What is a break clause?
Whether you're a tenant or landlord, circumstances may force you to end a tenancy agreement early. Whether or not you can do so depends on whether you have a break clause in your contract.
So, what is a break clause? A break clause tenancy is one that allows either the tenant or the landlord the right to end the lease early. Whether or not you want or need a break clause, depends entirely on your circumstances and whether you’ll need to negotiate the terms of your tenancy agreement before signing the contract.
Tenants, your letting agent can advise you on any queries they may have about requesting a break clause tenancy. And landlords, you’ll want to speak to your current letting agent about your break clause tenancy queries.
Fixed term vs. periodic tenancy
Notice, and how long you have to serve, depends on the type of contract you have.
Fixed term tenancies require you to pay rent until the end of your fixed term, whereas a periodic tenancy could be described as a rolling contract.
If your contract permits ending a tenancy agreement early, you have a break clause tenancy agreement. These can have further stipulations like your lease cannot be in arrears or you have to have lived in the house or flat for a minimum of three months, but ending a tenancy agreement early is otherwise permitted.
Landlords never want to lose good tenants; we encourage tenants to be open and discuss any potential problems with their landlord as early as possible, before ending a tenancy agreement early.
What is periodic tenancy notice?
A fixed term tenancy will end on a specific date, meaning that notice is already agreed between the tenant and landlord. A periodic tenancy, on the other hand, will continue to run on a month-to-month or weekly basis. The periodic tenancy notice is often determined by when the rent is due.
The default tenancy for most lettings is an assured shorthold tenancy (AST). After an agreed period, the AST won’t renew with new terms and simply lapses into what is known as a rolling tenancy, where periodic tenancy notice now applies.
You can serve periodic tenancy notice at any time and will be expected to pay rent until the end of the period.
Recap: What is a break clause
- If you’ve got a fixed term contract with a break clause you must serve the notice it says.
- If you’ve got a fixed term contract without a break clause you can’t serve notice and can only leave when the term is up.
- If you’ve got a periodic tenancy and live with the landlord, you can agree when you’ll leave with your landlord and are not expected to give a set notice unless otherwise agreed in your tenancy.
- If you’ve got a periodic tenancy and don’t live with your landlord you are expected to serve one calendar month’s notice if you pay your rent monthly and four weeks’ notice if you pay rent weekly.
There can be a number of reasons for moving home and needing a break clause in your tenancy, such as needing to relocate for work, needed a bigger property due to a growing family, or facing financial hardship – all of which are very legitimate reasons for ending a tenancy agreement early.
Remember that the law is there to protect both tenants and landlords alike and that serving notice while you’re still within a contract, or surrendering your tenancy, should never be your first option. Approach your tenant/landlord, explain your situation and see if they can be more accommodating.
If you’re unsure, feel free to contact Douglas Allen or your local Citizen’s Advice Bureau for free, no-obligation advice.