A break clause is an option for either the landlord or the tenant (or both) to end the lease before the end of the term, usually on a specified date by giving notice. Break clauses are frequently included in commercial/business leases.
A break clause can significantly affect the investment value of a property. If exercised, the income from the property will stop until the property is re-let. For this reason, when valuing property, it is normal to assume that a tenant’s break will be exercised. As a result, tenants often need to pay a higher rent for the flexibility of a break clause.