My agent mentioned a break clause. What exactly is this..?
My agent mentioned a break clause. What exactly is this..?
A break clause is sometimes added to a fixed term tenancy agreement. This is usually requested by the landlord or tenant if the initial fixed term is for a year or more. A break clause will most commonly allow either the landlord or the tenant to give notice at an agreed interim stage.
For example, a 12 month tenancy may have a 6-month break clause which means that the tenant or landlord can give notice to terminate at the 6-month stage. Notice cannot be given prior to this date nor can it be given after the break clause stage has expired. When timing the notice it is important to bear in mind how much notice is required and when this has to be served. For example, some tenancy agreements state that one month notice must be given by the tenant to coincide with a rent due date. Notice just one day after the rent due date can equate to nearly 2 month’s notice because it is not effective until the next rent due date. The notice for the break should be given to expire at the 6 month stage in this example.
Landlords normally must provide 2 months notice whereas tenants should provide 1 month notice.