Break Clause used, incur Deed of Surrender Charges??

cimla

Hi there,

I have an AST of 12 months.

Break clause is included. I can give 2 months notice from the 4th month and leave at the 6 month.

In the agreement its stipulates the break clause of 2 months notice required from the 4th month.

Then further into the agreement it says:


Should either party need to break this agreement, and the second party agrees, a legal document "deed of surrender" will be required.


Then the final page is the Deed of Surrender including charges for using deed of surrender.

I'm currently 3 months into my agreement but would like to relocate for a new job. So i contacted the guy in charge of answering any tenancy issues, who runs the apartments on behalf of the agency and asked him to confirm the process of using the break clause.

He said I can give 2 months written notice from the 4th month AND pay the charges in the deed of surrender.

Is utilising a break clause seen as "breaking the agreement", so therefore i have to pay deed of surrender charges if i use the break clause?

It just sounds rediculous that i may have to pay upwards of £600 to utilise a service (break clause) which was offered as part of the agreement.

Any help much appreciated.

Ben

G_M

No. I do not believe acivating a break clause constitutes 'breaking the agreement'. Part of the agreement is that you (and the LL?) can give notice at 4 months to end the tenancy at 6 months.

Furthermore, the Deed of Surrender is only required where the other party's consent is required to a request to break the agreement.

The Break clause is a right therefore consent is not required, therefore the Deed is not required.

However it would be helpful if you quoted the entire Break Clause in full, as well as the precise wording relating to the Deed.

cimla

Hi G_M,

Thanks for your reply.

Regarding the break clause it states:

"Special conditions:Both the tenant and the landlord can give two months notice from the 4th month."

That is the only reference to a "break clause".

Under a heading "charges and extra fees" is the final paragraph before i signed:

"should either party need to break this agreement, and the second party agrees, a legal document "deed of surrender" will be required. Please see page 6 of this agreement for details of charges for using this service".

Page 6 is the deed of surrender with the heading "Charges for the deed of surrender"

Then the following:

Liable to Landlord or Tenant (depending upon who initiates the termination)

100 pounds plus VAT to compile, administer and execute this document.
NB (this is in addition to the charges set out below)

Tenant Costs

It is hereby understood that should the tenant initiate the terminationof the tenancy by way of deed of surrender, they are liable to cover the landlords costs of letting the property for the remaining term of the tenancy.

This will be calculated on the basis of:

7% plus VAT of the monthly rent for the remaining term of the Agreement.

That is pretty much it for the break clause and deed of surrender.

What do you think, not sure what to do as we wish to leave but dont want to pay unnecessary charges.

Ben

jjlandlord

[deleted following G_M's post as I had read too quickly]

The issue is that the clause does not say what the effect of that notice might be...

RAS

You will have to pay the unnecessary charges as they are in the contract you signed. You might persuade a court they were unfair but that would be the only get out.

G_M

I disagree.

I believe the special condition is a break clause. It is clear that either side can give notice to end the agreement, and no consent by the other is required.

The section headed 'charges and extra fees' is unrelated to the special condition, and would apply if, for example, one party wished to end the tenancy earlier than the 6th month, or with only one months notice, and the 2nd party agreed.

cimla

JJLanlord - yes, no other ref to break clause, however the landlord has sent me an email confirming there is a break clause and i can leave on the 6 month but have to pay the deed of surrender charges.

RAS - I would be happy to pay the charges if i requested to leave now (3rd month) but surely the break clause is a service offered to me and i'm choosing to use it. Certainly not breaking agreement as i havent broke anything as they have offered me the break clause/special condition.

G_M thats what i was thinking. Do you think this is one worth taking to a solicitor?

Thank you all for your responses.

G_M

Why not get a few more responses/opinions and/or try CAB or a law centre.

A solicitor will cost you.... (£?) so you'll have to weigh up that cost against the cost of the Deed of Surrender.

I suspect that in the end, whether my view is right, or the views of jjlandlord and RAS, will depend on a court's decision, and even a solicitor will be hard put to state which way a court would go conclusively.

Of course, as with all legal disputes, if you can reach a compromise or amicable agreement without resorting to the courts it is to everyone's benefit.

jjlandlord

Guys, note that I corrected my previous post.

bouicca21

For what it's worth I think GM is right - there is a clause allowing you to give 2 months notice at 4 months. The deed of surrender is necessary if you want to leave earlier, or not give the requisite notice.

cimla

Thanks once again all.

I went to the CAB and they suggested Shelter, contacted them and they suggested speaking to a solicitor.

I will be putting my notice in, in one week i shall send a copy to the agency and landlord. I will then question these charges and the break clause to see what answer they have.

When i was in the agency signing the agreement, the break clause was not included, the lady then noticed it and added it before i signed it. Maybe there were other mistakes in it. Either way i shall seek as much free advice/opinions before shelling out lots of money.

Thanks all.