What is a break clause?
A break clause is a provision in a fixed-term tenancy agreement that allows either the tenant or the landlord (or both, depending on the contract) to end the tenancy early before the fixed term expires, without incurring penalties.
As a general rule, break clauses are best avoided as they are prone to misinterpretation and often ineffective when the landlord tries to enforce them. For that reason we do not include example wording. Instead, it is recommended that your AST has a relatively short minimum term of six months. After that, your tenancy can continue to roll on monthly, allowing both parties to terminate the agreement by serving appropriate notice as set out in the agreement.
Key points about a break clause:
- Timing: The break clause usually specifies when it can be exercised, such as after six months of a 12-month tenancy, and may require a notice period (e.g., two months).
- Notice requirement: The party invoking the break clause must typically give written notice, as specified in the tenancy agreement. If it's not clear, the default legal notice period is usually two months for landlords and one month for tenants.
- Mutual agreement: Some break clauses can only be triggered by both parties, while others allow either the tenant or the landlord to act independently.
- Conditions: The break clause may come with conditions, such as the tenant needing to have paid rent on time or fulfilled other contractual obligations.
- Section 21 notice: For landlords, exercising a break clause might still require following proper procedures, like serving a Section 21 notice to legally end the tenancy.
A break clause offers flexibility within a fixed-term tenancy, allowing for early termination if circumstances change for either party.
Last reviewed 13th December 2024