Break clause during 6 mth AST - question

CDESPO

Hello guys,


We have a 6 month AST renewal that was renewed with an increased rental amount at the end of a 12 month AST.


As we are buying a house we actioned the break clause contained in the agreement in month 3 - effectively ending the agreement in month 5 of the AST.


The landlord has come back and claimed that the break clause can only be actioned in month 4 as a minimum and therefore we are responsible for the full term of the 6 mth AST. The break clause wording contained is as follows:


"The agreement is for a period of 6 months (less a day). At least two months previous written notice may be given at any time by either party to vacate the property. The agreement can only be terminated on a rent day"


There is no wording stating that the obligations to the tenant are that the two months notice can only end the agreement on the term date.


I spoke to the solicitor doing our house move who said that the legislation stating that a break clause in a 6 mth AST limits the landlord from ending the agreement earlier than 6 mths (to protect tenants) however the if the wording of the break clause allows the tenant to end the agreement early (as it does) then the tenant CAN end the agreement per the wording above.


Our landlord has said to us that he will take the rent out of the deposit in the event that we don't pay it (which we are not going to do)


Has anyone dealt with a similar situation? Also to note - the landlord never protected the deposit until 8 mths into the original 12mth AST after I enquired with the agents about why we never received the certificate when we moved in.

Miss_Samantha

CDESPO wrote: »

I spoke to the solicitor doing our house move who said that the legislation stating that a break clause in a 6 mth AST limits the landlord from ending the agreement earlier than 6 mths (to protect tenants) however the if the wording of the break clause allows the tenant to end the agreement early (as it does) then the tenant CAN end the agreement per the wording above.

The solicitor is incorrect but that is not relevant.

The clause as you quoted it allows you to end the tenancy at any time provided your notice meets the conditions.
Either your landlord does not understand his own agreement or he is trying it on.

G_M

CDESPO wrote: »

We have a 6 month AST renewal that was renewed with an increased rental amount at the end of a 12 month AST.
To clarify: you had a 12 month contract. At the end of 12 months, you signed a 6 month contract with the Break Clause? Yes?

As we are buying a house we actioned the break clause contained in the agreement in month 3 - effectively ending the agreement in month 5 of the AST.
OK

The landlord has come back and claimed that the break clause can only be actioned in month 4 as a minimum and therefore we are responsible for the full term of the 6 mth AST. The break clause wording contained is as follows:

"The agreement is for a period of 6 months (less a day). At least two months previous written notice may be given at any time by either party to vacate the property. The agreement can only be terminated on a rent day"
Since the Break Clause says nothing about a minium 4 months, the landlord is wrong.


There is no wording stating that the obligations to the tenant are that the two months notice can only end the agreement on the term date.
Correct

I spoke to the solicitor doing our house move who said that the legislation stating that a break clause in a 6 mth AST limits the landlord from ending the agreement earlier than 6 mths (to protect tenants)
The solicitor either is wrong, or you did not explain this 6 month contract follows a 12 month contract.
You have already been a tenant for 14 (?) months. See below.

however the if the wording of the break clause allows the tenant to end the agreement early (as it does) then the tenant CAN end the agreement per the wording above.
Correct

Our landlord has said to us that he will take the rent out of the deposit in the event that we don't pay it (which we are not going to do)
in which case you raise a dispute with the deposit protection scheme. You will win (providing you gave correct notice).

The deposit IS protected in a scheme yes? (see below).

Has anyone dealt with a similar situation? Also to note - the landlord never protected the deposit until 8 mths into the original 12mth AST after I enquired with the agents about why we never received the certificate when we moved in.

Ah! Then you can seperately claim via the courts for the penalty of 3 times the deposit for late registration.

See

* Deposits: payment, protection and return

The Housing Act 1988 section 21 says:

Where an order for possession under subsection (1) or (4) above is made in relation to a dwelling-house let on a tenancy to which section 19A above applies, the order may not be made so as to take effect earlier than—

(a)in the case of a tenancy which is not a replacement tenancy, six months after the beginning of the tenancy, and

(b)in the case of a replacement tenancy, six months after the beginning of the original tenancy.

thesaint

It's strange that the agreement is 6 months(less a day).

A tenancy beginning on the 1st Jan would end on the 29th June by this method.

It would help if you state what date the agreement started, and the relevant dates of your notice.

pmlindyloo

G_M, out of interest, does the renewal of the tenancy not create a new tenancy of 6 months? Can a break clause be inserted into a 6 months fixed term that ends before the end of that 6 months?

Since the OP's deposit wasn't protected, as far as legislation requires, then probably the simplest thing is for the OP to negotiate with the LL to leave when they want saying that they wouldn't make a claim about the deposit and in return the rent would not be taken from the deposit as threatened. Of course, the agreement would need to be in writing.

CDESPO

Thank you both - Yes. The solicitor spoke to their tenancy agreement expert so there may have been a mixed message about the renewal - but yes it was a 6mth extension (with increased rent) to the original 12 mth term. So yes in effect we submitted notice after 15 mths from the start of the original tenancy.

Also yes the deposit was not protected until month 9 (just checked actually). I have the certificate that I got from the protection service showing Deposit Coleected form Tenants - 18 Feb 2015 and Period of protection dated from 25th Nov 2015 (the week I enquired about the protection).

Now the landlord has openly said he will take the month 6 rent out of the deposit ( I expect he will also find reaosn to claim for the remainder of the deposit as well as he has a track record of trying to claim 100% of people's deposits we discovered). Given he has openly stated he will do this - do I start the 'letter before action' process now (2 weeks before we are due to move out) stating he has given me reason to believe he will not return the deposit, or do I wait and go through the arbitration service of the protection scheme?

HappyMJ

thesaint wrote: »

It's strange that the agreement is 6 months(less a day).

A tenancy beginning on the 1st Jan would end on the 29th June by this method.

It would help if you state what date the agreement started, and the relevant dates of your notice.

It's a very poorly worded tenancy agreement.

We all know it really means the last day of a 6 month period which would be the 30th June. Maybe the LL thought 6 months means 1st Jan to 1st July as many people do (that's frustrating trying to explain)....and one less day meant the 30th June.

Worded as it is yes 6 months less one day really does mean the 29th June and rent is due on the 1st July which gets very confusing.

CDESPO wrote: »

Now the landlord has openly said he will take the month 6 rent out of the deposit ( I expect he will also find reaosn to claim for the remainder of the deposit as well as he has a track record of trying to claim 100% of people's deposits we discovered). Given he has openly stated he will do this - do I start the 'letter before action' process now (2 weeks before we are due to move out) stating he has given me reason to believe he will not return the deposit, or do I wait and go through the arbitration service of the protection scheme?

Just wait...if you've got the option of not paying any more rent then I would stop paying the rent. It's going to get messy.

CDESPO

@the saint

The renewal was made on the 18th Feb 2016. The Term is stated as "6 months (less a day)".

No reference to the Term DATE is included in the agreement.

We served written notice via recorded delivery (with acknowledged receipt) on the 13th May for the agreement to end on the 17th July.

Hope that helps clarify

G_M

pmlindyloo wrote: »

G_M, out of interest, does the renewal of the tenancy not create a new tenancy of 6 months?
Yes
Can a break clause be inserted into a 6 months fixed term that ends before the end of that 6 months?
A Break Clause can apply whenever the wording says it will apply. It could, for example, apply at any time subject to 1 days notice, meaning the tenant could end the tenancy on day 2!

However, Statute would still apply, limiting the landlord's ability to gain possession (via the required S21 Notice). The LL would still have to give 2 months notice for the S21 to be valid, and could not do so within the 1st 6 months of a tenancy that was not a follow on tenancy (see my edited post above).


Since the OP's deposit wasn't protected, as far as legislation requires, then probably the simplest thing is for the OP to negotiate with the LL to leave when they want saying that they wouldn't make a claim about the deposit and in return the rent would not be taken from the deposit as threatened. Of course, the agreement would need to be in writing.

That is certainly a way forward, which could avoid a formal dispute.

CDESPO

All thank you immensely - Also I feel I must add that I probably described the solicitors opinion incorrectly on the Landlord's position. He was describing the restrictions as it related to a S21 notice - so its probably my bad description of our conversation than his bad advice!

CDESPO

Also if it goes to the deposit protection service dispute channel - do they simply arbitrate onthe return of the deposit or do they pas judgement on whether the landlord should pay the 1-3 X compensation as well?