AST break clause?

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  • AST break clause?

    Hi

    I am currently renting a place under a 12 month Assured Shorthold Tenancy and wish to leave the property 4 months early. I figured my first port of call was to email the landlord asking if they would agree to a mutual surrender of the contract, but received a blunt reply to the effect that we'd signed for 12 months and that's how long we had to stay.

    Since then, I've looked over the contract a few times and I think we have a break clause, but the people I've asked for advice (none of them professionals) have had varying opinions, so I was wondering if anyone here could shed more light on the situation. The two parts of the contract that seem most pertinent, both towards the end of the document under the heading "General" are as follows (with my emphasis on the important parts):

    2. This agreement and the documents referred to in it contain the whole agreement between the parties relating the the transaction contemplated by this agreement and supersede all previous agreements between parties relating to the transaction. The term must be for a fixed period of not less than 12 months. If the Tenant remains in possession after the expiry of the Term and no new tenancy comes into being, the Tenant becomes entitled to a statutory periodic tenancy which the Landlord can bring to an end after serving on the Tenant not less than 1 months notice stating that the Landlord requires possession of the premises.

    [...]

    7. The Tenant may determine the tenancy hereby created by giving to the Landlord not less than one month prior notice in writing to expire at the end of a calendar month and on the expiration of such notice the tenancy shall cease and the Tenant shall give up vacant possession of the Property but without prejudice to the rights and remedies of either party against the other in respect of any antecedent claim or breach of obligation.
    So my question is: does 7 count as a break clause that allows me to leave before the 'fixed period of not less than 12 months' by giving a month's notice, or does that phrase in 2 overrule my right to leave before the 12 months is up? I've been going round in circles and am thoroughly confused now, so I would be incredibly grateful for any insight or advice! Thanks!

  • #2
    Sorry, section 7 just clarifies your obligations under the 1988 Housing Act. The 12 months still stands. If you wish to leave at the end of the 12 months, you need give no notice (though it would be polite). If you stay a day over, then you have to give one months notice, ending on the same day of the month as your original tenancy agreement.

    Comment


    • #3
      Originally posted by Snorkerz View Post
      Sorry, section 7 just clarifies your obligations under the 1988 Housing Act. The 12 months still stands.
      I do not agree. Clause 7 does seem to be a break-clause that T can use so as to terminate the tenancy even during the fixed term.
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

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      • #4
        Originally posted by jeffrey View Post
        I do not agree. Clause 7 does seem to be a break-clause that T can use so as to terminate the tenancy even during the fixed term.
        OP - I bow to Jeffreys experience, having now found this link on LZ where the same standard AST seems to have been used and a break clause was claimed by the landlord.

        http://www.landlordzone.co.uk/forums...ad.php?p=76682

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        • #5
          The words in bold in clause 2 are rather odd. Whatever they are supposed to mean I agree with Jeffrey that clause 7 is a break clause and (hang out the flags!) one we can make sense of.

          Comment


          • #6
            Originally posted by Lawcruncher View Post
            The words in bold in clause 2 are rather odd.
            I agree; why did anyone consider them necessary at all?
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


            • #7
              Thanks for the advice guys, it's been really helpful so far. The only concern we still have is whether or not the lack of a stipulation regarding when the clause can be used (eg. "after six months") could be a problem/give the landlord grounds to argue it's not a break clause after all. This seems to be the main basis for most people's doubts when we've asked. Any thoughts?

              Comment


              • #8
                Originally posted by majorlook View Post
                Thanks for the advice guys, it's been really helpful so far. The only concern we still have is whether or not the lack of a stipulation regarding when the clause can be used (eg. "after six months") could be a problem/give the landlord grounds to argue it's not a break clause after all. This seems to be the main basis for most people's doubts when we've asked. Any thoughts?
                While that was my original thinking, The link in my earlier post includes a quote from a judge that states this exact clause (7) IS a break clause.

                Comment


                • #9
                  Originally posted by Snorkerz View Post
                  While that was my original thinking, The link in my earlier post includes a quote from a judge that states this exact clause (7) IS a break clause.
                  However, the most substantial difference, despite the almost identical wording, is that the clause in your link (which was really helpful, I'd skimmed that post earlier but missed the similarity, so thanks!) is that the one the judge upheld as a break clause includes a 6 month stipulation. Does it need the 6 month part to make it a break clause?

                  I know it's required when the break clause applies to both T and LL as it has to cover the T's rights in an AST, but it's hard to find info for the requirements for a break clause that is only applicable to T (to be honest it seems weird that they even included it, but given the similarity to the other clause you mentioned perhaps they just used a template from somewhere).

                  Sorry if I'm pestering you guys about nothing, we just don't want to try to give notice to our landlord only for them to turn around and tell us it's not a break clause, because that could really turn things sour for the next 6 months! We really appreciate all the advice so far though, it's helped clarify a lot.

                  Comment


                  • #10
                    The way to put it to your landlord is this: If clause 7 does not mean what it clearly says, what does it mean and if it does not mean anything what is it in the agreement for?

                    Comment


                    • #11
                      2. This agreement and the documents referred to in it contain the whole agreement between the parties relating the the transaction contemplated by this agreement and supersede all previous agreements between parties relating to the transaction. The term must be for a fixed period of not less than 12 months. If the Tenant remains in possession after the expiry of the Term and no new tenancy comes into being, the Tenant becomes entitled to a statutory periodic tenancy which the Landlord can bring to an end after serving on the Tenant not less than 1 months notice stating that the Landlord requires possession of the premises.
                      Has anybody noticed the bit I've high-lighted above, it's a mistake obviously. Does it have any other consequences for the rest of the contract? I.e. Invalidate it?
                      I offer no guarantee that anything I say is correct. wysiwyg

                      Comment


                      • #12
                        Originally posted by jta View Post
                        Has anybody noticed the bit I've high-lighted above, it's a mistake obviously. Does it have any other consequences for the rest of the contract? I.e. Invalidate it?
                        Yes, I did spot it. There are several odd things in that clause. I do not think any of them invalidate the agreement.

                        This agreement and the documents referred to in it contain the whole agreement between the parties relating the the transaction contemplated by this agreement and supersede all previous agreements between parties relating to the transaction.

                        A "whole agreement" clause is a waste of time. Section 2 (1) of the Law of Property (Miscellaneous Provisions) Act 1989 says.

                        A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed...

                        It is a requirement therefore that the contract must contain the terms agreed. If it does not, there is no contract.

                        The term must be for a fixed period of not less than 12 months.

                        This just does not seem to fit in. The form is mandatory in expression. It is a bit like saying "The property must be 23 Acacia Avenue".

                        If the Tenant remains in possession after the expiry of the Term and no new tenancy comes into being, the Tenant becomes entitled to a statutory periodic tenancy...

                        If this is an AST then if the tenant remains in occupation a statutory periodic tenancy arises anyway. If it is not an AST then no statutory periodic tenancy arises and you cannot contract for a statutory periodic tenancy.

                        ...which the Landlord can bring to an end after serving on the Tenant not less than 1 months notice stating that the Landlord requires possession of the premises.

                        If it is an AST then clearly this is wrong. If it is not an AST then, ignoring that you have contracted for a statutory tenancy, I suppose it works.

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