Residential Break clauses in tenancy agreements are more common in commercial property leases, but occasionally residential tenancies, usually Assured Shorthold Tenancies for residential lettings, contain a break clause.
A residential break clauses gives the tenant, and sometimes the landlord as well, an option to give notice (usually 2 months notice) during the fixed – term of the tenancy, and thereby end the tenancy early.
Obviously, there are pros and cons for both parties in a Residential Break Clauses. Although the break clause gives the tenant the option to leave early if circumstances change, where there is a landlords break as well, the tenant has less long-term security.
The assured shorthold tenancy gives the tenant the right to remain in occupation for a minimum of 6 months, so break clauses would not apply for ASTs of 6 months duration – these are the most common types of AST.
However, with period in excess of six months, say 9, 12, 18 or 24 months, a break clause may be included in the tenancy agreement.
Conditional and Unconditional Break Clauses
To be fully enforceable in law, break clauses need careful drafting with a high degree of legal expertise – these agreements should be drafted by a solicitors or barrister, or obtained from a known reliable published source.
Break clauses may be unconditional, in which case there is no requirement on either party to have met any conditions, except correctly serving the 2 month’s notice.
Alternatively, for a break clause to be effective and enforceable, there may be certain onerous conditions attached. A common one here is that the tenant has fulfilled all the conditions of the tenancy agreement.
This is quite onerous as it is almost always possible for a landlord to show that some condition, however minor, has not been met, thus rendering the break clause ineffective.
Legal Complexity of Break Clauses
In view of the potential legal complexity concerning break clauses in agreements it is sometimes far simpler to use a shorter tenancy – say 6 months – and renew – or allow the tenancy to become periodic, as required.