Break Clauses in Tenancy Agreements: What You Need to Know
As a tenant, one of the most important things to understand about your tenancy agreement is the presence of a break clause. This clause allows either you or the landlord to end the tenancy before the fixed term has ended. However, it’s important to understand the terms of the break clause, as they can vary between agreements.
In this article, we’ll explore what break clauses are, how they work, and what you should consider before exercising them.
What Are Break Clauses?
A break clause is a provision within a tenancy agreement that allows either the tenant or the landlord to terminate the agreement before the end of the fixed term. This can be useful for either party, as circumstances can change during the tenancy which may require the agreement to be ended early.
Break clauses can be `mutual` or `unilateral`. A mutual break clause allows either party to end the tenancy, while a unilateral break clause only allows one party to terminate the agreement. This is something to be mindful of when signing a tenancy agreement, as a landlord may include a unilateral break clause that only benefits them.
How Do Break Clauses Work?
The details of the break clause will be outlined in the tenancy agreement, so it’s important to read this carefully before signing. Typically, a break clause will outline the timeframe in which either party can end the agreement, and the conditions that must be met in order to do so.
For example, a landlord may include a break clause that allows them to terminate the tenancy after six months, providing two months’ notice in writing. Alternatively, a tenant may have the option to break the agreement after a year, with three months’ notice.
It’s important to note that a break clause cannot generally be exercised during the initial six months of a tenancy agreement.
What to Consider Before Exercising a Break Clause
Before deciding to exercise a break clause, there are a few things to consider:
1. Notice Period: Ensure that you provide the required notice period as stated in the tenancy agreement, in writing. Failure to provide the correct notice may result in the tenancy continuing beyond the agreed break clause.
2. Rent Payments: You will be liable for rent payments up until the end of the notice period. Ensure that you have the funds to cover this before exercising a break clause.
3. Deposit: If you are a tenant, your deposit will usually be held by a deposit protection scheme. Make sure that you follow the correct procedure for claiming your deposit back if you are exercising a break clause.
4. Property Condition: Ensure that the property is left in the condition agreed upon in the tenancy agreement. Failure to do so could impact the return of your deposit.
In conclusion, break clauses can be useful for both tenants and landlords, providing flexibility in the event that circumstances change during the fixed term of a tenancy agreement. However, it’s important to understand the terms of the break clause and exercise it correctly to avoid any misunderstandings or disputes.