12 month contract with break clause

Tenant Discussion
1

Hello,

I hope I am posting on the right forum.

I am about to sign (have no yet signed) a 12 month contract with a 6 month break clause beginning from 01/04/2021 to and including 31/03/2022.

The “Term” is to include a statutory periodic tenancy or any contractual periodic tenancy that is defined in paragraph

as following the fixed term.

If on the coming to the end of the fixed term agreed above, the Landlord does not seek possession and the Tenant remains in the Property, they will be considered, by virtue of section 5 of the Housing Act 1988, to have a statutory periodic tenancy. This will continue till ended by either party."

and then paragraph 2.5 is below:

The break clause says the following:

"Ending the Tenancy

While the tenancy is periodic after the SIX MONTHS fixed term contract expires then the tenant agrees to provide one month’s written Notice which must expire the day before a Rent Due Date.

Break Clause

The Landlord may bring the tenancy to an end at any time before the expiry of the fixed term (but not within six months of the commencement date) by giving to the Tenant at least 2 months written Notice stating that the Landlord requires possession of the Property. A Notice under section 21 of the Housing Act 1988 will suffice to implement this sub-clause.

The Tenant may bring the tenancy to an end at any time before the expiry of the fixed term (but not within six months of the commencement date) by giving to the Landlord at least one months written Notice.

The Tenant will be liable to pay a contract breaking fee of if the Tenant brings the tenancy to an end before the expiry of the 6 months fixed term. One months written notice is still required in this instance."

I just wanted to understand the break clause fulling before I sign, from my understanding it says the first 6 months are fixed term, tenancy cannot be brought to an end before this, aka I must be there until 30/09/2021 as this is the end of the 6th month.

1st month April
2nd month May
3rd month June
4th month July
5th month August
6th month September

It says the tenant can bring the tenancy to an end at time before the expiry of the fixed term (which is 12 months" but not within six months of the commencement date, by giving the landlord one months notice that expires the day before a rent due date. My rent due date is the 1st of every month.

Therefore, if I wanted to exercise this break clause, when is the earliest I can give notice?

My understanding would be 30/08/2021 - as this notice will expire at the end of the 6th month fixed term (30/09/2021, and September only has 30 days) and it is before the rent due date of 01/10/2021.

However one of the letting agents thinks the earliest notice that can be given is 30/09/2021, to expire on 31/10/2021 aka the end of the 7th month.

Which interpretation is correct?

I am not too fussed either way, as likely will want to stay on but I would like to get another opinion as I have asked several other people and they agree with my interpretation.

2

The contract is contradictory, but that usually works in the tenants favour. The break clause has a bare 1 month notice. It doesnt say it has to end at the end of a rental period. That requirement seems to be limited to when the tenancy becomes periodic. I would say the first day you can serve notice under the break clause is 1 October.

3

Thank you for your input!

When I mentioned to the agent it contradicts itself she made me feel like I was being crazy lol.
It says the notice needs to expire a day before the next rent due date which for me will be the first of every month.

But I’ll figure that out should I ever actually want to exercise the break clause or not. It would only be if I get a new job training contract toward the end of the year which atm is 50/50 and may not actually happen.

Also I forgot the break clause in the contract says the tenant can end the tenancy before the 6 month fixed period by paying a breaking fee (the amount is written in the contract and is reasonable) - so that is also an option should I need more flexibility at any point.

Again thank you for your input

4

It sounds like the agreement was originally drawn up for a six month fixed-term AST, and inadequately adapted to cover in principle an intended twelve-month period.

Academic question here, but one I’ve come across recently in real discussion with a potential tenant: since either party may bring the agreement to an end at six expired months, what is/was the perceived value of the stated twelve-month ‘fixed’ term to (a) the tenant or (b) the landlord ?

Sophie, would a six-month fixed-term agreement have suited you equally, with the option to roll over as-&-when into a statutory periodic arrangement ? Or were there other objectives ?