Everything tenants need to know about break clauses

Everything tenants need to know about break clauses

If you’re renting a property, or thinking of doing so, you may have heard the term ‘break clause’ mentioned in relation to UK tenancies.

A break clause is used to offer a tenant a little more flexibility or for a landlord to see if the tenant meets with their expectations.

 

What is a break clause in a tenancy agreement?

A break clause is a tenancy agreement clause that allows either the tenant or landlord, to end the tenancy agreement during the fixed term.

For example, a 12-month tenancy agreement with a six-month break clause would allow either party to end the tenancy in accordance with that clause.

Break clauses can offer both landlords and tenants flexibility to exit a tenancy early, perhaps because of sudden changes of circumstance.

 

Do all tenancy agreements have a break clause?

Break clauses aren’t compulsory in tenancy agreements and, as such, most standard agreements won’t contain a break clause unless requested.

If the landlord or tenant agree a break clause, the terms will be inserted into the tenancy agreement.

 

How does a break clause work in a tenancy agreement?

Once a break clause is agreed between the landlord and the tenant, the terms of the clause should be written into the tenancy agreement.

 

1. What should a break clause state?

When written into a tenancy agreement, the terms of a break clause should state:

 

  • At what stage of the tenancy the tenant or landlord can give notice
  • How much notice either the tenant or landlord will need to give

 

This is a contractual clause and as such must be balanced and fair.

Your rent should be up to date before you can implement the clause otherwise your deposit may be used to repay any arrears.

To formally end a tenancy, you must give up possession of the property. This means all your belongings must be removed, and the keys returned.

Landlords will also usually stipulate that the property is returned in the same condition it was in at the start of the tenancy subject to reasonable wear and tear.

 

2. Who can request a break clause?

Tenants and landlords can request a break clause, and, in most cases, the break clause agreement can be implemented by either party.

 

3. Who writes the break clause in a tenancy agreement

If your landlord uses a letting agent to manage their property or find tenants to rent it, the agent is usually responsible for writing a break clause into the tenancy agreement.

 

4. How is a break clause implemented?

Most break clauses will outline the details of how to they should be implemented in the tenancy agreement.

That usually includes:

 

  • The notice period required to implement the break clause
  • How that notice should be provided (usually in writing)

 

If you wish to give your landlord notice, find out exactly how this should be given and whether an email is acceptable. Electronic communications should be agreed in the tenancy agreement.

Notice periods for break clauses are usually two months.

So, if you started a 12-month tenancy agreement in January and have a six-month break clause, you would need to give your landlord notice in May should you wish to leave at the six-month point in July.

 

How early in the tenancy can you have a break clause?

Break clauses aren’t usually used earlier than six months into a tenancy agreement.

Under the Housing Act 1988, landlords are unable to seek possession of their property using a section 21 notice before four months of the tenancy has expired – unless they have grounds evict – for example, more than two months of rent arrears or antisocial behaviour.

The most common break clause is at six months or 12 months, for a one-year or two-year tenancy agreement, respectively.

 

Can I leave early if I don’t have a break clause?

If there’s no break clause in your agreement, you can’t leave your tenancy early unless your landlord agrees.

If you need to leave your tenancy early, perhaps because of a change of circumstances, speak to your landlord and put your situation to them.

If they agree to an early termination, you will still have to pay rent until new tenants are found, even if you’re no longer living in the property.

You will also be liable for any reasonable costs incurred, including those of an agent where instructed to find a suitable replacement.

Simply vacating the property without permission is known as ‘abandonment’ and is not advised.

While there is nothing to stop you physically moving out of a rental property early, you would still be liable for any rent payable up until the end of the agreed term.

 

Further reading…