Advice needed on break clauses and staying beyond them

[screamopilla]

A bit of background on this as its a bit complex:

Our Joint tenancy lease started 29th August 2009, with 4 of us sharing the house. The contract was a standard 1 year assured shorthold tenancy (AST) with 6 month break clause as below:

Tenant Break Clause:
86. The Tenant may bring the tenancy to an end at any time before the expiry of the fixed term (but not with six months of the commencement date) by giving the Landlord at least two month's notice before the rent due date.
87. The notice will not apply if, before this contract ends, you withdraw the notice and the Landlord does not object to the withdrawal.
88. The Landlord may end the tenancy before the contract term ends if you break any condition of the tenancy.
89. You may end this contract by giving your landlord at least two months notice after the six month break clause. The address for the tenant to serve Notices on the Landlord is:
(address)
You must also inform the Agent. The address is on the front of this contract.


In late November and again in January we received notice of court proceedings to re-possess the house due to mortgage arrears. In attending the court hearing, which the landlady did not attend, we found out that her mortgage is not buy-to-let, and the advice we received from the CAB was that this would give us very little protection if the house was taken by the mortgage company. Therefore we decided to draft a break-clause letter to cover ourselves and we sent it to the landlady’s given address and the introductory estate agents as per the contract. The letter was dated 27th January 2010.

On May 1st one of my housemates moves out as per the break-clause letter as he wasn't happy with the Landlady, the house or the situation we'd been through. Me and the other two decided to stay in the house with the verbal agreement of the landlady as she eventually paid off her mortgage arrears, although we still have plans to move out before the expiry of the original term. Now one of my remaining housemates wants to move out at the end of the next month and has sent a further letter giving one months notice that he will move out on the understanding that we have now entered a "periodic tenancy". The landlady has said that she wants two months notice "as per the contract". When we speak to her about it she accepts a break clause letter was submitted but only applies for the housemate that moved out first and but does not accept it for the rest of us.

So, some questions for you all:

Has the break clause been served correctly?

If so, does the tenancy after this period automatically become a periodic tenancy with one months notice to leave applying?

If not, what is the best plan of action for remaining tenants? Shall we re-serve the break-clause asap?

Can the break-clause only be served once or can it be re-served?

Because 3 of us stayed on in the house after May 1st could this be taken to effectively constitute going back on the break clause?

If this is the case, does the Landlady have legal grounds to chase us for unpaid rent in relation to the first tenant who moved out?

And does the landlady have to agree in writing that the break clause has been served correctly?

Cheers!

[westminster]

The landlady has said that she wants two months notice "as per the contract". When we speak to her about it she accepts a break clause letter was submitted but only applies for the housemate that moved out first and but does not accept it for the rest of us.

Firstly, you (and your LL) need to understand that T1+T2+T3+T4 who signed the joint AST dated August 2009 are, together, ‘the Tenant’, (and each of you is both individually and jointly liable for the whole rent, not 25% shares of it. Legally, there is no such thing as a ‘share’ of the rent).

So it is nonsense for the LL to say she ‘accepts’ notice from a quarter of ‘the Tenant’ but that three-quarters of the Tenant is still bound by the original AST.

Either the original AST is still ongoing and all four of you are bound by it, OR the AST ended on 1st May when T4 moved out, and a new, oral, tenancy was created as from 2nd May with T1+T2+T3 as ‘the Tenant’.

The break clause isn’t clear as to how it can be exercised; it says ‘by giving the Landlord at least two month's notice before the rent due date’ (and ‘before the rent due date’ is ambiguous to say the least) but also ‘by giving your landlord at least two months notice after the six month break clause’.

You say that the letter was dated 27th January and T4 moved out ‘as per the break clause letter’ on 1st May. Does that mean you gave over three months’ notice, to expire on 1st May? Was the letter signed by all of you?

……Me and the other two decided to stay in the house with the verbal agreement of the landlady

What exactly was agreed? Was rent discussed; was a new, lower, rent agreed? Is LL actually chasing you for T4's unpaid rent, or are you just concerned she might?

I realize this doesn't answer your questions, but I hope it helps to clarify what the actual problem is. And if you can give some more information, it might make the situation clearer and enable us to advise you further.

[screamopilla]

Hi westminister, thanks for the reply.

You say that the letter was dated 27th January and T4 moved out ‘as per the break clause letter’ on 1st May. Does that mean you gave over three months’ notice, to expire on 1st May? Was the letter signed by all of you?

We gave over 3 months notice yes, to expire on the 1st May. However we did not sign the letter - it had each of our names typed at the bottom. Where it says two months notice after the 6 month break clause - does this mean notice should have been served on the 27th February rather than in January? Would the lack of signatures on the letter make it invalid?

What exactly was agreed? Was rent discussed; was a new, lower, rent agreed? Is LL actually chasing you for T4's unpaid rent, or are you just concerned she might?

She came round and we had a meeting to discuss the situation, although nothing was noted, written down or signed. She agreed with us that we wouldn't have to "make up" the 4th tenants rent and would continue to pay what we were paying before. She also said that she wanted two months notice if we were going to move out, and in the mean-time she agreed she would try to find another short-term tenant.
I am worried that the landlady be backed up by the law when she says the break-clause has not been served correctly and will chase us all for the missing rent when the AST was originally due to expire. She is definitely the sort of person who will do it if she can and we have had alot of trouble with her (abusive phone calls, lying about letters, calls and conversations we have sent/had, visits by her with little or no notice, cowboy builders doing work in the house with little or no notice, inventory and deposit details not provided until 3 months after moving in etc).

I realise that this has been handled pretty badly on both sides but I want to make sure I never get into this sort of situation again!

[westminster]

We gave over 3 months notice yes, to expire on the 1st May. However we did not sign the letter - it had each of our names typed at the bottom. Where it says two months notice after the 6 month break clause - does this mean notice should have been served on the 27th February rather than in January?

As I said, the break clause is unclear. #86 says you can bring the tenancy to an end 'at any time' after six months but #89 does seem to say you can't serve notice till after six months. IANAL, but I think the likelihood is that the January notice was valid because the notice ended just over 8 months into the tenancy, i.e. 6 months + at least 2 months' notice (so that sort of covers the ambiguity over when you can do it), and what is not ambiguous is that T can end the tenancy before the end of the fixed term by giving two months' notice.

Would the lack of signatures on the letter make it invalid?

I don't think so; my question was oriented more towards whether all four Ts (i.e. 'the Tenant') were named on the notice.

She came round and we had a meeting to discuss the situation, although nothing was noted, written down or signed. She agreed with us that we wouldn't have to "make up" the 4th tenants rent and would continue to pay what we were paying before.

By this I assume you mean she agreed that the rent from that point on would be 75% of what it had been before? Were all three of you at this discussion, and therefore able to confirm what was agreed? An oral contract is just as valid as a written one, but obviously harder to prove - so it helps if it's not just one person's word against another's.

She also said that she wanted two months notice if we were going to move out.

So you agreed to give two months' notice, apparently in the context of a new orally agreed contract. Whether the original AST is still ongoing, or whether there is a new orally agreed tenancy, you have still agreed to give two months' notice (except, IF the original AST is still ongoing, you wouldn't have to give any notice to leave at the end of the fixed term).

I am worried that the landlady be backed up by the law when she says the break-clause has not been served correctly and will chase us all for the missing rent when the AST was originally due to expire.

As I said, the LL's position, that she accepted notice from a quarter of the tenant, and is holding three-quarters of the tenant to the original agreement is nonsense and insupportable. Especially when she has apparently agreed a new oral tenancy with three joint Ts at a reduced rent. The legal situation is far from clear, and I cannot give you any definite answer (with any luck, one of the legally qualified forum members will be able to shed some more light). However, I do know that any assertion by the LL in terms of incorrect service of notice should be disregarded, as she clearly hasn't a clue about the legal position (or her rights of access).

The easiest way forward would be to give two months' notice. I'm not sure you'd get away with less unless you all lied and said you didn't agree to two months' notice on 1st/2nd May, or whenever the discussion took place.

There are two kinds of periodic tenancy; 1) the statutory kind, which arise automatically after the end of the fixed term, and have statutory notice periods (one month at least from T to LL, to expire at the end of a rental period), 2) the contractual kind, which are created by mutual agreement of both parties (in which case, any notice provisions can be agreed and they will override the default, statutory notice provisions).

we have had alot of trouble with her (abusive phone calls, lying about letters, calls and conversations we have sent/had, visits by her with little or no notice, cowboy builders doing work in the house with little or no notice

You have many rights as a tenant including being given reasonable notice of visits, and the right to 'quiet enjoyment'. The sort of behaviour you describe is unacceptable. If it ever happens again, post on the forum, or get advice from Shelter. You can also complain to the private tenancies officer at the local council if the LL is seriously harassing you.

I realise that this has been handled pretty badly on both sides but I want to make sure I never get into this sort of situation again!

Make it a rule always to get things in writing - doesn't have to be typed or witnessed to be valid evidence. Keep copies of letters received and sent. Always send letters/notices with proof of posting. Keep it all in a file. Keep old tenancy agreements too.

[screamopilla]

Thanks for your advice - I agree the situation is far from clear and can be interpreted in various ways depending on your view. I have been told various things by various people including that the notice we served was invalid and we are still bound by the AST!

To answer some of your questions:

By this I assume you mean she agreed that the rent from that point on would be 75% of what it had been before? Were all three of you at this discussion, and therefore able to confirm what was agreed? An oral contract is just as valid as a written one, but obviously harder to prove - so it helps if it's not just one person's word against another's.

Yes, this is what she agreed, and yes all three remaining tenants were there when the discussion took place.

So you agreed to give two months' notice, apparently in the context of a new orally agreed contract. Whether the original AST is still ongoing, or whether there is a new orally agreed tenancy, you have still agreed to give two months' notice (except, IF the original AST is still ongoing, you wouldn't have to give any notice to leave at the end of the fixed term).

We agreed two months notice, and I have reminded the tenant who now wants to move out next month of this. He may have to pay a extra months rent, or he might just not pay it and not dispute the deposit instead, but as it was under a joint tenancy this will impact on the rest of us. Is it worth considering withholding rent and telling the LL she can have our deposit? I think we will struggle to get it back.

[westminster]

We agreed two months notice, and I have reminded the tenant who now wants to move out next month of this. He may have to pay a extra months rent, or he might just not pay it and not dispute the deposit instead, but as it was under a joint tenancy this will impact on the rest of us. Is it worth considering withholding rent and telling the LL she can have our deposit? I think we will struggle to get it back.

Is the deposit protected by a scheme? (I've a feeling the answer is no...)

[screamopilla]

Yes it is - the landlady provided details after we chased her up and it is registered on mydeposits - I haven't been able to query the amount yet though.

[westminster]

Yes it is - the landlady provided details after we chased her up and it is registered on mydeposits - I haven't been able to query the amount yet though.

I would check that it is registered with mydeposits.
http://mydeposits.co.uk/tenants/tena...tprotected.htm


Assuming it is, then, if the LL tries to make unfair deductions, what you do is raise a dispute with the scheme, and the LL will have to lodge the disputed amount with mydeposits pending resolution of the dispute.
http://mydeposits.co.uk/tenants/tena...s3-dispute.htm

[screamopilla]

I have and it is - although it does not give the amount.

The situation as of today is that we have sent the LL another letter confirming that the 3 remaining tenants will be moving out at the end of July. This is 2 months as per the verbal agreement. I was very careful to reference this agreement and the previous letter we sent enacting the break-clause (which I attached) as I do not want the latest letter to be miscontrued in anyway. I hope this resolves the situation, but my pessimistic side is prepared for the worst!

Thanks for your advice.