Clean Break Allowances

When acting for Buyers and dealing with the possibility of excess service charges for leasehold properties, you may wish to agree a  reasonable clean break allowance in favour of the Buyer, in lieu of a retention (having taken client’s instructions first, of course).

A suggested clean break allowance clause for insertion into a contract is as follows:

“Upon completion, the Seller shall make an allowance for £[X] from the sale price by way of contribution towards any excess service charge which may fall due and owing by the Seller up to the date of completion. Both the Seller and the Purchaser accepts that this sum represents a clean break sum regarding any service charge shortfall which may or may not arise”.

Til next time


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