How to use Break Clauses in preparing Tenancy Agreements

What exactly is a break clause?

A break clause in a Tenancy Agreement allows a landlord and tenant to end the tenancy even before the tenancy period without paying any incurred financial penalties.

However, if there is no break clause in the tenancy agreement, the tenant is responsible for paying the rent for the entire period. He has to pay the rent even if he moves out of the property before the last day of the tenancy period.

How can the Landlords use a break clause?

An important point to note here is that even if the break clause is included in the tenancy agreement, under the Housing Act 1988, the landlord is prohibited from getting possession of his property for at least six months after the deal begins. 

So, a landlord can only use a break clause to evict his tenant if the tenant has been using his property for six or more months. Also, the landlord must serve at least two months’ eviction notice to his tenants, which can be done by issuing the notice during the fourth month of the tenancy.

The landlord is required to issue a Section 21 Notice of Possession to his tenants to enforce the break clause.

How can a Tenant use a break clause?

If the tenant wants to use the break clause, he must serve a notice in writing (but not a Section 21eveiction notice) after six months in the tenancy agreement. The first step is to prepare an adequately complete written document with his signature and then surrender the tenancy to the landlord. Here, a two-month notice is required on the part of the tenant before terminating the fixed-period tenancy.

What can a landlord do if the tenant refuses to vacate the property?

If the tenant refuses to leave the property even after the landlord enforces the break clause under Section 21, the next step a landlord can take is to issue the Court proceedings. Landlord can also request a Judge to order the possession of his property. The Judge will then analyze the break clause to determine its validity.

What if both landlord and tenant want to terminate the tenancy?

If both landlord and tenant want to terminate the tenancy, then the break clause has no role in the process. If both parties agree to end the tenancy, they can easily do this by surrendering it. This can be easily accomplished by a written document signed by both parties.