As the title suggests the tenant can’t commit to a 12 mouth tenancy because of work commitments and would like add the following to the contract.
"The Tenant may terminate this tenancy agreement at any time before the end of the fixed term (12 months), by providing a month prior written notice to the Landlord and paying an early surrender fee. The early surrender fee shall be equal to 11% of the total rent due for the period between the agreed surrender date and the original tenancy end date. The tenancy will be considered terminated once the surrender fee is paid in full and the property is vacated in accordance with the terms of this agreement. "
I’ve not heard of this before so would like some advice.
I’m assuming this is classed as a break clause and will be part of the contract. Unless someone says otherwise I can’t see a problem with this other than changing it so they can only end if after 6 months with 1 month written notice?
It sounds like the tenant (and poss you) is not aware that if the RRB becomes law within the next 12 months (which is very likely), fixed terms beyond 2 months will be abolished anyway for all existing ASTs. IOW, your insistence on a 12-month tenancy is probably pointless.
It’s highly likely that the clause is unenforceable legally anyway as it sounds very much like a LL forcing a tenant not to use a break clause (even though they suggested it). 11% seems a very arbitrary figure. But I’m no legal expert so others will no doubt comment.
It may be a breach of the Tenant Fees Act. If the tenancy hasnt begun, why not just make it a 6 month contract that becomes periodic thereafter. Then the tenant can give notice any time after 6 months.
This is an option too. I don’t mind 6 months contract with 2 months notice is this legal all withing the rrb
The rrb will require new documentation to be served on the tenant and a radical change of the terms and conditions. None of that is available yet and nor is the implementation date. Its unlikely to be until early 2026 now, so watch this space, but a 6 month initial term then monthly theresfter should be fine.
I thought there was an amendment to rent in advance that came out last week
I thought Tessa posted it on her blog
it was stated that rent in advance contracts are accepted if on existing terms
It just can’t be taken new
Youre right. Theres a Government amendment allowing pre-existing arrangements of lump sum rent in advance payments to remain in place. The devil may be in the detail though. I assume it would need to be a contractual arrangement and Im not clesr whether both parties will still need to accept the arrangement. I dont think I’d bank on it at this stage.