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JSQ
29-11-2006, 11:36 AM
Hi,

It seems to be quite common practice to put a "6 month break clause" into an AST. I'm wondering why a landlord would want to do this, instead of simply having an AST with a fixed term of 6 months, particularly as it's been argued that a 'break clause' is often problematic to legally invoke? The only reason I can think of is that it makes it easier for a letting agent to take 12 months commission upfront -or am I missing something?

P.Pilcher
29-11-2006, 12:04 PM
Our board experts frequently refer to the difficulty of writing legally enforceable break clauses, and then the difficulty that landlords face when they try to use them. You are probably right. Many agents also adopt the practice of issuing a 6 month AST with a section 21 notice to ensure that it will end after the six months. Two months before this point, they write to the tenants offering them a renewal of the AST, for a renewal fee of course. In practice, due to the statutory periodic tenancy legislation, this is totally unnecessary unless the tenant requires a further 6 months security of tenure for some reason. These agents merely do this to make more money, claiming that it is "standard practice"

P.P.

Poppy
29-11-2006, 12:06 PM
There is no point in having a break clause for the landlord's use. It's not enforceable. Better to have a shorter fixed term of 6 months and allow the tenancy to become a statutory periodic tenancy.

JSQ
29-11-2006, 12:41 PM
Well I'm still pretty new to the game and will certainly be using a 6 month AST for future tenants.

For the time being though, I have a problem tenant in place on a 12 month AST with 6 month break clause. I initially thought I'd need to use an S21 to invoke the clause but was advised elsewhere on this forum that just a 'plain english' letter from we would be the correct way to go. Would you agree with that?

If the break clause fails, by this point, I anticipate being able to issue an S8 due to 2 months rent arrears anyway.

Thanks very much for the advice -this forum is amazingly helpful I must say.

P.Pilcher
29-11-2006, 12:52 PM
I quote a district judge when I did a similar thing:
"I am prepared to accept your letter as fulfilling the requirements to give your tenant the required two month notice period, however I cannot guarantee that my colleagues will do the same."

P.P.

Poppy
29-11-2006, 12:54 PM
You will not be successful in trying to bring about s21 proceedings against a tenant during the fixed term unless they are in breach of the contract.

You may try obtaining possession through the s8 route for persistent arrears but this is dependent on the judge's discretion.

As a last resort (first resort if you want to cut to the chase) you could try negotiating to pay the tenants to move out and not chase for arrears IF they agree to terminate the tenancy in writing, vacate the property and return the keys on a date of your choosing.

JSQ
29-11-2006, 13:09 PM
Ok, well it sounds like a plain letter is the way to go (of course with no certainty that it will work).

With regards to the S8, the situation is that one tenant is paying their half of the rent and the other has missed two months now. If they miss a further two months, which I feel is almost a certainty, then there will be two months total arrears so I plan to issue an S8 at that point.

Do you see any problem with issueing an S8 alongside the notice to excercise the break clause?

If they do go at the time of the break clause I then plan to persue the arrears in the small claims court as I am confident that the tenant actually HAS got the money to pay and at a guess, is the sort of person who would respond to a CCJ. Does this sound like the right general strategy?

P.Pilcher
29-11-2006, 13:14 PM
No problem at all.

P.P.

JSQ
29-11-2006, 13:24 PM
Thanks very much. I have a horrible feeling that I will be posting further on this matter as it unfolds in the coming weeks!