A break clause in tenancy agreements can make ending a tenancy early easier for landlords.
Although government policy set them to one side during the COVID-19 pandemic, they offer a pathway to regaining a rental home that is often quicker and cheaper than going to court.
During the pandemic, court delays and extended notice periods have seen the average time to evict a tenant rise to 51 weeks, says research from letting agents Benham & Reeves.
A negotiated settlement through a break clause often helps save money.
The same research revealed that the cost of evicting a tenant averages £35,000, including legal costs, rent arrears and the cost of refurbishing a poorly treated rented home.
What is a break clause?
A break clause in a tenancy agreement allows the landlord or tenant to end a fixed-term contract before the fixed term runs out.
Not every tenancy agreement has a break clause, so it’s wise to check the contract before acting.
The key break clause information to look for in a tenancy agreement is:
- When a landlord can serve notice to quit
- How much notice the landlord should give
The wording will be something like: “This agreement can be ended by the landlord or a tenant giving two months’ notice in writing to expire at any time after six months after the start of this agreement”.
The wording of this break clause means the landlord or tenant can give notice when they wish, but the earliest date the tenancy can end is after six months.
Every tenancy agreement is different, so the break clause could be in any section about giving notice or ending a tenancy early.
If the contract has a break clause, make sure the wording is precise and without ambiguity.
How a break clause works
If the tenancy agreement names more than one renter, each tenant must agree to give notice unless the contract says different.
Housing law allows landlords to give notice in two ways:
- As a Section 21 no-fault eviction, which means the landlord does not have to give a reason for asking a tenant to leave.
- As a Section 8 eviction, which gives several grounds a landlord can cite for evicting a tenant
The section number refer to the Housing Act 1988, as amended by the Housing Act 1996.
Try negotiating if there’s no break clause
If the tenancy agreement has no break clause, the sensible way forward is to negotiate with the tenant.
Neither side can end a tenancy agreement early even if their circumstances have changed or problems have emerged at the property.
Try to keep to a written exchange that is polite and business-like.
Send an email to the tenant explaining:
- Why you want the property back
- The timescale you want to work to
Surrendering a tenancy
When a tenant gives up a rented home early, this is called ‘surrendering’ a tenancy.
Even though the tenant leaves the contract early, they are still liable to pay rent until the end of the tenancy agreement.
The landlord or tenant can find another tenant to take their place. However, as soon as that contract starts, the other tenancy agreement ends.
Sweetening the deal
Either side can sweeten the deal when negotiating the early end of a tenancy agreement.
For example, a tenant can overlook an unprotected deposit or incomplete repairs, or a landlord can write-off rent arrears.
If the terms are reasonable and allow a quicker repossession of the property, landlords may find striking a deal easier and cheaper than following the eviction process through the courts.
Just make sure any terms are in writing and signed and dated by all the signatories of the tenancy agreement.
Sticking to the law
During the coronavirus pandemic, tenancy agreement notice periods have altered with government policy in England, Scotland and Wales.
Government notice periods supersede any timescales laid down in tenancy agreements.
For the latest information about eviction notice periods, follow these links:
Break Clauses – A Landlord’s Guide FAQ
What happens if my tenancy agreement has no break clause?
If no break clause exists, a landlord can only end the tenancy agreement if the tenant has broken the contract terms. To terminate the agreement, the landlord must issue a Section 8 notice stating why the tenancy is ending.
What happens if the tenant leaves without notice?
The tenant can leave whenever they like, but they must pay the rent until the end of the contract or help find another tenant who will take over the property. If they don’t, the landlord can go to court to recover any unpaid rent.
Do all tenancy agreements have a break clause?
No. Not all tenancy agreements have break clauses. The notable exception is a six-month fixed-term agreement, which needs no break clause.
The tenant won’t go; what do I do?
Landlords must follow the law, which means no harassment or illegal evictions.
The only options a landlord has if a tenant does not agree to leave early are:
- Wait until the fixed term ends and let the tenant leave
- Negotiate a departure
How do I find a model tenancy agreement?
The Ministry of Housing publishes a free model tenancy agreement template online. The template is regularly updated and includes several break clause examples.