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screamopilla

Advice Needed On Break Clauses And Staying Beyond Them

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A bit of background on this as its a bit complex:

Our Joint tenancy lease started 29th August 2009, with 4 of us sharing the house. The contract was a standard 1 year assured shorthold tenancy (AST) with 6 month break clause as below:

Tenant Break Clause:

86. The Tenant may bring the tenancy to an end at any time before the expiry of the fixed term (but not with six months of the commencement date) by giving the Landlord at least two month's notice before the rent due date.

87. The notice will not apply if, before this contract ends, you withdraw the notice and the Landlord does not object to the withdrawal.

88. The Landlord may end the tenancy before the contract term ends if you break any condition of the tenancy.

89. You may end this contract by giving your landlord at least two months notice after the six month break clause. The address for the tenant to serve Notices on the Landlord is:

(address)

You must also inform the Agent. The address is on the front of this contract.

In late November and again in January we received notice of court proceedings to re-possess the house due to mortgage arrears. In attending the court hearing, which the landlady did not attend, we found out that her mortgage is not buy-to-let, and the advice we received from the CAB was that this would give us very little protection if the house was taken by the mortgage company. Therefore we decided to draft a break-clause letter to cover ourselves and we sent it to the landlady’s given address and the introductory estate agents as per the contract. The letter was dated 27th January 2010.

On May 1st one of my housemates moves out as per the break-clause letter as he wasn't happy with the Landlady, the house or the situation we'd been through. Me and the other two decided to stay in the house with the verbal agreement of the landlady as she eventually paid off her mortgage arrears, although we still have plans to move out before the expiry of the original term. Now one of my remaining housemates wants to move out at the end of the next month and has sent a further letter giving one months notice that he will move out on the understanding that we have now entered a "periodic tenancy". The landlady has said that she wants two months notice "as per the contract". When we speak to her about it she accepts a break clause letter was submitted but only applies for the housemate that moved out first and but does not accept it for the rest of us.

So, some questions for you all:

Has the break clause been served correctly?

If so, does the tenancy after this period automatically become a periodic tenancy with one months notice to leave applying?

If not, what is the best plan of action for remaining tenants? Shall we re-serve the break-clause asap?

Can the break-clause only be served once or can it be re-served?

Because 3 of us stayed on in the house after May 1st could this be taken to effectively constitute going back on the break clause?

If this is the case, does the Landlady have legal grounds to chase us for unpaid rent in relation to the first tenant who moved out?

And does the landlady have to agree in writing that the break clause has been served correctly?

Cheers!

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A bit of background on this as its a bit complex:

Our Joint tenancy lease started 29th August 2009, with 4 of us sharing the house. The contract was a standard 1 year assured shorthold tenancy (AST) with 6 month break clause as below:

Tenant Break Clause:

86. The Tenant may bring the tenancy to an end at any time before the expiry of the fixed term (but not with six months of the commencement date) by giving the Landlord at least two month's notice before the rent due date.

87. The notice will not apply if, before this contract ends, you withdraw the notice and the Landlord does not object to the withdrawal.

88. The Landlord may end the tenancy before the contract term ends if you break any condition of the tenancy.

89. You may end this contract by giving your landlord at least two months notice after the six month break clause. The address for the tenant to serve Notices on the Landlord is:

(address)

You must also inform the Agent. The address is on the front of this contract.

In late November and again in January we received notice of court proceedings to re-possess the house due to mortgage arrears. In attending the court hearing, which the landlady did not attend, we found out that her mortgage is not buy-to-let, and the advice we received from the CAB was that this would give us very little protection if the house was taken by the mortgage company. Therefore we decided to draft a break-clause letter to cover ourselves and we sent it to the landlady’s given address and the introductory estate agents as per the contract. The letter was dated 27th January 2010.

On May 1st one of my housemates moves out as per the break-clause letter as he wasn't happy with the Landlady, the house or the situation we'd been through. Me and the other two decided to stay in the house with the verbal agreement of the landlady as she eventually paid off her mortgage arrears, although we still have plans to move out before the expiry of the original term. Now one of my remaining housemates wants to move out at the end of the next month and has sent a further letter giving one months notice that he will move out on the understanding that we have now entered a "periodic tenancy". The landlady has said that she wants two months notice "as per the contract". When we speak to her about it she accepts a break clause letter was submitted but only applies for the housemate that moved out first and but does not accept it for the rest of us.

So, some questions for you all:

Has the break clause been served correctly?

If so, does the tenancy after this period automatically become a periodic tenancy with one months notice to leave applying?

If not, what is the best plan of action for remaining tenants? Shall we re-serve the break-clause asap?

Can the break-clause only be served once or can it be re-served?

Because 3 of us stayed on in the house after May 1st could this be taken to effectively constitute going back on the break clause?

If this is the case, does the Landlady have legal grounds to chase us for unpaid rent in relation to the first tenant who moved out?

And does the landlady have to agree in writing that the break clause has been served correctly?

Cheers!

You have a 1 year fixed term with a break clause operating after 6 months - ie from Feb 28th. Any notice given to expire before that will be invalid. You can only give notice for all of you, unless you wish to arrange a substitute sharer with agreement of LL. You cannot 'serve' a break clause as you suggest - you already have one anyway and serving another has no effect unless the LL wants to agree an amendment to the 1 yr agt in writing.

A periodic AST only begins after 1 year on your facts and then ONE months notice by tenant is the law after the one yr, until then its two months as you agreed.

All original tenants are responsible for all the rent from the LL point of view, until notice is properly given and you all move out. You are 'joint and severally liable'. The LL can sue one, some or all of you for any unpaid rent and get judgement for it.

That answers it, but not in your order of q's because some cannot happen the way you describe it.

PS if mortgage co. takes possession , law is they can now get tenants out, but t's owe rent for any time they are there until court says they must leave.

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Tenant Break Clause:

Irrelevant to the lender repossessing. And ...

In late November and again in January we received notice of court proceedings to re-possess the house due to mortgage arrears. In attending the court hearing, which the landlady did not attend, we found out that her mortgage is not buy-to-let, and the advice we received from the CAB was that this would give us very little protection if the house was taken by the mortgage company.

Legally I understand that makes you squatters (because your tenancy is in breach of a prior contract and therefore void). Good idea to stop paying rent as soon as you learn of that position (but put it aside, so you can pay it later without pain if the situation is resolved, and tell everyone else involved what you're doing).

So, some questions for you all:

No idea. But if you want to make an issue of it, your landlady appears to be in a (deservedly) weak position. If she tries to show new prospective tenants around while you're there, it's your duty to warn them, and you should probably also mention it to her lender!

IANAL. The above non-advice isn't worth what you didn't pay for it.

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Thanks for the replies.

Legally I understand that makes you squatters (because your tenancy is in breach of a prior contract and therefore void). Good idea to stop paying rent as soon as you learn of that position (but put it aside, so you can pay it later without pain if the situation is resolved, and tell everyone else involved what you're doing).

The re-possession of the house was eventually resolved by the landlady who paid off her arrears - so we are not under threat of this anymore. But it does form the background to the story and was the main motivation for enacting the break clause.

You have a 1 year fixed term with a break clause operating after 6 months - ie from Feb 28th. Any notice given to expire before that will be invalid. You can only give notice for all of you, unless you wish to arrange a substitute sharer with agreement of LL. You cannot 'serve' a break clause as you suggest - you already have one anyway and serving another has no effect unless the LL wants to agree an amendment to the 1 yr agt in writing.

A periodic AST only begins after 1 year on your facts and then ONE months notice by tenant is the law after the one yr, until then its two months as you agreed.

All original tenants are responsible for all the rent from the LL point of view, until notice is properly given and you all move out. You are 'joint and severally liable'. The LL can sue one, some or all of you for any unpaid rent and get judgement for it.

That answers it, but not in your order of q's because some cannot happen the way you describe it.

PS if mortgage co. takes possession , law is they can now get tenants out, but t's owe rent for any time they are there until court says they must leave.

What you are suggesting plummet is kind of the worst case scenario for us and I hope this is not the case - I have received several differing opinions on this because the break clause is not entirely clear:

#86 says you can bring the tenancy to an end 'at any time' after six months but #89 seem to say you can't serve notice till after six months. The January notice could be valid because the notice ended just over 8 months into the tenancy, i.e. 6 months + at least 2 months' notice.

Following #89 to the letter means you could not effectively give notice til after 7 months, because enacting the break clause on February 28th would means the notice would still fall inside the 6 month period!

Edited by screamopilla

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Lots of rubbish being posted on here, particularly the squating part!

Op you have a valid contract, you are not a squatter.

Wether or not your contract Is now a periodic wil depend on what and how you staying beyond the breakclause date was agreed. Was it agreed that three of you would remain and one would leave? If so its a periodic between three of you.

If it was agreed, as per the breakclause that the notice could be withdrawn, then it was withdrawn and your all still in the fixed term.

Can you explain in more detail what was agreed and how it was agreed.

Edited by Planner

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Lots of rubbish being posted on here, particularly the squating part!

Op you have a valid contract, you are not a squatter.

Wether or not your contract Is now a periodic wil depend on what and how you staying beyond the breakclause date was agreed. Was it agreed that three of you would remain and one would leave? If so its a periodic between three of you.

If it was agreed, as per the breakclause that the notice could be withdrawn, then it was withdrawn and your all still in the fixed term.

Can you explain in more detail what was agreed and how it was agreed.

The Landlady came round to discuss the situation with us on her own, and all 3 of us tenants were there, however we did not note, write down or sign anything. She agreed with us that we wouldn't have to "make up" the 4th tenants rent, ie. we would continue to pay what we were paying before. She also said that she wanted two months notice if we were going to move out, and in the mean-time she agreed she would try to find another short-term tenant. Does this agreement form a basis for a "verbal contract" if the break clause letter is deemed to be valid?

At no time did we send any correspondence advising that the break-clause was withdrawn or agreeing anything over the phone or verbally, but the fact that 3 of us stayed on in the house could 'imply' withdrawal.

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To be honest, given that you agreed the contract from 29th August 2009, you have less than 3 months left, so assuming you want to leave why not just go on the last date? i say this as if you serve notice you have another full rental period (i.e to 28th of month) which now means you are stuck for almost 2 months minimum.

so you might as well not waste your time and just wander off on the 28th August this year.

If you want to stay then her 2 months notice stuff is irrelevant, its one months notice from the end of fixed period (end of story)

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