Section 21 in renewed tenancy: break clause timing concerns?

Section 21 in renewed tenancy: break clause timing concerns?

0:01 AM, 2nd July 2024, About 3 weeks ago 13

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Hi, we have an AST commencing 22-March-24 finishing on 21-March-25 (and monthly periodic thereafter) with a 6-month break clause (which should start from 22-September-24).

This is not the original AST with our tenants as they started renting our property from February 2020 and we still have copies of those previous ASTs.

The Break Clause on the current AST states: “This tenancy agreement may be terminated by either party giving at least 2 months’ notice in writing on of before the rent due date, to expire at any time after 6 months from the start of this agreement.”

We have come across a seemingly helpful article from Shelter >> https://england.shelter.org.uk/professional_resources/news_and_updates/section_21_getting_the_dates_right

Under title “When a section 21 notice is given too early” it states the following: “Landlords cannot rely on Section 21 notices where they give the notice too early.

A notice cannot be given within the first four months from the date the tenancy began. This applies only to the original tenancy. It does not apply to a tenancy renewed at the end of the original term or to a statutory periodic tenancy.

This limitation makes little sense, since a landlord who renews a tenancy for a further fixed term is permitted to give the section 21 notice as soon as that tenancy starts. Yet, unless there is a break clause, the earliest the notice can take effect is at the end of the fixed term.”

As we are worried about the impending demise of Section 21, we have a couple of questions:
1) What is the relevant legislation that applies to Shelter’s quote regarding minimum 4-months’ notice applying only to the original tenancy? Does it explain what happens with Renewed Tenancies?

2) Our managing agents are saying that the break clause cannot be invoked (i.e. notice cannot be given) until 6 months of the AST has gone, whereas our position is that we can give at least 2-months’ notice before the 6 months is up i.e. notice given on or before 22-July-24 for a date of 22-September-24. We have checked with 2 other agents in our area. One agrees with us, the other agrees with our agent!

We know, in past posts on this forum, that people have said that notice can be given after 4-months with a break clause, but can it be given after 3-months on a renewed tenancy? We know that a Section 21 only lasts for 6 months. Since there seems to be confusion within managing agents, we need some clarity/details of the legislation, if possible, so that we can present this to the agents to force the issue.

Sorry for the short notice, but any help/advice that you can give us would be greatly appreciated.

Regards,

Neil


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Neil Liberty

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11:32 AM, 2nd July 2024, About 3 weeks ago

Thank you P118 for changing the title of my post – Your version makes much more sense!

Yesterday when I submitted the post, the managing agents’ position was still that they could not give notice on the Break Clause until 6 months had elapsed in the current AST.

In the afternoon, that position changed to allowing the notice to be given not earlier than the rent payment date (on a business day) 2 months before the Break Clause date. In our case, the 22-Jul-24 is a Monday and exactly 2 months before the Break Clause date of 22-Sep-24.

Obviously, their initial position was wrong, but their updated position is still wrong.

Why? Because I have done some more research on the subject and now have definitive proof that you can give notice earlier than 4 months on a Renewed Tenancy (or AST) with a Break Clause, as long as the possession date on the Section 21 (Form 6A) is at least 6 months after the start of the current AST.

This sounds great but please be realistic – If you Serve a Section21 too early, it is possible that a court may reject the Section 21 as it only exists for 6 months.

I came across the following informative article by Clare Anslow of Gatehouse Chambers, dated 16 Jul 2018, where she explains about Section 21 – Notices and Possession Procedure. https://gatehouselaw.co.uk/section-21-notices-and-the-possession-procedure
In this article, towards the end, under “Anything else?” it states:
“Finally, remember that:
• A landlord cannot use s21 notice to end an AST before the expiry of the fixed term unless there is a break clause;
• Any possession order may not take effect earlier than six months after the beginning of the (original) tenancy;
• A s21 notice may not be given within the period of four months beginning with the day on which the (original) tenancy began.”

Much like Shelter, the (Original) Tenancy phrase is mentioned. However, these are just articles and not the law.

The legislation is the Housing Act 1988, Section 21: https://www.legislation.gov.uk/ukpga/1988/50/section/21

In our case, I believe the Section 21(4) is applicable, so 21(4B) states:
“(4B) A notice under subsection (1) or (4) may not be given in relation to an assured shorthold tenancy of a dwelling-house in England—
(a) in the case of a tenancy which is not a replacement tenancy, within the period of four months beginning with the day on which the tenancy began, and
(b) in the case of a replacement tenancy, within the period of four months beginning with the day on which the original tenancy began.”

This is repeated in 21(5).

In 21(6) it defines what is an Original Tenancy and in 21(7) it defines what is a Replacement Tenancy.

Each case should be decided on its own merit. However, in our case, as our Tenants have been in the same property since February 2020, 21(4B)(b) applies as we are on our 4th Replacement Tenancy and 4 months after the Original Tenancy is June 2020, not July 2024 as our agents are implying.

Whilst I’m sorry for possibly giving someone else the runaround, I think this article is still useful to all landlords before Section 21 is abolished.

Regards
Neil

Helen

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12:54 PM, 2nd July 2024, About 3 weeks ago

To make it simpler, this is how I understand it. A normal AST will have a break clause at 6 months so you can give notice of two months at 6 months. This would include a S21 which also gives 2 months notice.
I have been informed by the excellent eviction agency I always use (Legal for Landlords) that you can't serve a S21 within 2 months of a renewal contract. I hope this simplifies and clarifies things.

DPT

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10:57 AM, 3rd July 2024, About 2 weeks ago

It would have been a lot easier if you'd just allowed the tenancy to go periodic after the initial fixed term. The only person to benefit from a tenancy renewal is the agent.

Does your break clause state that a s21 notice can be used as a break notice? If not then you'd have to serve both. A s21 notice can be longer than 2 months, so you can serve one at any time, but they only have a shelf-life of 6 months. You also need to allow extra days for postage and weekends. You could serve a valid s21/break notice now to expire 22 September.

Neil Liberty

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8:17 AM, 7th July 2024, About 2 weeks ago

Thank you Helen and DPT for your input.

We were advised by a solicitor (on a 30-minute free basis) that as the latest AST is a replacement tenancy then we can serve earlier than 4months. He suggested that we make the expiry date the 23-Sep as some judges can get a bit funny about when 6months ends. So the S21 was served by myself, both by email (it's a clause in the AST) and through the door (recorded on video) on 4-July before 1630.

The agent stated that we needed to have additional documentation served with the S21 notice those being the Tenancy Deposit docs, How to Rent, the latest AST, the EPC, the latest Gas Safety and EICR. I did follow these instructions but thought it odd as the EPC, EICR and Tenancy Deposit info would all have been served originally.

I checked with the solicitor who said that whilst it wasn't necessary it wouldn't matter either. So I reckon the agent is a bit belt and braces!

Helen - if you want to serve the S21notice at 6months you can but you can also serve at 4 months or less depending upon whether it's the original tenancy or a replacement. I like legal for landlords minimum of 2 months!

DPT - We went with a Managed Agency service to not have the hassle. Alas, even if we kept onto periodic after our last AST, the Agency charges the same fee for a S13 notice. Whilst the break clause does not specifically mention the S21 we have been advised that it's one and the same.

Thanks very much

Neil

Alison Clark

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12:55 PM, 7th July 2024, About 2 weeks ago

Reply to the comment left by Neil Liberty at 07/07/2024 - 08:17
Hi Neil. I’m pleased this platform has been helpful for you. Was your (30 min free solicitor advice) by telephone? I’m struggling to find any free telephone consultations at the moment.

With regards agent fees. If a tenant wishes to leave early from a fixed term and I agree the release plus wish to leave the agent. Would it be normal procedure for the agent to charge me an exit fee. There is nothing clear in the T&C.

Thank you

Alison

Neil Liberty

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13:48 PM, 7th July 2024, About 2 weeks ago

Our solicitor meeting was face to face which was very helpful as it allowed me to provide evidence to prove my point.

With regard to leaving an AST early, my understanding is that it isn't a unilateral decision just by yourself but also requires th landlord's permission too. If permission is not given then you still need to pay rent until either the AST finishes or, if there is a break clause, after the notice for the break clause. If permission is given, then the agent is allowed to charge re-let fees, so that the landlord is not out of pocket. Take a look at the Tenant Fees Act 2019: https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance

Neil Liberty

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13:55 PM, 7th July 2024, About 2 weeks ago

Sorry but thought you were the tenant rather than the landlord. It could be that the agreement you have with the agent has a minimum period, so take a close look at your T&Cs. Also ask the agent where these exit fees are stated in the contract. It's either that or they are not happy as they will lose their commission!

DPT

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14:15 PM, 7th July 2024, About 2 weeks ago

Reply to the comment left by Neil Liberty at 07/07/2024 - 08:17
A key benefit of allowing the tenancy to go periodic is that you can serve 2 months notice at any time if circumstances change.

Alison Clark

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16:26 PM, 7th July 2024, About 2 weeks ago

Reply to the comment left by Neil Liberty at 07/07/2024 - 13:55
Yes sorry I am the LL. The exit fee states one months rent plus VAT so nearly 1k to exit. I will read the contract again - I can’t find anything if the tenant wishes to leave early and I agree, but I do not wish to re-let with the agent, I am still liable for their exit fee?

Thank you

Neil Liberty

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22:05 PM, 7th July 2024, About 2 weeks ago

Totally agree with that DPT. Whilst i would have done that, I'm a joint landlord!

Alison - you really need to see a solicitor to check for unfair contract terms. However, this may cost you more than paying off the agent! Next time check the contract for onerous terms before signing and remove them.

In our case we have to give 2 months notice after a minimum period whereas our agent only requires 1 month notice.

After what's happened, the relationship with our agent will be changing.

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