What is a break clause?
What is a break clause?
Getting your hands on your new tenancy agreement for the first time can be exciting! You’re at the start of a new home, maybe even a new chapter in your life,. Once you start to read through it, though, you might notice there’s a lot of legal speak going on!
To help you sift through some of the jargon this blog is here to give you the lowdown on one of the terms you might see floating around: the break clause. So stick around and you’ll be an expert in no time!
What does break clause mean?
When you hear the term “break clause” it might sound like you’re about to go through a break-up of some kind, and that’s actually not too far from the truth. So what is a break clause in a lease? A break clause is a term in a tenancy agreement that can allow the tenant or the landlord (or both!) to end the tenancy agreement early.
Break clauses are only used for fixed-term tenancies, and will generally outline a point in the tenancy at which either the tenant or landlord can choose for the tenancy to end ahead of the pre-determined date. So, for example, if you had a 12-month tenancy agreement, at the 6-month mark you could decide to end the tenancy if it has a break clause. It’s worth noting that break clauses often come with a requirement of how much notice to give.
The notice period to activate a break clause in a tenancy agreement is often 2 months. So, if you had a 6-month break clause in your tenancy agreement, you’d likely need to let your landlord know you’re planning on ending things 4 months into your tenancy.
Quick note: The break clause doesn’t work the same way as an ejection button - you won’t be able to activate it and just leave the property. Even after you’ve enacted it you’ll still need to fulfil the other terms of your tenancy agreement - most importantly that means you’ll still need to pay rent!
Why would you use a break clause?
Now we’ve answered what is a break clause in a tenancy agreement, the next question is why would you actually use it. A typical break clause in a tenancy agreement will typically allow both the landlord and the tenant to use it (if it doesn’t specify it’s just for the tenant!), and they’ll tend to have different reasons as to why they would want to end a fixed-term tenancy early.
For the tenant, the break clause gives them a bit of added flexibility. With a break clause, it means that if something changes so they no longer want (or need!) to live at the property, they’ll be able to leave without paying rent for the entire fixed-term. This could be if they have a change of circumstances, they decide the landlord isn’t a good fit for them, or even if they just change their mind.
For the landlord, the big advantage of the break clause is that it essentially gives them more time to vet their new tenant. A landlord might choose to include a break clause in a tenancy agreement if they’re unsure about how suitable a tenant might be and want to make sure they have an out. So if their new tenant is difficult to communicate with, isn’t paying rent on time, or not taking care of the property, they could decide to use the break clause.
How common are break clauses?
It isn’t a requirement to include a break clause in a tenancy agreement, so as a result, standard tenancy agreements don’t often include them. As a tenant, you’ll usually need to ask your landlord to include a break clause in the agreement if you’d like one. It’s worth keeping in mind, though, that if they add one it might also mean they’ll be able to end the tenancy early too.
If you’re not sure whether your tenancy agreement has a break clause in it or not it’s worth double-checking, and then asking your landlord if you’re still unsure. Sometimes they won’t directly be referred to as “break clauses” but might have words referring to giving notice or terminating early.
If you do find a break clause in your tenancy agreement, it will typically include:
- What point in the fixed-term the break clause can be activated
- How much notice needs to be given
- How to provide notice to your landlord
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How does a break clause work?
If you’ve decided you want to use the break clause in your tenancy agreement, what happens next? The first thing to do is check your tenancy agreement - what are the terms of the break clause? How much notice do you need to give? When will it come into effect? How do you need to let your landlord know you’re going to use it?
Once you know this, the next step is to give your landlord notice. You’ll probably need to do this in writing, but it should be specified in your tenancy agreement, so check there if you’re in doubt!
If your landlord uses the break clause it’s important to note that it will likely only end the fixed-term tenancy agreement that you have with them. After this it will be replaced by a statutory periodic assured shorthold tenancy. If they don’t have grounds to evict you, in order for them to end this and regain possession of their property they’ll need to file a Section 21. If you want more details on the ins and outs of the legalities of break clauses, a good place to start is Shelter Legal England.
A few final tips…
A break clause allows you to end your tenancy early, at the point that your tenancy agreement states. You’re not going to be able to leave immediately, and usually won’t be able to leave before then!
If you’ve had a major change in your circumstances and need to move out even before when the break clause states, probably the best thing you can do is just talk to your landlord about it. Be honest, give them all the details, and then it’s up to them.
Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.