Help with break clause in fixed term contract

mattybalaam

I’m after a little bit of advice regarding our fixed term contract.

The contract was a renewal after an intial 1 year period, and after the landlord refused for us to go onto an AST we went onto a 2-year fixed to limited potential renewal fees.

However after 18 months we are considering leaving early, I have just taken a look at our latest contract which I notice had a deed of variation included for a break clause and for tenanats.

1. Break clause

1.1. The Landlord shall be entitled to serve upon the Tenant Statutory Notice of not less than two calendar months pursuant to Section 21 of the Housing Act 1988 to break this tenancy. Such Notice:

1.1.1. Shall be given to expire on the last day of a period of the Tenancy and be served in writing.

1.1.2. Shall be served in accordance with the Tenancy Terms and Conditions.

1.2. The Tenant shall be entitled to terminate this Tenancy by giving not less than one calendar months’ notice to break this tenancy provided that such Notice:

1.2.1. Will expire on the last day of a period of the Tenancy and shall be served in writing.

1.2.2. Shall be served in accordance with the Tenancy Terms and Conditions.

1.2.3. This clause replaces and or amends any relevant clauses within the Tenancy Terms and Conditions and in particular Part Four Clause 1.2.

1.3. The Tenant acknowledges that should a Notice of termination be issued, such Notice cannot be rescinded.

2. Joint Tenants/Sharers

2.1. The Tenants agree and understand that in entering into this Tenancy Agreement they commit themselves (and their guarantors – if applicable) to pay the Rent and abide by the terms set out in the Tenancy Agreement for the whole of the length of the Term of the Tenancy and potentially any continuation and that if they wish to leave early there is no obligation upon the Landlord to release them.

2.2. The Tenants who are taking this Tenancy jointly as sharers further understand that if at any time before the end of the Tenancy they decide that they want to leave the Property they will still remain liable until and unless the Landlord or the Landlord’s Agent has agreed the terms of a new Tenancy with the remaining Tenants.

2.3. In the event that, at the end of the Tenancy Term, the Tenants cannot agree as to whether to renew (with the Landlord’s agreement) or vacate the Property, all of the Tenants accept that they will, jointly as sharers, remain liable for all obligations and responsibilities under the terms of the Tenancy Agreement until and unless the Landlord or the Landlord’s Agent has agreed the terms of any new Tenancy or the Landlord is granted vacant possession.

Reading section 1 it seems that we have the rights to leave the property in the exact way as leaving and AST, with at least 1 months notice before the next payment date? However parts of section 2 appear to contradict this.

I was wondering if anyone has encountered these two conditions together?

AdrianC

It is an AST. I think you mean an SPT - statutory periodic tenancy, which is an AST that's got to the end of the fixed period.

I rather suspect 1.1.2/1.2.2 is going to be your showstopper here. 2.1 is definitely a "not before the fixed period unless the landlord agrees", even if you aren't joint tenants.

G_M

mattybalaam wrote: »

I’m after a little bit of advice regarding our fixed term contract.

The contract was a renewal after an intial 1 year period,
and after the landlord refused for us to go onto an AST You have always been on an AST and still are. Do you mean SPT or do you simply not know?

we went onto a 2-year fixed to limited potential renewal fees.
so was a new fixed term signed or not?
No idea what you mean by "limited potential reneal fees".

However after 18 months we are considering leaving early,
OK _ I'm going to assume you are 18 months into a 2 year fixed term AST.

I have just taken a look at our latest contract which I notice had a deed of variation included for a break clause and for tenanats.
Was this Deed Executed as a Deed and witnessed? Wha does it say? You do not mention it anywhere.

So OK your AST has a Break Clause (no idea where the Deed fits in):

1. Break clause

1.1. The Landlord shall be entitled to serve upon the Tenant Statutory Notice of not less than two calendar months pursuant to Section 21 of the Housing Act 1988 to break this tenancy. Such Notice:

1.1.1. Shall be given to expire on the last day of a period of the Tenancy and be served in writing.It's a fixed term tenancy. there is only one 'period' and it lasts for 2 years.

1.1.2. Shall be served in accordance with the Tenancy Terms and Conditions.

1.2. The Tenant shall be entitled to terminate this Tenancy by giving not less than one calendar months’ notice to break this tenancy provided that such Notice:

1.2.1. Will expire on the last day of a period of the Tenancy and shall be served in writing.as above

1.2.2. Shall be served in accordance with the Tenancy Terms and Conditions.

1.2.3. This clause replaces and or amends any relevant clauses within the Tenancy Terms and Conditions and in particular Part Four Clause 1.2.

1.3. The Tenant acknowledges that should a Notice of termination be issued, such Notice cannot be rescinded.

2. Joint Tenants/Sharers

2.1. The Tenants agree and understand that in entering into this Tenancy Agreement they commit themselves (and their guarantors – if applicable) to pay the Rent and abide by the terms set out in the Tenancy Agreement for the whole of the length of the Term of the Tenancy and potentially any continuation and that if they wish to leave early there is no obligation upon the Landlord to release them.
so it's a 2 year fixed term and landlord can agree or not to any Early Surrender request


2.2. The Tenants who are taking this Tenancy jointly as sharers further understand that if at any time before the end of the Tenancy they decide that they want to leave the Property they will still remain liable until and unless the Landlord or the Landlord’s Agent has agreed the terms of a new Tenancy with the remaining Tenants.as above

2.3. In the event that, at the end of the Tenancy Term, the Tenants cannot agree as to whether to renew (with the Landlord’s agreement) or vacate the Property, all of the Tenants accept that they will, jointly as sharers, remain liable for all obligations and responsibilities under the terms of the Tenancy Agreement until and unless the Landlord or the Landlord’s Agent has agreed the terms of any new Tenancy or the Landlord is granted vacant possession.

this is standard. If all joint tenants fail to leave when the fixed term expires, a SPT arises and all joint tenants remain liable.

You will need the landlord'sconsent to leave early.


See also
* Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

SmashedAvacado

I’m not sure the advice given is right

Clause 2.1 is written to cover shares accomodation where one tenant leaves and others want to stay on

I would argue that 1.2 stands on its own and gives a tenant break right on a months notice

As it’s not clear and the clause was drafted by the landlord the. It’s going to be construed in favour of the tenant

mattybalaam

Sorry for the confusion, I misrememberd AST as referring to the periodic term after an AST finished. It has been a while since I needed to know the terms.

Going to get in touch with the letting agents today to get their understanding of the contract.

SmashedAvacado

Its fine to ask them what they think, but just because they believe that it means one thing, does not mean that it doesn't say something else. The rules about how you interpret these contracts will side with you - and i am really not sure that you need to look further than clause 1.2.

If they have made a mistake, then that's their issue. 1.2 talks about "breaking" the tenancy - this to me is pretty clearly referring to the period of the tenancy - not after it, as after it there is nothing to "break". 2.1, as i have mentioned above, seems to entirely relate to sharers where one person leaves and the others want to continue / find a replacement - which i dont think is relevant to you.

Housebuy12345

Do they have a break clause that you pay money and can leave?

Try and get a lease take over?

mattybalaam

Thanks for everyone’s help. The letting agent has confirmed that we can break with one months notice with no penalty.

zippygeorgeandben

Thank you for coming back to us with the conclusion.

G_M

mattybalaam wrote: »

Thanks for everyone’s help. The letting agent has confirmed that we can break with one months notice with no penalty.

That's great news.


Call me a cynic, but have they put that in writing or told you on the phone......?

G_M

SmashedAvacado wrote: »

I would argue that 1.2 stands on its own and gives a tenant break right on a months notice

As it’s not clear and the clause was drafted by the landlord the. It’s going to be construed in favour of the tenant

Yes, 1.2 stands on its own (relating presumably to sole tenancy agreement).


1.2.1 "Will expire on the last day of a period of the Tenancy" should really say "rental period" if it is supposed tomean what I and you imagine the LL/agent intended it to mean....


Yes, a court would probably rule the intention was understood, even if the wording is unclear, and yes, courts tend to rule in favour of the party who did not draft the contract.


But you never know.


Water under the bridge now though!