6-MONTH BREAK CLAUSE, WHY YOU NEED IT

6-MONTH BREAK CLAUSE, WHY YOU NEED IT

Why landlords need a break clause

A break clause is a term which can be inserted into a tenancy agreement to allow either the landlord or the tenant to get out of the lease before the end of the term, subject to them giving two months’ written notice.

I’d advise all tenants and landlords to insist on a break clause, even if both would ideally like a long let. This ensures that if things don’t work out the way you hope, neither party is locked into the agreement for too long.

Landlords need to be sure that their tenant is going to pay their rent on time and look after the property before committing to a long let, tenants need a few months to make sure the place they’ve rented really does live up to their expectations.

So when can the break occur?

A tenant must be offered an AST for a minimum of 6 months, so you can’t break the contract any earlier than this unless the tenant has broken the terms of their lease, such as not paying their rent or damaging the property. You can insert a break clause earlier than 6 months at the tenant’s request, but if they decided not to use it, you can’t turf them out.

You can, however, insert a beak clause any time at or after the first 6 months so if you prefer, you can have it at 7 months, 8, 9 or whatever.

If there’s no break clause, the only way to evict a tenant during the term of the contract  is by using a Section 8 notice, which can only be used if they have broken the terms of the lease. This can be a long and sometimes expensive process. If you have a break clause, you can give the tenant two month’s notice to leave at any time after the first six months, issuing what’s called a Section 21 notice, and you don’t have to give any reason.

I’ve known landlords who have wanted to get rid of tenants for anti-social behaviour – repeatedly disturbing the neighbours with parties, climbing out of windows onto flat roofs to smoke, that sort of thing – but because they haven’t inserted a break-clause into their contracts they’ve been stuck with them for 12 months.

Of course, the downside of a break clause is that it allows the tenant to leave before the end of the contact, but I think that’s a risk worth taking.