Break clause in AST and rent increase?

gelato_cat

Just curious really - not asking for me, but it's a question that came up recently in a local group I'm in and a search of the MSE forums / various legal websites didn't give me the answer.

Have people been seeing situations where landlords are activating break clauses in ASTs as a means of increasing the rent?

By that I mean: the landlord has suggested a rent increase to the tenant within the period of the AST, and made it clear that if the tenant doesn't agree, they will activate the break clause and issue a Section 21 notice?

This has happened to one of the women in the group and it looks like there is nothing in the law to stop the landlord from doing this, plus I can see why the landlord is doing it because there is such a high demand for rental properties now, so the market is in his favour.  She agreed to the rent increase to keep a roof over her head but is looking for somewhere else and is going to activate the clause herself to get out of there before he increases it again because the presence of the break clause is stressing her out.

propertyrental

How much rent increse?

Evicting via S21 takes time, and results in LL costs eg void period, re-marketing/agent fees,  new tenant set-upcosts. So the increased rent from the new tenant must be signifcantly enough greater to cover those costs and make the hassle worthwhile.

Existing regular paying tenants have a value over and above the rent.

But to answer your Q, no I've notseen or heard of this happening  but of course that doesn't mean it ever happens.

gelato_cat

The rent was originally more than £1000 / month, and the increase was nearly £400 / month, which they negotiated down from an increase of £500 / month.

The AST is for three years and they are just over a year into it.

LL is going to renegotiate a higher rent with them this summer because he didn't get the full increase last time.

Judging from my research, this is all legal because if they don't agree then he can just activate the break clause.  I get what you're saying about the lead time and hassle but at the end of the day she will still have to leave eventually if she receives an S21.

_Penny_Dreadful

The landlord can invoke the break clause which would then turn the fixed term tenancy into a periodic tenancy meaning he could then use a section 21 to start the eviction process or a section 13 to increase the rent. This is yet another reason why I hate break clauses, on the face of it the tenant has 3 years of security but in reality she doesn’t. 

Do you know the exact wording of the break clause in the agreement? Some are poorly drafted so are ineffective or maybe the woman can run the clock down umming and ahing about the rent increase until it’s too late for the break clause to be used. 

propertyrental

_Penny_Dreadful said:

Do you know the exact wording of the break clause in the agreement? Some are poorly drafted so are ineffective or maybe the woman can run the clock down umming and ahing about the rent increase until it’s too late for the break clause to be used. 

Some BCs have to be invoked at a specific point, but most (well writtenones can be invoked at any time after a specific point.

So yes, quoting the BC would help.

gelato_cat

_Penny_Dreadful said:

This is yet another reason why I hate break clauses, on the face of it the tenant has 3 years of security but in reality she doesn’t.

I agree - if we'd known then what we know now about the direction of the economy, a three-year contract WITHOUT a break clause would have been great for so many people.

gelato_cat

Thanks, both of you - I'll try to find a suitable time to ask her what the clause says!