Advice - What is a Break Clause?

Many people talk about Break Clauses but what exactly are they?

A break clause allows either a tenant or landlord to end a tenancy before the end of the fixed term. The amount of time before the end of tenancy will depend on specific clauses in the original tenancy agreement. Any notice to exercise a break clause will need to be put in writing, again in line with the service method specified in the tenancy agreement. 

For the avoidance of doubt, break clauses are agreed by the landlord and tenant before the tenancy starts and are put in the contract. Should either of their circumstances change they are legally able to end the agreement early, as long as the break clause notice is served correctly, and there are no breaches of the tenancy agreement. If a financial penalty has been negotiated then this will also need to have been stated in the tenancy agreement.

As a tenant, if you do not have a break clause and would like to leave your tenancy early you are normally liable to compensate the landlord, or allow the property to be marketed to find suitable replacement tenants and pay the costs incurred in doing so.

Break clauses are not automatically included in tenancy agreements. Many landlords prefer a fixed term to avoid having to find new tenants regularly and tenants often prefer to have additional security of tenaure to avoid the inevitable costs of moving reguarly. 

 

Alex Britchfield | Partner | Davies & Partners