Tenancy Agreement Break Clauses

What are break clauses in Tenancy Agreements?

A break clause is a clause in a tenancy agreement that provides both tenant and landlord the opportunity to terminate the tenancy agreement early during the fixed-term (e.g. the tenant can terminate a 12 month tenancy 6 months into the term). Essentially, either party can “break” the tenancy before the fixed end date, as long as the correct procedures are followed.

However, it’s important to note, the landlord doesn’t have a guaranteed right to possession with a break clause during the first 6 months of the tenancy (i.e. a break clause can only be enforced after 6 months), unless there are grounds for eviction (e.g. rent arrears).

Here is an example of a break clause (please do NOT use it without seeking legal advice):

7.9 Tenancy Break Clause 7.9.1 In the event that the Tenant shall desire to terminate the tenancy hereby created at or at any time after the end of the first six months thereof he shall give the Landlord not less than one months previous notice in writing of such desire and shall up to the time of such determination pay the rent and observe and perform the agreements and obligations on the tenants part. 7.9.2 If the Landlord shall desire to terminate the tenancy hereby created at or at any time after the end of the first six months thereof he shall give the Tenant not less than two months previous notice in writing of such desire then immediately upon the expiration of such notice the tenancy hereby created shall cease and be void.

Serving notice to break the tenancy

The landlord is required to provide at least two months notice to the tenant if they wish to enforce the break clause by serving a Section 21 Notice. So for example, if the tenancy starts on 1st of January, the landlord should serve notice by 1st May (i.e. tenant should have received notice by then), which means the tenant should vacate on July 1st (6 months from when the tenancy began).

If the tenant wants to enforce the break clause, the minimum notice required should be clearly stipulated in the break clause (1 month notice period is normal). Additionally, there might be certain conditions attached to the clause that need to be met. For example, it may stipulate that the tenant must have paid all of the rent due before they’re allowed to use the break clause.

Tenants should serve notice in a written notice, known as a tenancy surrender notice. It’s also worth noting that if the tenant wishes to end the tenancy on or after the fixed end-date, they only need to provide one months’ notice- that is their statutory right.

What if the tenant vacates early?

This isn’t really a problem, and the reality is, landlords can’t physically prevent tenants from vacating early. However, the important thing to remember is that the tenant will remain liable for the rent until the last day of the termination date (based on the break clause end-date).

Why the break clause is used

Break clauses really are about flexibility for both tenant and landlord. They provide landlords/tenants the opportunity to break a tenancy if personal circumstances change. This could include scenarios such as relocating for work related purposes, changes financial circumstances, or even because the relationship between the tenant and landlord turned sour.

The reason I don’t use break clauses

I personally don’t use break clauses in my tenancy agreements, the reason being is that they don’t seem convincingly reliable (from what I’ve read and been told), which makes them kind of scary to me. Let me explain…

Assuming the landlord is relying on the break clause by serving their tenant with a notice- if the tenant refuses to vacate and remains in the property, the landlord will need to issue court proceedings so they can get a order possession from the Judge. The Judge will then look at the break clause to see if it is valid. If the Judge is not happy with the clause the landlord will not get possession.

Why wouldn’t the clause be valid? The break clause is one of those clauses that can be drafted and interpreted in many ways (apparently). If the clause is clearly drafted and equally fair to both parties, the landlord will have a better chance of getting possession. However, if the clause is poorly drafted and deemed unfair (e.g. if it is in the favour of the landlord), it is very unlikely that it will be enforceable.

To be fully enforceable in law, break clauses need careful drafting with a high degree of legal expertise – these agreements should be drafted by a solicitor or barrister, or obtained from a known reliable published source. But ultimately, every clause in a tenancy agreement needs to be deemed as “fair”

My preferred alternative to a break clause

Personally, I’d rather just issue my tenant with a 6 month tenancy agreement (that’s the minimum term allowed). That way, if the tenant or landlord wishes to end the tenancy, they can do without relying on a break clause. But also, and perhaps more crucially, if the tenant refuses to vacate after a valid possession notice (Section 21) is served by the landlord, the Judge should grant possession immediately, no questions ask, because the tenancy’s fixed term would have.

In the event that after the 6 months both parties are happy to continue the tenancy, then the tenancy can either roll onto a Periodic Tenancy or a new tenancy agreement can be issued.

Issuing a 6 month tenancy just seems much safer and reliable because there’s little margin for error in comparison.

Mutually terminating the tenancy early

If at any point during the fixed term both landlord and tenant agree to mutually terminate the tenancy (for whatever reason), whether there’s a break clause or not, the normal procedure is for the tenant to vacate all his/her possessions and hand back the keys.

In the event that the tenant wants to surrender the tenancy without the landlord’s agreement, the tenant will be contractually obliged to pay rent for the entire length of the fixed term. Similarly, if the landlord wants the tenant to vacate early while the tenant has no interest, the landlord cannot reposes the property early without grounds for eviction.

Here’s a blog post which covers many of the legal methods of terminating a tenancy.

Need [free] legal advice on enforcing a break clause or ending a tenancy?

If you think you could benefit from some professional advice on ending a tenancy – whether you’re looking to enforce a break clause, or you’re having problems removing a tenant, you can grab some free landlord legal advice from LegalforLandlords (100% no obligations).

Do you use break clauses?

Do you use a break clause in your tenancy? If so, I’d be interested to see what it says. Would you mind copy/pasting it? Also, has anyone ever enforced the break clause?

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