- Tenancy agreement without a break clause
- When a tenant wants to leave a rental property
- Questions on ending a tenancy agreement early
Among the issues for property investors is having a tenant who wants to leave before the end of their contract, which may lead to some investors wondering what they can do.
Essentially, there are two issues for landlords in England and Wales to consider and they are:
- If there’s a break clause contained in the tenancy agreement, then the tenant will simply invoke it give you the relevant notice period
- Or, as the landlord, you can agree to end the tenancy early. We will explain later how to deal with this solution.
It also needs to be appreciated that if the tenancy agreement has come to an end, then the tenancy will automatically move onto rolling basis so a tenant can simply give notice with a tenancy ending letter that they are leaving.
If there is no break clause within the agreement and the landlord does not agree to their tenant leaving than the tenant will need to pay rent for entire tenancy under the agreement – or help find another tenant or pay for the process to take place.
Tenancy agreement without a break clause
One of the issues for tenants is that not all tenancy agreements will include a break clause.
However, there needs to be a balance because the tenant and landlord will need the same rights when it comes to terminating the agreement should there be no break clause clearly stated.
There’s also an issue should there be a clause for the landlord to finish the tenancy early, but there is no such clause for the tenant to do the same. This will contravene the provisions under the ‘unfair terms’ under the law.
It’s not unusual for the break clause to come with conditions, for example, the landlord or tenant may have a requirement to give a longer notice period or pay a specified fee if the clause is exercised.
When it comes to leaving a tenancy, a tenant should always try to negotiate with their landlord so they can come to a mutually acceptable way for ending the tenancy.
This may include a compromise so the tenant pays rent until a replacement tenant is found or offering to pay for the advertising costs to list the property with a letting agent.
When a tenant wants to leave a rental property
The bottom line when a tenant wants to leave a rental property – and if it’s a fixed term tenancy – then you need to check they have signed the tenancy contract and see how many weeks’ notice are stipulated.
If they pay rent and want to leave early, then you’ll need to check the break clause which may state the tenant needs to give one month’s notice.
This is usually from either side though the contract may also ask the tenant pays rent until new tenants are found and have signed a contract.
In some cases, you may need to take legal advice should a tenant leave the property before an agreed date because the tenant may be in breach of their legal contract.
Questions on ending a tenancy agreement early
There are some common questions on the subject of ending a tenancy agreement early, including:
Should I let my tenant leave early?
There is no straightforward answer to ‘Should I let my tenant leave early’ because a lot depends on what is stated in the tenancy agreement and your relationship with your tenant.
For example, can you recruit a new tenant quickly? And is there a break clause within the rental agreement that allows the tenant to leave early?
You’ll need to look at the break clause in the tenant agreement to see whether it could be considered as an unfair term under the Consumer Rights act 2015.
In many cases, it may be easier to accept a tenant’s request to leave early because spoiling what may have been a good relationship may lead to your property being damaged or rent not been paid in protest.
How can I get out of my tenancy agreement early?
If your tenancy agreement has a break clause then you should be able to get out of your tenancy agreement early before the fixed term tenancy ends.
It’s worth looking at whether there is a clause within the agreement to say that you can only leave early at the landlord’s discretion, which is considered to be an unfair term under the law. This means that there is an imbalance of rights between the landlord and the tenant.
Also, some landlords may say they can withhold the deposit should a tenant leave early but they would be wrong. The deposit should be held with a Government approved independent third party, so this will be difficult to do. If the landlord does threaten this action, then you need to contact the deposit holding service and explain your circumstances.
If the deposit has not been paid into a recognised protection scheme, then you need to report your landlord because there are financial penalties to pay for not placing the deposit for safekeeping.
Can I end a shorthold tenancy agreement early?
Since most renters in England and Wales will be using an assured shorthold tenancy agreement, you’ll need to check whether there is a break clause in the contract.
If so, you can use this or you can negotiate the surrender of the contract with your landlord.
If you do not end the tenancy using either of these routes, then you may remain liable for any rent payment that is due.
What happens when my 6 months tenancy agreement ends?
For any tenant wondering what happens when their six month tenancy agreement comes to an end, then there will be one of two solutions.
Usually, a six month tenancy is an assured shorthold agreement and when this end date is reached, you can simply leave the property. You may have to give the relevant notice period to do so and it’s always worthwhile checking. This may be stipulated too as the landlord will need to act to find a new tenant.
However, if there are no negotiations to agree a new contract, then you will be moved across to a ‘periodic tenancy’, which is also known as a ‘rolling tenancy’.
These are tenancy agreements with no specific end date and may suit some tenants if they do not want to be tied into a new fixed term contract.
A periodic tenancy will continue on the same terms and you will be paying the same rent as normal and depending on how often you pay your rent, it will roll on either weekly or monthly.
How to get out of a tenancy agreement
The question of how to get out of a tenancy agreement will depend on the type of tenancy contract you have signed and how long you have lived in the property.
While most tenancies will end automatically when you leave by the fixed term’s last day, you should check how much notice you need to give under the contract terms for the tenancy end letter.
Otherwise, to end a contract, you will either need to negotiate with your landlord – and they may not agree for you to leave before it ends, or use the break clause. Most agreements will have a break clause to benefit both the tenant and landlord, so check your contract carefully to see how much notice you need to give under this clause.
What is a rolling tenancy agreement?
A rolling tenancy agreement, also known as a periodic tenancy, is when an assured shorthold tenancy or a fixed term contract has come to an end. If you remain living in the rental property, then your tenancy agreement will automatically become a rolling tenancy agreement on the first day after the fixed term contract ends.
While these rolling tenancies will suit most tenants, you need to understand that the rent will remain the same, and the contract terms are also unchanged.
You’ll still need to give the relevant notice period to leave, so check your rental agreement to see how long this will be because you cannot simply pack your bags and leave the property without giving the landlord notice.
Also, a landlord cannot increase the rent without your agreement under the terms of a rolling tenancy.
What is a fixed term tenancy?
Most private tenancies will be assured shorthold tenancies and these will run for a fixed length of six months or sometimes 12 months. The end date will be clearly stated in the contract that you sign.
When your six month fixed term tenancy contract ends, you can either renew for a new fixed term period or move onto a rolling or periodic tenancy.
Alternatively, you can leave the tenancy and some contracts will stipulate that you will still need to give notice if you’re planning to leave a rental property on the contract’s last day.
Again, check the contract thoroughly to see how much notice you will need to give.