Can I exercise break clause and notice period

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    Can I exercise break clause and notice period

    According to the tenancy agreement, I, as landlord, may terminate the tenancy by serving a break notice on the tenant. This is an assured shorthold tenancy and the break notice period must be at least two months. Am I correct in thinking that this means that I would seek possession under Section 8 rather than Section 21? And that the notice period has been extended to six months because of coronavirus?

    The property is subject to mortgage and the bank has said that they cannot continue to provide this mortgage due to regulation. This is a problem because the inter-governmental agreement between the UK and the country in which I live prohibits a UK lender from lending to me such that it will be extremely difficult if not impossible to find an alternative lender. I am therefore looking to sell the property but clearly need the tenants to vacate before I can do so.

    Thanks for any advice you might be able to offer.

    #2
    Please answer the questions in the link below with exact dates. Also please quote the exact wording of your break clause.

    https://forums.landlordzone.co.uk/fo...om-new-posters

    Comment


      #3
      Eviction will probably take 12 months ish, break clause or not.

      Please quote EXACT wording of all break clauses, both for landlord and tenant.

      Suggest you pay off mortgage.

      Any arrears and if so have you already served S8?

      Or encourage tenant to leave £££££
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        Originally posted by wildflower View Post
        I am therefore looking to sell the property but clearly need the tenants to vacate before I can do so.
        You could look at selling with the tenant in place.

        That would be quicker than getting vacant possession, but likely a lower price.

        Comment


          #5
          Originally posted by wildflower View Post
          Am I correct in thinking that this means that I would seek possession under Section 8 rather than Section 21?
          Almost certainly not.
          I don't think there are any S8 grounds you could use.

          But we need the response to #2 to give reasonable advice.

          Comment


            #6
            Thanks for the input so far. This is very much appreciated! Here are answers to the questions.

            Q1 – Where is the rented property located (England / Wales / Scotland / N Ireland)? England

            Q2 – What type of Tenancy Agreement (TA) is this e.g. sole tenant / multiple tenant / room only? Assured shorthold tenancy - sole tenant

            Q3 – What date did current TA start dd/mm/yy? 14 Sept 2018

            Q4 – How long was initial fixed term (6/12/24 months / other)? 36 months

            Q5 – Does the TA state that rent is due weekly? / 4-weekly? / per calendar month (if so, on what same date each month)? Monthly on 14th

            Q6 – Did the TA require a tenant damage deposit to be paid? If so, on what date was this paid (dd/mm/yy)? Yes. I don't know on what date it was paid as this was to an agent, but I assume in September 2018 before they moved in to the house.

            Q7 – If your query relates to a notice for repossession from the landlord (a Section 8 or Section 21 notice) or a tenants's notice to quit to the landlord, please provide the exact date the notice was sent/received (dd/mm/yy). No notice given as yet

            Q8 – Does the landlord live in the same property as the tenant? No


            Here are relevant excerpts from the agreement:

            Mandatory grounds:

            "Ground 1:The Landlord hereby notifies the Tenant that (s)he is the owner occupier of the Premises within the meaning of Ground 1 Part 1 of Schedule 2 of the Housing Act 1988 and that at some time before the beginning of the Tenancy the Landlord who is seeking possession or, in the case of joint Landlords seeking possession, at least one of them occupied the dwelling-house as their only or principal home; or the Landlord who is seeking possession or, in the case of joint Landlords seeking possession, at least one of them requires the dwelling-house as their or their spouse’s only or principal home and neither the Landlord (or in the case of joint Landlords any one of them) nor any other
            person who, as Landlord, derived title under the Landlord who gave the notice mentioned above acquired the reversion on the Tenancy for money or money’s worth and that possession of the Premises may be recovered under Ground 1 of part 1 of Schedule 2 of the said Housing Act 1988 and the Tenant upon signing the Agreement acknowledges that (s)he has received such notice."

            "Ground 2: at the start of the Tenancy the Tenant was advised that the Landlord owns the property, normally lives there and that their lender may have a power of sale of the Property if the Landlord does not make their mortgage payments for the Property;"

            Mutual Break

            "The Tenant or the Landlord or both may terminate this Tenancy by serving Notice (Break Notice) on the other. The Break Notice must be at least two months prior written notice to expire on any date (the Break Date) after 13 September 2019. The Break Notice must be given in writing and served in accordance with this Tenancy (see paragraphs (n) & (o) of the General Tenancy Conditions of the Tenancy Agreement). Following service of the Break Notice this Tenancy shall terminate on the Break Date without prejudice to any right or remedy that either party may have in relation to any antecedent breach or non-observance of the Tenancy."

            Paragraphs (n) and (o) detail how notices are to be served.

            The agent persuaded us that we should let for a 3 year term as otherwise we would find it difficult to find tenants. It's the sort of property used for corporate relocations. In hindsight I realise this was poor advice, given for the agent's benefit only as they would receive fees relating to the 3 year term up front. However, what is done, is done.

            Other facts:

            The property was our home before we relocated overseas.
            I do not know if the agent mentioned the fact that there is a mortgage on the property to the tenants prior to let. I spoke to the lender last week and they said that they would be writing to tell us they cannot continue to provide a mortgage because we live where we do. Without sight of the letter I don't know the terms for withdrawal of that lending facility.
            The tenants are good tenants.

            If it is possible to re-mortgage in the UK (despite the inter-governmental agreement apparently prohibiting this) then there will be significant fees and we will end up with minimal yield but the ongoing burden of time required to manage a rental property. The alternative is to borrow overseas, transfer the funds to the UK and pay off the mortgage. Then we'll end up with a mismatch of rent being paid in one country and mortgage payments due in another and again this is not sensible financially.

            Thanks again for your input!





            Comment


              #7
              If you exercise the break clause, what happens will depend on the tenants.
              If they move out, all will be well.
              If they don't, a new, periodic, tenancy will arise and you will have to serve notice and go to court to possess.
              That process could take months (possibly even years at the moment).

              I would start by talking to the tenants and see if you can agree with them that they'll move out because you will have to repossess otherwise (which won't be pleasant for either of you).
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by wildflower View Post

                Here are relevant excerpts from the agreement:

                The agent persuaded us that we should let for a 3 year term as otherwise we would find it difficult to find tenants. [...] In hindsight I realise this was poor advice, given for the agent's benefit only as they would receive fees relating to the 3 year term up front.

                The tenants are good tenants.

                If it is possible to re-mortgage in the UK (despite the inter-governmental agreement apparently prohibiting this) then there will be significant fees and we will end up with minimal yield but the ongoing burden of time required to manage a rental property. The alternative is to borrow overseas, transfer the funds to the UK and pay off the mortgage. Then we'll end up with a mismatch of rent being paid in one country and mortgage payments due in another and again this is not sensible financially.

                Ground 1 does not apply as you do not want to live there.

                Ground 2 is for use by mortgage company, not LL.

                You are right about agent acting in its interest not yours (which is unlawful, but many do it).

                I would suggest talking to the tenants(voice, not email/message ping-pong) to explain your position and see if you can come to an arrangement with them and get them to end the tenancy by them exercising the break clause.
                That would be the quickest way to get vacant possession.

                You could also seek to allow estate agents in to do valuation and prepare particulars before they depart (probably asap).

                The other options in increasing time to selling are:
                1. Raise funds locally and continue letting.
                2. sell with tenant in place.
                3. you exercise break clause and then take whatever steps are necessary.
                  1. If all goes well, then the T will leave after a couple of months.
                  2. Exercising break clause means that a SPT arises if tenant does not leave.
                  3. I do not know if you can serve a S21 notice on or before the date you serve the break notice (legal advice required).
                  4. some financial incentive may speed things along.
                    (e.g refund a couple of months rent if they leave by agreed date;
                    you will not seek deductions from deposit unless there is significant damage (say over £300)).
                  5. Agree to be flexible with their departure date.

                Comment


                  #9
                  Thanks to you all for your input. It's very helpful and gives me some options to think about.

                  Comment


                    #10
                    i would be very interested to know what would be the effective discount to sell with a tenant in situ. Given that some buyers would prospectively be BTL people, how much of a haircut would you actually have to take??

                    Comment


                      #11
                      Originally posted by MdeB View Post
                      Ground 1 does not apply as you do not want to live there.
                      The landlord doesn't have to want to live there now. Its sufficient to have lived there previously.

                      Comment


                        #12
                        Originally posted by DPT57 View Post

                        The landlord doesn't have to want to live there now. Its sufficient to have lived there previously.
                        No evidence has been supplied that the LL has previously lived there.

                        The "ground 1" quote at #6 may have intended to say so, but does not appear to me to meet the requirement of Ground 1
                        Not later than the beginning of the tenancy the landlord gave notice in writing to the tenant that possession might be recovered on this ground
                        It appears that someone has inserted a mangled version of the Ground 1 wording, rather than giving notice that possession might be recovered on that ground.

                        It is the "; or" that causes problems with this being appropriate notice.

                        Comment


                          #13
                          Yes, it is a bit unclear, although it is repeated as "the landlord normally lives there" under their "Ground 2". I'm afraid I have no experience of what standard of evidence is required to convince a judge that the prior notice was served, but if I were the OP, I would certainly be giving it a go. The judge also has discretion to waive the requirement and might be inclined to in this case.

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