What Is a Break Clause? Explaining Rental Contracts
The rental market can be a confusing place.
Sometimes it can feel like letting agents and landlords speak another language. It pays to scrub up on the terminology and understand what it is you’re actually signing. For instance, do you know how to go about breaking a lease? You’re going to need an understanding of the terms of your break clause.
So, what is a break clause in a tenancy agreement? We explain all you need to know here.
What is a break clause?
A break clause is a section of your tenancy agreement which details how you or the landlord can implement the early termination of a lease.
Break clauses can be landlord only or tenant only – meaning only the named party is entitled to exercise the break clause. Typically it will be mutual, meaning both parties are able to serve notice of leave. Ultimately this is about providing both you and the landlord with a degree of flexibility, giving you both an opportunity to exit the agreement. This can be used for many reasons, including sudden changes of circumstance.
Your tenancy will typically be a fixed term agreement, anything from 6 months to 3 years. To get out of your fixed term early, you’ll need either a break clause or your landlord’s permission.
As a tenant you need to read the small print in your tenancy agreement thoroughly. Make sure you fully understand the implications of any break clause. If there’s no provision for early lease termination you can ask for a break clause to be included as part of the rental negotiations.
What should it state?
The break clause should clearly state:
- When you can give notice
- How much notice you’re expected to give
For example, you might be not able to give notice until a year into your tenancy.
Who writes the break clause for the tenancy agreement?
Irrespective of who asks for the break clause to be included, it’ll usually be written by the letting agent. For this reason, it’s important you check the clause carefully to ensure it correctly reflects what has been agreed or requested. In order for this to be legally binding in a court of law, it has to be deemed ‘fair’ to both landlord and tenant.
Who implements a break clause?
In agreements with a mutual break clause, both landlord and tenant have the right to implement the tenancy agreement’s break clause.
The landlord can terminate the tenancy early without being required to give a reason. Having said this, selling the property or letting to a family member are usually the most common reasons.
The tenant can also take advantage of the break clause without giving a reason. There are plenty of different circumstantial reasons why a break clause would be used. This is why it’s so vital to ensure it’s in your contract.
What are the restrictions on a break clause?
When drafting or negotiating the break clause in your tenancy agreement, ensure it’s clearly stated how long has to pass before it can be implemented by either party.
Usually, this isn’t before 6 months into the tenancy. This is because the Housing Act 1988 prevents the court from awarding possession of the house to the landlord before 6 months of a tenancy has passed. The exception for this is if the landlord wishes to use one of the 17 grounds for eviction.
How do you implement a break clause?
Most break clauses have specific requirements attached to them and stipulate a particular way notice should be served. These requirements and stipulations are unique to the terms of your tenancy agreement – they can vary a lot depending on your landlord.
Having said this, typically a landlord is required to serve two months’ notice and provide a Section 21 notice to the tenant. The tenant is also typically required to give two months’ notice if they want to end the agreement. They usually have to do this in writing, so it’s worth checking with the landlord or agent whether an email is accepted. If giving notice by email, always ask for a reply to confirm it’s been received.
It’s worth noting, once you’ve served notice to end the tenancy agreement, you can’t withdraw this without the agreement of the landlord.
How to use a break clause
Follow these steps:
- Find out if your contract has one
- It might not be labelled as a ‘break clause’. Look for anything regarding early termination of your contract
- Check when you can use it (e.g. 6 months, a year…)
- Give notice
What if something is unclear?
If anything is unclear, e.g. the rules surrounding when you have to give notice, ask your landlord. Ensure you ask, and get their response, in writing to prevent any future disputes. It’s always easier to have a paper trail.
What happens after you give notice?
Give notice in the way the break clause details – putting it in writing to your landlord. Your tenancy ends at the end of this notice period; you won’t be liable for rent afterwards – nor will you have the right to live there.
In most cases, you won’t be able to withdraw this notice, so ensure it’s what you want to do. You should also make sure you have somewhere to go afterwards, whether it’s another rental property or elsewhere.
What if you don’t have a break clause?
It’s likely you’ll still be able to negotiate an early end to your tenancy agreement. Get in contact with your landlord and put your position across.
What happens next?
Here’s a tenant moving checklist for what to do at the end of your tenancy:
- Do a thorough deep clean of your rental property
- Ensure you get your full deposit back. If any deposit deductions have been made that you feel are unfair, dispute them
- Carefully pack your items, ensure not to leave anything behind that’s yours
- Make sure you don’t take anything from the property that’s not yours, e.g. certain fixtures, furniture or fittings
Want more renting advice?
Still trying to make sense of the rental market? We can help. We’ve produced a wide range of explanatory and advisory articles to give your search a boost. From tenancy agreements to advice for letting from private landlords – we’ve got it covered. Find out more renting advice and guidance here.
Looking to buy?
If you’re terminating your tenancy because you’re looking to buy your first home, we can help you get on the property ladder. From saving for a deposit to mortgages, we’ve got you covered every step of the way. Check out our first time buyer advice.
Last Updated: November 1st, 2024
