Break Clause Interpretation

princeofpounds

Ah ok, so this is the real question. The summary table indicates the existence of a 12 month mutual break clause, but that clause does not appear anywhere else in the contract. Forget the clause you originally quoted, it is not relevant to your situation.

Something that appears unexplained in a table is very weak. What is a break clause in this contract? It's not a defined legal term in its own right, it has to be explained in the contract. How is it activated by the landlord? What does the '12 months' apply to, serving or expiry? The contract is silent of all of this and that makes the case to argue for repossession based upon it incredibly shaky. 

This is one of those questions only a court could ultimately decide. There is a general principle for consumer contracts that in the event of genuine ambiguity, the interpretation is usually made in favour of the weaker party who did not draft the contract i.e. you. So personally I think it's highly likely that a court would refuse to allow the 12 month break. But I can't promise you that 100%.

It would not cost very much to defend the repossession claim, if you were minded to do so. You would not be penalised for taking it to a court decision apart from (presumably) the loss of a reference from the landlord. It's highly unlikely you would be asked to pay costs if you lose, although again I can't promise you that 100%. 

AndyW79

princeofpounds said:

Ah ok, so this is the real question. The summary table indicates the existence of a 12 month mutual break clause, but that clause does not appear anywhere else in the contract. Forget the clause you originally quoted, it is not relevant to your situation.

Something that appears unexplained in a table is very weak. What is a break clause in this contract? It's not a defined legal term in its own right, it has to be explained in the contract. How is it activated by the landlord? What does the '12 months' apply to, serving or expiry? The contract is silent of all of this and that makes the case to argue for repossession based upon it incredibly shaky. 

This is one of those questions only a court could ultimately decide. There is a general principle for consumer contracts that in the event of genuine ambiguity, the interpretation is usually made in favour of the weaker party who did not draft the contract i.e. you. So personally I think it's highly likely that a court would refuse to allow the 12 month break. But I can't promise you that 100%.

It would not cost very much to defend the repossession claim, if you were minded to do so. You would not be penalised for taking it to a court decision apart from (presumably) the loss of a reference from the landlord. It's highly unlikely you would be asked to pay costs if you lose, although again I can't promise you that 100%. 

Thanks Prince,
That's my thinking also as it is not explained or developed anywhere else in the contract, its just that phrase. Don't get why the worded break clause is not relevant?
Nevertheless I believe that the 12 month break clause "would be valid" if in the chapter where it's described it would put 2020 not 2021, but of course that is my biased mind wanting that to be the case. When I re read the contract some days ago I thought it was/could be a mistake,which it would be benefit me.

grumiofoundation

AndyW79 said:

saajan_12 said:

AndyW79 said:

Thanks Ssayan_12,

The problem is that there is a mutual 12 month break clause (worded in one sentence with no dates), so potentially they could end at 12 months which would be the on 8th of July of of 2020 

What's the one sentence (verbatim) and where is this written? eg which section of the tenancy agreement / in other communication?

Also what is your preference - do you want to leave earlier, or stay longer?

Thanks ssajan,
Its in the summary of the agreement in a row of a table: Break Clause :  Yes – Mutual 12-month break clause and we want to stay the two years we agreed.

If it is a (valid) 12 month break clause they have surely missed their chance to exercise this anyway? Since 2 months notice would have needed to have been served at 10 months (8th may 2020)? 

saajan_12

AndyW79 said:
Thanks ssajan,

Its in the summary of the agreement in a row of a table: Break Clause :  Yes – Mutual 12-month break clause and we want to stay the two years we agreed.

Ok so we have a vague break clause at the top vs a specific 2021 earliest termination, deeper in the T&Cs which isn't really a break clause. 
The 12 month clause being in the summary, is more likely to be specifically negotiated and therefore what the parties intended, but its not clear on several points eg:
- when the 12 months starts eg from signing date / tenancy commencement / from service of notice / ..
- whether the 12 months is earliest expiry / earliest date of service / length of notice needed / ..
- whether there are any other conditions eg costs payable, replacement tenant found etc
- one time break clause AT the 12 month point or any time after 12 months?
Unless this is clarified in other written communication specifying what both parties intended, then the vagueness plus the contradiction in the more specific 'break clause' stated in the T&Cs, I'd expect there wasn't really a meeting of the minds on the break clause, so it wouldn't be enforceable. 

For now, has the LL made any  indication that they would like the property back? If the LL did try to use the break clause, they would have to serve notice, apply for a possession order, wait through court delays due to coronavirus, your defence re the validity of the clause would mean it needs a fuller hearing rather than just a rubber stamp.. by which point it'll be late 2020 before they get a vacant property. Plus reletting would be harder given less demand as more people are likely to want to stay put.. 

Bottom line, my expectation is the 12 month clause wouldn't be enforceable due to vagueness / contradiction, though it is possible a court disagrees. Its also unlikely that the LL would want to enforce it, given difficulties in reletting at the moment, and even if they did, you'll likely have at least until late 2020. 

AndyW79

grumiofoundation said:

AndyW79 said:

saajan_12 said:

AndyW79 said:

Thanks Ssayan_12,

The problem is that there is a mutual 12 month break clause (worded in one sentence with no dates), so potentially they could end at 12 months which would be the on 8th of July of of 2020 

What's the one sentence (verbatim) and where is this written? eg which section of the tenancy agreement / in other communication?

Also what is your preference - do you want to leave earlier, or stay longer?

Thanks ssajan,
Its in the summary of the agreement in a row of a table: Break Clause :  Yes – Mutual 12-month break clause and we want to stay the two years we agreed.

If it is a (valid) 12 month break clause they have surely missed their chance to exercise this anyway? Since 2 months notice would have needed to have been served at 10 months (8th may 2020)? 

True they should have it raised already with the notice break conditions.

AndyW79

saajan_12 said:

AndyW79 said:
Thanks ssajan,

Its in the summary of the agreement in a row of a table: Break Clause :  Yes – Mutual 12-month break clause and we want to stay the two years we agreed.

Ok so we have a vague break clause at the top vs a specific 2021 earliest termination, deeper in the T&Cs which isn't really a break clause. 
The 12 month clause being in the summary, is more likely to be specifically negotiated and therefore what the parties intended, but its not clear on several points eg:
- when the 12 months starts eg from signing date / tenancy commencement / from service of notice / ..
- whether the 12 months is earliest expiry / earliest date of service / length of notice needed / ..
- whether there are any other conditions eg costs payable, replacement tenant found etc
- one time break clause AT the 12 month point or any time after 12 months?
Unless this is clarified in other written communication specifying what both parties intended, then the vagueness plus the contradiction in the more specific 'break clause' stated in the T&Cs, I'd expect there wasn't really a meeting of the minds on the break clause, so it wouldn't be enforceable. 

For now, has the LL made any  indication that they would like the property back? If the LL did try to use the break clause, they would have to serve notice, apply for a possession order, wait through court delays due to coronavirus, your defence re the validity of the clause would mean it needs a fuller hearing rather than just a rubber stamp.. by which point it'll be late 2020 before they get a vacant property. Plus reletting would be harder given less demand as more people are likely to want to stay put.. 

Bottom line, my expectation is the 12 month clause wouldn't be enforceable due to vagueness / contradiction, though it is possible a court disagrees. Its also unlikely that the LL would want to enforce it, given difficulties in reletting at the moment, and even if they did, you'll likely have at least until late 2020. 

Thanks again Saajan and much appreciated!!
Agree with your first point in the vagueness and no it has not been raised, if they do will get back and share.
Thanks to all for the support!!
Regards,
Andy

princeofpounds

AndyW79 said:

That's my thinking also as it is not explained or developed anywhere else in the contract, its just that phrase. Don't get why the worded break clause is not relevant?

Not relevant to your actual question in a variety of ways. It can't apply for another year. It's got nothing to do with the supposed 12 month clause noted in the summary. It's not really a break clause anyway, as has been highlighted - it would just be the normal termination of the tenancy at the expiry of the fixed term, although it has to be by the Section 21 notice process to be enforceable.

AndyW79

princeofpounds said:

Not relevant to your actual question in a variety of ways. It can't apply for another year. It's got nothing to do with the supposed 12 month clause noted in the summary. It's not really a break clause anyway, as has been highlighted - it would just be the normal termination of the tenancy at the expiry of the fixed term, although it has to be by the Section 21 notice process to be enforceable.

Thanks Prince,

One last comment: will (or can) section 21 overrule the STA lets say the LL wants to sell the house or wants to use it before the 2 years July 2021 date? Could there be a loop hole there?

Regards,
Andy 

saajan_12

AndyW79 said:

Thanks Prince,

One last comment: will (or can) section 21 overrule the STA lets say the LL wants to sell the house or wants to use it before the 2 years July 2021 date? Could there be a loop hole there?

Regards,
Andy 

You're determined to worry aren't you! 
A Section 21 can be used at or after the end of a fixed term, not randomly during the fixed term. Your fixed term ends July 2021, so that's the earliest a valid S21 can expire. 

greatcrested

and to be clear - if the landlord sells the property he does so with your tenancy in place. The new property owner becomes your new landlord, with the existing tenancy unchanged.

The only relevant law is the Landlord & Tenant Act 1985

which says:

3 Duty to inform tenant of assignment of landlord’s interest.

(1)If the interest of the landlord under a tenancy of premises which consist of or include a dwelling is assigned, the new landlord shall give notice in writing of the assignment, and of his name and address, to the tenant not later than the next day on which rent is payable under the tenancy or, if that is within two months of the assignment, the end of that period of two months.

(2)If trustees consititute the new landlord, a collective description of the trustes as the trustees of the trust in question may be given as the name of the landlord, and where such a collective description is given—

(a)the address of the new landlord may be given as the address from which the affairs of the trust are conducted, and

(b)a change in the persons who are for the time being the trustees of the trust shall not be treated as an assignment of the interest of the landlord.

(3)A person who is the new landlord under a tenancy falling within subsection (1) and who fails, without reasonable excuse to give the notice required by that subsection, commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.