I have a few questions I hope someone with more experience than me can answer!
I have agreed to rent my property to a tenant. We have agreed to a 12-month contract and for him to pay for the year upfront. My questions are:
Do we need to add a break clause to the above agreement? If so, what are the pros and cons of this.
He has agreed to pay from the 1st July 2022. He has not moved in currently as he is away and will move in a few weeks. However, I have had the electrical report done today. Am I okay to have the date of the contract start 1/7/22 or should I put 7/7/22 when the electrical safety certificate was done? Is there any legal implications of putting the 1/7/22.
You don’t need to add a break close and I wouldn’t add one in your case. If you add a break clause, it would be strange to take the full payment for 12 months in advance (not sure whether you’re allowed to or not, but I feel it wouldn’t make much sense since you’d potentially have to pay back a part of it).
I don’t know about your other question but if you put down 7/7, you certainly can’t take rent from 1/7. But if the flat wasn’t actually ready for move-in on 1/7, I’d say it wouldn’t be fair to take payment for that period and the decent thing to do would be to just start on 7/7.
“To many this decision appears to be a restoration of the widely-accepted view that, without express provisions, tenants cannot claim refunds for rent paid in advance for the period following a lease coming to an end pursuant to a break clause.”
Which seems to read that if, for example, a 6 month break clause was activated by the tenant, they would not be entitled to a refund of the remaining months they have pre-paid?
Thanks - I’ll stick to 7/7. Quick search shows that a valid EICR must be in place prior to any new tenancy agreements.
Oh, that’s interesting. What if the landlord activates the break clause? Common sense would say that a refund would obviously be due, but the quoted paragraph actually doesn’t suggest it depends on who activates the break clause. The careful formulation by the solicitor could mean that one is legally on thin ice here and the situation isn’t clear and would have to be tested in court. I personally would just avoid the situation – if the tenant pays 12 months in advance, they have the flat for 12 months, with no break clause.
If either party activates a contractual break clause then the balance of the rent must be refunded once the tenant has left. Once the tenancy ends, no further rent can be due. If the landlord wants the option of keeping the rent then they shouldnt use a break clause.
Taking 12 months rent in advance is not a good idea in my view for a host of reasons. Frankly, I wouldnt offer a 12 month contract anyway. Six months fixed term followed by a periodic tenancy gives the landlord more options.