Using Break Clauses In Tenancy Agreements
What is a break clause?
A break clause is a term in a Tenancy Agreement that allows a tenant and/or landlord to terminate the tenancy before the tenancy period comes to an end, without incurring any financial penalty.
If there isn’t a break clause in the tenancy agreement (which is quite common) – then the tenant is usually responsible for the rent for the whole period, even if they move out before the end date specified in the tenancy agreement.
How the Landlord should use the break clause
It’s important to note that even if the tenancy agreement does include a break clause, the Housing Act 1988 prevents the court from awarding possession to a landlord until six months have elapsed from the beginning of the agreement. So the break clause can only be used after a tenant has been in the property for 6 months. Also, the tenant must receive at least two full months notice- this can be done during the forth month into the tenancy.
Landlords should serve a Section 21 – Notice of Possession to enforce the break clause.
How the Tenant should use the break clause
If the tenant wants to enforce the break clause, they must also serve a written notice (not a Section 21) after 6 months into the tenancy. A written document with signature, surrendering the tenancy will suffice. The tenant is also required to give two months written notice to the landlord to terminate the fixed term.
What if the tenant doesn’t leave?
If the tenant doesn’t leave the property after enforcing the break clause by serving a Section 21, the landlord will need to issue Court proceedings and ask a Judge to order possession. The Judge will then look at the break clause to see if it is valid.
If both parties want to end the tenancy
If both parties want to end the tenancy at any point, then it doesn’t matter if a break clause exists or not. In order to end a tenancy during a fixed term when both parties agree, they will both need “surrender” the tenancy. This can just be a written document, which both parties agree to by signing.