OpenRent Community

Break Clause Confusion

Hi all!

I am currently helping my prospect tenant to understand their AST’s break clause and I got confused by myself and hopefully you guys can help me to understand better.

So my confusion is from the following extract from the contract, based on what was written word to word it suggested that before the expiration date notice is 2 months and contract is 12 month. Correct me if I am wrong, regardless what was written there it will be one month by default after 6 month?

"The Tenancy will be for the term of 12 months commencing on 22nd September 2020 and expiring on 22nd September 2021 with break clause referred to in Clause 7.9

The Tenant may serve not less than two months’ notice in writing at any time after the first four months of the Term of his intention to determine this tenancy then on the expiry of this notice the tenancy shall be determined.

The Landlord may serve not less than two months’ notice in writing at any time after the first four months of the Term of his intention to determine this tenancy then on the expiry of this notice the tenancy shall be determined as per Housing Act 1988 section 21(1) and (4) as amended by section 194 and paragraph 103 of Schedule 11 to the Local Government and Housing Act 1989 and section 98(2) and (3) of the Housing Act 1996.

In the event this Tenancy becomes a contractual periodic tenancy, the Tenant is required to give the Landlord not less than one months’ notice in writing to expire in line with the rent date."

The contract is poorly written, suggest you go back to the contract supplier and ask them to amend this section. If you and your tenant cannot understand it, then the contract is not fit for purpose and you are entitled to a refund or an amendment.

From the way the contract is written the word, "determine,’ also clearly has a legal definition. This should be shown at front of the contract, need this definition to de-code the meaning of the contract. But whatever legality it is trying to enforce, it may not be legally enforceable if the contract is badly written or definitions are missing.

Its not 1 month by default after the first 6 months. If its intended to be a CPT, which it sounds as though this is, then the notice period is specified in the contract.

Do you mean 2021 - 2022 rather than 2020 - 2021? and incidently, 22nd to 22nd is 12 months and 1 day.

It means what it says. The tenant can serve a 2 month notice any time after 21st January 2021(/22) and the tenancy will end when it expires. If the tenant stays past 22nd September 2021(/22) Then a periodic tenancy will arise by virtue of the contract and the notice period is then 1 month.

in short it is still in AST as it is September last year and expire September this year and then becomes periodic CPT. so it is still within 12 month, the tenant want to give 1 month notice in July this year so he can leave in august this year before contract ends in September. so from what you are saying, in this scenario it has to be an undisputed 2 month notice?

I would of thought the definitions are all around nouns rather than verbs as such? and how exactly can you claim it to the supplier the contract is poorly written? obviously they don’t want to lose a month rent themselves.

just a bit of a context, the contract is my future tenants current contract with someone else (not mine), he gave a month notice to his current landlord and thinking he can come over in a month time, but they told him it is two month notice.

So based on the clause is there anything that he can do to make it 1 month?

Yes that background makes all the difference.

My apologies, i am not sure i quite understand. so are you saying if there is no definition on the word “determine” then that clause won’t be legally enforceable. So what could happen is the landlord is not happy if tenant wants one month notice where the landlord wrote 2 months and if the tenant still want 1 month notice then in most likely cases that will result in small claim court for the potential loss that either party would bear. The likely outcome of that small claim court would be the contract is missing the definition and therefore the landlord can not do anything about it and let tenant to get away with 1 month notice?

Is this the difference you are referring to? what is the usual definition of determine?

p.s. there is no definition page on Openrent’s AST template…so tenants can do whatever they want?

You have explained alot, and what you have said makes alot of sense. The confusion has arisen as I don’t use open rent’s contracts. I had one specifically written for my property that gives me extra protection (and to save money in the long run). So I am unfamiliar with the format of the open rent contract. I can see you are better placed than I to both ask and answer the question.

I see. It sounds like the tenant can try “threaten” the landlord and if landlord don’t buy it, then tenant just wait 2 months. not the end of the world after all to wait one more month and i don’t think it is worth going all that trouble to tell my future tenant to do something that they’ve never done before just for coming a month earlier.

The word determine in a tenancy or lease just means end it.

It’s 2 months notice at the moment and there is nothing the tenant can do except try to negotiate. Sorry.