Bethan Blackburn

2 April 2021