How common are break clauses in Assured Shorthold Tenancies

Alan_In_London

Hi.

I am currently looking to move to a new rented house, and found one a couple of days ago. All was going well until it turned out that the landlord wasn't happy to have a six month break clause in the twelve month tenancy.

I was a bit surprised by this, because I have rented several places on ASTs and they have always had a break clause, so I assumed that they were fairly standard.

I'm not going to be able to proceed because, even though I will very likely be there for over a year, I am going to eventually look to buy somewhere, and having only point every year that I can vacate (without losing money), will make it very difficult.

It seems that the Letting Agent's agreement does not have a break clause by default, although they were happy to approach the landlord and request one on my behalf - however I know several people in the same area who are renting, through other agents, and all have six month clauses.

So, I just wondered how common it was not to have such a clause.

Would be very interested to hear an input. Thanks.

Owain_Moneysaver

If you want the security of tenure for a 12 months minimum term, then the landlord is entitled to expect you to remain a tenant for 12 months.

If you want a break at 6 months then sign a 6 month minimum term, but you then run the risk that the landlord will seek possession after the 6 months.

tbs624

Break clauses are often more trouble than they are worth , with many of them being worded in an ambiguous fashion.

IMO they are pretty pointless - you either go for an initial 6 months or 12 months straight.

Many LLs prefer an initial 6 months until they get to know that the T is reliable and LA s encourage it because they like to slap both LL & T for a "renewals fee" if they continue for a further 6 month FT.

That said , you have to negotiate with the LA/LL to reach an agreement that works for you and for them.

G_M

If you do not want to commit yourself for 12 months, do NOT sign a 12 month contract without a break clause.

Break clauses appear in a minority of ASTs. As tbs624 says, if you & the LL want flexibility and the option to get out after 6 months, then go for a 6 month contract. Thereafter you can always sign another (though as said agents often charge for this!) or switch to a 'periodic' (month by month) tenancy.

The decision in the end is not the agent's, it is for you and the LL to agree.

Alan_In_London

As somebody who has rented various properties via ASTs (alway with 6 month break clauses) and who knows several people who are currently renting via ASTs (all with 6 month break clauses) - I am a bit surprised to hear that such clauses are in a minority of contracts. That is not to suggest that I don't believe it, just that I am a bit surprised.

To me such a clause is vital, because the rarity of appropriate accommodation to rent or buy, means that it would be very difficult to time a move to another property and not incur significant period of double payment (of rent, or rent and mortgage).

It is not that I would want to move after six months, or even after a year. It is that with no break clause, the only time that you can leave and not incur double expenditure is once a year, on the anniversary of the agreement. With a break clause, you can give two months notice at any time after the first four months, given a significant window in which you can move and not incur the double expense for an extended period (there will almost always be some overlap of course).

Timing a suitable property for the once a year window, would be very difficult.

Having a six month contract rather than an annual contract would be better, but would still only give two chances a year.

Of course, the landlord ends up having to find a new tenant too, but perhaps that is slightly less difficult than the tenant finding new accommodation (the landlord really just wanting a tenant who pays the rent and respects the property and generally "behaves", the tenant needing a place near to a certain school and/or station, and perhaps with various other requirements).

I certainly won't be signing a twelve month agreement. The only saving grace is that I know, through the other renters that I know in the area, that there are many LAs that do have a 6 month break as standard.

I think the fact that this LA defaults to a 12 month contract, means that the LL (who is a first time landlord) probably thinks that I am asking for something quite strange.

It would probably be fine, if it went periodic after the 12 months (which is what all of my previous tenancies have), but it doesn't seem that would be the case here.

G_M

The majority of ASTs in my experience are 6 month contracts. So yes, 2 opportunities each year for each side to terminate.

12 month contracts are common, but not AS common as 6 months. Some 12 month contracts (perhaps most) have a 6 month break clause, meaning, once again, 2 opportunities each year for each side to terminate (though depends on wording as sometimes the break clause only applies to one party!).

I guess a 12 month contract with break clause give the illusion of longer term commitment whilst in reality only commiting to 6 months. As suggested above, a 12 month contract with break clause also gets round the agent trying to charge an exhorbitant renewal fee every 6 months.

madeupname1

As a landlord, I took the 6 month break clauses out of my 12 month asts. In my view they simply are not worth the hassle. It takes a lot of time and work to get a property ready for the occupation of a tenant and to do it every 6 months isn't really cost effective from my point of view.

Alan_In_London

G_M wrote: »

12 month contracts are common, but not AS common as 6 months. Some 12 month contracts (perhaps most) have a 6 month break clause, meaning, once again, 2 opportunities each year for each side to terminate (though depends on wording as sometimes the break clause only applies to one party!).

Interesting. All the break clauses that I have ever been involved with have given either party the right to give two months notice, at any point from 4 months onwards (so the earliest end of the contract would be 6 months). The only other stipulation being that the tenancy had to end the day before the next rental payment was due.

So that is why, with the contracts I have had before, I had basically half the year in which I could vacate.

As a tenant I would never be happy with only having one chance a year to vacate. As I say, luckily for me, it seems that in this area 6 month breaks (by which I mean any time after 6 months) seem common. I wonder if their is a lot of variation region to region (all of my tenancies have been in Central or North London).

G_M

All the break clauses that I have ever been involved with have given either party the right to give two months notice, at any point from 4 months onwards (so the earliest end of the contract would be 6 months).

You are basically describing a 6 month AST which on expiry becomes a periodic tenancy!

Why bother?

Svenena

Well the difference is that if the tenant wants to leave after six months on such a contract, they have to give two months notice instead of the one required of a statutory periodic. Would be better for the tenant to just have a standard six-month AST, surely?

theartfullodger

Break clauses are notoriously difficult to get right &, for example, must be equal to both sides or will be unenforceable under unfair contract stuff (i.e. if LL can give notice at 6 months T must be able to also).

If you don't want to do business on Landlords terms you don't have to. If landlord doesn't want to do business on tenant's terms he doesn't have to... but we all knew that didn't we...