Why do you need a Break Clause?

I have had two calls this week about break clauses in Assured Shorthold Tenancy Agreements.

In both the situations there was a fixed term of 12 months with a break clause at 6 months into the tenancy. The Landlords wanted to exercise the break clause by issuing a section 21 notice, which their break clause allows.

The question is however, does the break clause stand up in Court. If the tenant stays in the property after the expiry of the Notice you will have to issue Court proceedings and ask a Judge to order possession. The Judge will then look at the break clause to see if it is valid. If the Judge is not happy with the clause you will not get possession.

Unfortunately this is one of those clauses that can be drafted and interpreted in many ways. If the break clause is clearly drafted and either equally fair to both parties or benefits the tenant more than the landlord you will have a better chance of getting possession. However if the clause is in the favour of the landlord it is very unlikely that it will be valid. Unfortunately when you have got to this stage you will have incurred a Court fee of £175 and possible Solicitors costs.

But why do you need a break clause - why not have an Assured Shorthold Tenancy for 6 months. If you want to renew the tenancy after this period you can.

Rebecca Brough is a Solicitor at Fidler & Pepper who deals with Residential Landlords on a daily basis. Rebecca offers landlords requiring legal help a Free initial consultation.

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