Break Clause in Tenancy Agreement

by Readers Question

17:00 PM, 17th September 2014
About 4 years ago

Break Clause in Tenancy Agreement

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Break Clause in Tenancy Agreement

I use an agent for one of my properties who has now inserted a “break clause” in the standard 12-month AST. The wording is the same for the Landlord as it is for the tenant. This clause appears to me to effectively make it a 6 month AST. Break Clause in Tenancy Agreement

Is this a standard break clause?

Do they always allow exit at any point after month 6 with 2 months notice?

Landlord’s Break Clause …..

“The Tenant agrees that the Landlord has the right to terminate the Tenancy after the first six month period on 28 March 2015 by giving the tenant no less than two months’ notice in writing to end the agreement. The first opportunity to give notice MUST be before or on 28 January 2015 i.e. two months prior to the initial six month period end date. The landlord can give notice of two months at any time after this initial break clause up until the fixed term ends. Notice must be provided in writing. This does not affect the right of either the Landlord or the Tenant to pursue their legal remedies against the other for any existing breach of any rights under the Agreement.”

Thanks in advance for any advice.

Stephen



Comments

Yvette Newbury

18:06 PM, 17th September 2014
About 4 years ago

It remains a 12 month AST but with a 6 month break clause. That situation is fairly common, BUT the agent should have asked you first if you wanted a break clause in the contract, even if the tenant requested it. It can be advisable to have a break clause so that if you have a difficult non-paying tenant you can then serve Section 21 notice requesting them to leave earlier than the fixed term of 12 months that you would be stuck with otherwise. However you can serve a Section 8 notice earlier than that for non-payment of rent over 2 months plus during the fixed term.

Your agent should be acting under YOUR instructions as to what you want from them.

Romain Garcin

19:50 PM, 17th September 2014
About 4 years ago

There isn't any requirement to have such break clause. In my view break clause are actually best avoided.

If the break clause allows the tenant to end the tenancy at any time after the first 6 months, yes, indeed that effectively makes it a 6 months fixed term in the sense that this is the only guaranteed duration of the tenancy.

Break clauses are often badly drafted, by the way, and that one is not an exception.

Yvette Newbury

20:20 PM, 17th September 2014
About 4 years ago

I don't tend to use break clauses - I prefer to exercise caution before confirming a tenancy may proceed than relying on an early means of ending the tenancy by using the break clause.,

Michael Barnes

10:20 AM, 18th September 2014
About 4 years ago

What is the effect of a break clause on liability for council tax?

If tenant fails to pay council tax for the second six months is he considered not to have a material interest in the property due to the break clause and therefore the landlord can be pursued?

Michael Barnes

10:28 AM, 18th September 2014
About 4 years ago

Reply to the comment left by "Michael Barnes" at "18/09/2014 - 10:20":

Ooops!
I see now that tenant is liable whilst it is his primary residence.
So the question should have been "tenant leaves without appropriate notice or before notice period expires".


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