A break clause is a term in a Tenancy Agreement that allows a tenant and/or landlord to terminate the tenancy before the tenancy period comes to an end, without incurring any financial penalty.

If there isn’t a break clause in the tenancy agreement (which is quite common) – then the tenant is usually responsible for the rent for the whole period, even if they move out before the end date specified in the tenancy agreement.

How the Landlord should use the break clause

It’s important to note that even if the tenancy agreement does include a break clause, the Housing Act 1988 prevents the court from awarding possession to a landlord until six months have elapsed from the beginning of the agreement. So the break clause can only be used after a tenant has been in the property for 6 months. Also, the tenant must receive at least two full months notice- this can be done during the forth month into the tenancy.

Landlords should serve a Section 21 – Notice of Possession to enforce the break clause.

How the Tenant should use the break clause

If the tenant wants to enforce the break clause, they must also serve a written notice (not a Section 21) after 6 months into the tenancy. A written document with signature, surrendering the tenancy will suffice. The tenant is also required to give two months written notice to the landlord to terminate the fixed term.

What if the tenant doesn’t leave?

If the tenant doesn’t leave the property after enforcing the break clause by serving a Section 21, the landlord will need to issue Court proceedings and ask a Judge to order possession. The Judge will then look at the break clause to see if it is valid.

If both parties want to end the tenancy

If both parties want to end the tenancy at any point, then it doesn’t matter if a break clause exists or not. In order to end a tenancy during a fixed term when both parties agree, they will both need “surrender” the tenancy. This can just be a written document, which both parties agree to by signing.

To end an Assured Shorthold Tenancy, (AST), a “Section 21- Notice of Possession” must be served on the Tenant.

What is a Section 21 Notice

A Section 21 Notice is a document that must be served on your tenant in order to regain possession of your property. A landlord can serve a Section 21 Notice without reason for doing so, on or after the coming to an end of an AST.

When can a Section 21 notice be issued?

Under Section 21 of the Housing Act 1988, a Landlord has the legal right to get his property back at the end of an AST so long as the tenancy has ended and the landlord has followed the correct legal procedures and correctly served a Section 21 Notice on the tenant or tenants. In order to fully protect yourself it is advised that a Notice be served on all tenants residing at the property, especially in the case of ‘sharers’.

If the tenancy has not ended, and there is plausible reason for eviction (i.e. rent arrears), then a Section 8 Notice should be served. However, like with a Section 21, a valid “Section 8 Notice to Quit” must be served on the tenant.

Service of Notice

The landlord should serve the notice by either post or in person.

If you decide to serve the notice by post, it is advisable that you do this via ‘recorded delivery’. This is your evidence that the notice was received by your tenant if needed by the Court. If you send your notice via post, the date of service is recognised by the Court as the day in which the letter would have arrived and not the date sent.

Alternatively, you could deliver the Notice by Hand in person. If you do decide to take this route, it is advised that you have a witness with you in order to witness the handover. It may be that your witness is required to provide a statement for the court confirming the handover if possession proceedings are commenced and your tenant argues you did not provide a legal notice.

Serving a Section 21 Notice during the Fixed Term of the Tenancy

Section 21 of the Housing Act 1988, amended under the Housing Act 1996 states, “….the landlord under a fixed term tenancy to give two months’ notice to recover possession……in writing”.

This means that a tenant covered by an AST must be given at last two months notice in writing. This must be by way of a Section 21 Notice advising them of the intention to repossess the property and the grounds that they are using to support their claim. The two months notice period commences upon receipt of the Section 21 Notice by the tenant.

Under the Housing Act 1988, possession cannot take place during the fixed term of the tenancy, but, a Notice can be served at any time so long as the tenant is given a minimum of two month’s notice. Two months after the Section 21 Notice to Quit is served the tenant is then required to leave the property. This includes Section 21 Notices served up until the last day of the fixed term.

The provisions in section 21(1)(b) applying to fixed term tenancies state:

“Without prejudice to any right of the landlord under an assured shorthold tenancy to recover possession of the dwelling-house let on the tenancy in accordance with Chapter I above, on or after the coming to an end of an assured shorthold tenancy which was a fixed-term tenancy, a court shall make an order for possession of  the dwelling-house if it is satisfied-

a)  that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than a statutory periodic tenancy: and

b)  the landlord, or in the case of joint landlords, at least one of them has given to the tenant not less than two months’ notice stating that he requires possession of the dwelling-house.”

It is possible to serve a Notice two months before the end of the tenancy, but, it should not be dated to expire on or before the last day of the tenancy. For example, if the tenancy was due to end on 31 March, the notice could be given to the tenant three months prior to that date, (30 December) but the date on the notice must be given on or before the day on which the fixed term comes to an end (31 March).

If a Section 21 Notice is served during the initial fixed term of a tenancy, and the landlord issues a further fixed term tenancy to the tenant, the landlord would have to issue a New Section 21 Notice to the tenant in order to regain possession.

Serving a Section 21 Notice during a periodic Tenancy

At the end of a fixed term tenancy, unless a new fixed term is agreed, the tenancy automatically becomes a statutory periodic tenancy. This is a week to week or month to month tenancy, depending on how your tenant pays his rent.

Under Section 21 of the Housing Act 1988, the procedure is slightly different when serving a notice to a tenant in a statutory periodic tenant.

Section 21(4)(a) of the Housing Act 1988 applies to assured shorthold tenancies that have become periodic and states:

“Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied-

(a)  that the landlord or, in the case of joint landlords, at least one of them has given to the tenant a notice stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling-house is required by virtue of this section; and

(b)  that the date specified in the notice under paragraph (a) above is not earlier than the earliest day on which, …….., the tenancy could be brought to an end by a notice to quit given by the landlord on the same date  as the notice under paragraph (a) above”

As with serving a section 21 during a fixed tenancy, a minimum of two months’ notice is required and the day on which the notice expires must be the last day of a period of the tenancy.

The tenancy period depends on how often the rent is paid. If the tenant pays rent weekly, then the period of the tenancy is one week, if the tenant pays rent monthly, the period of the tenancy is one month.

The periodic tenancy begins straight after the fixed term ends, so if the fixed term ends on the 5th then the period of the tenancy begins on the 6th; as long as rent was paid monthly the last day of each period of tenancy would be the 10th of each month. Consequently, the Section 21 notice would have to expire on the 10th of a month and be served a minimum of two months before the tenth of that month.

If the tenant doesn’t leave after the section 21 expire

If the tenant fails to vacate the property by the expiry date on the notice the landlord will need to apply to the court for a possession order. Provided the correct procedure has been followed by the landlord issuing the Section 21 notice, the court will have no choice but to grant the possession order.

If the tenant fails to vacate after the court has issued the tenant with the notice to leave, the landlord can ask county court bailiffs to evict the tenant.

• Keep up with the level of inflation
• Take advantage of a booming rental market

How to increase rent

The most common way of increasing rent is done by getting the tenant to sign a new tenancy agreement at the end of the fixed term. This is the best and most common way of increasing rent.

However, it’s not necessary or required to put a new tenancy agreement in place as the tenancy will automatically become a periodic tenancy whereby all the same terms and conditions apply. So alternatively, you can also get the tenant to agree the rent by signing and returning to you a copy of a letter sent regarding the increase. As long as the tenant has signed and dated the letter, it can be proof that they have agreed to it.

Rent Review Clauses

Some times there are rent review clauses stated in the tenancy agreement. This is a perfectly valid clause. However, you need to be careful as the clause must be fair and comply with the Unfair Terms in Consumer Contracts Regulations 1999.

The best way to make a rent review clause fair is by specifying what the new figure will actually be. For example, if the rent at the beginning of the tenancy is £700pcm, the clause could specify that after 6 months the rent will increase to £750. This will be deemed fair as the tenant will have approved the actual amount by signing the agreement. However, if the clause states that the landlord can increase the rent to whatever he likes, this will not be deemed as fair.

Don’t increase the rent by too much

How much you increase the rent by is extremely important and it should be a fair increase. Even if the new amount is stated in the Tenancy Agreement, if the increase is too excessive, the court may deem the increase clause invalid, regardless of whether the tenant signed the agreement.

There was a specific case (the Bankway case) where the tenancy agreement had a clause stating that the landlord had the option to increase the rent from £4,680 to £25,000. Once the increase was effective, the tenant fell into arrears (as expected) and the landlord sued for possession.

The Court of Appeal said that the rent increase clause was invalid because the substantial increase was in place to enable the landlord to bring the assured tenancy to an end when he chose to obtain possession of the property because it was obvious the tenant wasn’t going to be able to pay the new amount.

So, large rent increases that the tenant is obviously not going to be able to afford are not recommended.

• Sex / Gender
• Disability
• Race
• Religion or belief

It is illegal for landlords to discriminate against tenants for any of the above, consequently the following may be against the law if a tenant is subjected to any of the practises:

• Renting a property to particular tenants on worse terms than other tenants
• Treating particular tenants differently when determining policies regarding facilities such as laundry and garden access.
• Evicting or harassing tenants because of race, gender disability, sexuality or religion.
• Refusing to assist reasonable requests for a disabled person, such as allowing a blind dog to live in a property for a blind tenant

Most of the discrimination rules referred to do not usually apply if the landlord is residing in the same property as the tenant. However, the landlord is still forbidden to discriminate because of a tenant’s race.

Sex Discrimination Act

The Sex Discrimination Act 1975 (SDA) is written in terms of discrimination against women, but also applies to discrimination against men. The act defines two kinds of sex discrimination, generally referred to as direct and indirect.

Direct
An example of direct sex discrimination is a landlord treating a female tenant as inferior compared to a male tenant purely because of her sex.

Indirect
An example of indirect sex discrimination is where a landlord applies a condition or requirement to a female tenant which she must comply to in order to qualify for, or obtain tenancy.

Victimisation
The Sex Discrimination Act also makes it against the law to victimise a tenant by treating him or her less favourably than another tenant because they have brought a sex discrimination claim or alleged that someone has committed an act of sex discrimination.

Disability Discrimination Act

The Disability Discrimination Act makes it illegal for landlords to discriminate against tenants because of a disability. The definition of a ‘disabled person’, as given by the Act is:

“A person has a disability if he or she has a physical or mental impairment which has a substantial and long-term adverse effect on his/her ability to carry out normal day-to-day activities”

In accordance with the Act, a landlord is discriminating if:

• The landlord threats a tenant less favourably because of a reason related to their disability.
• The landlord is unable to show that the treatment in question is justified.
• The landlord fails to comply with Part 2, Sec 6 of the Disability Discrimination Act. In the case of tenancy agreements, this section deals with adjustments that are made to such agreements in order to suit the disabled tenant.
• The landlord cannot show that his failure to comply with Sec 6 is justified.

Acceptable reasons to treat a disabled tenant differently
Under some circumstances it may be acceptable to treat a disabled tenant differently from others. For example:

• It is some times justified to refuse tenancy to a disabled person the grounds of health and safety
• It is acceptable to refuse a disabled person access to a facility, if allowing them access results in the prevention of others using the facility. In such a case it would be acceptable to allow the disabled person different access to the facility than would usually be given.
• If a disabled person is unable to enter into a legally enforceable agreement, or give any informed consent, it is acceptable to refuse to let.

Making Adjustments to Properties
It is not a requirement for landlords to make any alterations to their properties in order to make them more easily accessible for disabled people.

Racial Discrimination Act

Under the Race Relations Act it is unlawful for a landlord to discriminate against a tenant on racial grounds. The Act defines racial grounds as including race, colour, nationality or ethnic or national origins.

According to the Race Relations Act, there are four main types of racial discrimination: direct, indirect, victimisation and harassment.

Direct
Direct racial discrimination is when a landlord treats a tenant less favourably because of issues related to race. An example of this is if a landlord refuses to give tenancy to a tenant because of their race.

Indirect
Indirect racial discrimination may fall into one of two categories, depending on the racial grounds of discrimination. The first is on grounds of colour or nationality, which is when a landlord requires a non-discriminatory condition which applies equally to all tenants. The second is based on race, ethnic or national origin. This occurs when a provision, criterion or practice which, on the face of it, has nothing to do with race and is applied equally to all tenants:

Victimisation
This is when a tenant is treated less favourably than others in the same circumstances because they have complained about racial discrimination, or supported someone else who has.

Harassment
The definition of harassment introduced by the Race Relations Act 1976 (Amendment) Regulations 2003 applies when the discrimination is on grounds of race or ethnic or national origins, but not colour or nationality. Harassment on grounds of colour or nationality amounts to less favourable treatment and may be unlawful direct discrimination.

A landlord harasses a tenant on grounds of race or ethnic or national origins when he or she engages in unwanted conduct that has the purpose or effect of violating the tenant’s dignity, or creating an intimidating or hostile, degrading, humiliating or offensive environment for them.

Tackling Discrimination

If you think you may have been discriminated against then you have the right to take legal action. The first step is to seek advice from a qualified solicitor, the Citizens Advice Bureau or a legal advice centre.

Assured Tenancy – Gives you the right to remain in a property unless the landlord can convince the court there are good reasons to evict you (such as rent arrears, damage etc.).

BTL (Buy to Let) – investment strategy of buying a residential property to be let for profit

BTS (Buy to share) – buying a property with the intention of renting out one or more rooms to help pay the mortgage

Deposit – A fixed sum taken by landlords/letting agents at the start of a tenancy to cover reasonable losses (rent arrears, damage etc.)

DSS – those that claim from state benefit for housing benefit

Guarantor – One who provides a warrant or guarantee to another

HMO (House in Multiple Occupation) – types of accomodation shared by several people

Inventory – Detailed list of all items in the property, including their condition

Landlord – Either the person who owns a property which you are renting and to whom you pay rent, or the freeholder of a property for which there is a leasehold tenure

Live-in landlord – A homeowner who rents out one or more rooms in their property whilst living there themselves.

Live-ouy landlord – A landlord that rents a property they do not live in themselves

Lodger – A lodger is a tenant who rents a room in another’s house, usually from a Live in landlord

PCM – Per calender month. Usually used when regarding when to pay rent

Sublet – An arrangement where the existing tenant lets all or part of the property to another

Rent – The amount charged to rent a property

Tenancy – Occupancy: an act of being a tenant or occupant

Tenancy Agreement – Legal contract between landlord and tenant, usually written, but can be verbal

Tenancy Deposit Scheme – A government scheme introduced in 2007 to safeguard deposits taken by landlords.

Tenant – Someone who pays rent to use a building that is owned by someone else

A joint tenancy is where you have two or more people under the same tenancy, with all of the individuals having exclusive possession of the whole property together, and share equal rights to the property.

This is a legal agreement between all tenants and the landlord. All tenants are responsible for keeping to all of the terms and conditions in the Tenancy Agreement.

A joint tenancy is not the same as a ‘tenants in common’, although they are similar and often confused.

Tenants in common
Similarly to a joint tenancy, there are two or more tenants under same tenancy. However, each tenant has exclusive possession of a specific bedroom in the property, addition to the use of the other communal areas.

Requirements for Joint Tenancy

• Each tenant must be at least 16yrs old
• All the Tenants must hold the tenancy under one legal document
• The start and termination dates must be the same for all the tenants
• All tenants must have equal rights to the entire property
• All the Tenants must be entitled to possession of the entire property

Liability of Joint Tenants

All tenants in a Joint Tenancy are usually jointly liable for any rent arrears and/or damages to the property. This means if any one or more of the joint tenants’ breach any of the terms of the tenancy agreement, the Landlord can claim against individual tenants or all of them jointly. This is seen as a great advantage for the Landlord regarding security.

Joint Tenancy Guarantor

Each tenant can have a different Guarantor, which provides further security for the Landlord.

Changing Joint Tenants

If one or more of the joint tenants wants to leave the property and/or there are new tenants wanting to take the empty place(s), a new tenancy will need to be concluded. This can be done either by way of a Deed of Variation that will be attached to the Tenancy Agreement, or a completely new Tenancy Agreement can be drawn up.

Ending a Joint Tenancy

To end a joint tenancy, every joint tenant must give an individual notice in writing. This is assuming that the notice adheres to the termination date and notice period stipulated in the tenancy agreement.

If there are arrears when ending the joint tenancy

As said, liability is shared equally between all joint tenants. If any rent is owed when ending a tenancy, each and every tenant will be held responsible. This is why it is important to be careful when opting to be a joint tenant with other individuals.

Unfair terms in a Tenancy Agreement

For a tenancy agreement to be deemed fair it must meet the requirements as set out by the Regulations, which means the following must be adhered to:

• The terms in the contract must be in plain language which is clear and easy to understand
• The terms of the contract must be regarded as fair in terms of a fairness test
• The parties to the contract must have concluded the agreement in good faith.

Examples of unfair terms

Here are a few examples of unfair terms that should not be stipulated in a tenancy agreement, consequently cannot be enforceable:

• Terms which stipulate that the Tenant is to pay for repairs which the Landlord is legally required to repair
• Terms allowing the Landlord to enter the property during the tenancy without prior notice and/or permission

Acting on unfair terms

If you suspect your tenancy agreement may contain unfair terms you should consult an experienced adviser.

For free legal advice on the matter, you can contact your local Citizens Advice Bureau.

If both parties agree to end a tenancy agreement, it can be done at any time during a tenancy. This is known as ‘surrender’

Both parties should agree to this in writing so it is clear what is being agreed. If a joint tenancy is in place, all the tenants must agree to the surrender.

When a tenant has legally surrendered the tenancy, then the landlord has the right of possession of the property under Section 5 of the Housing Act 1988.

The landlord must ensure the agreement has been ended properly. If the landlord takes possession of the property when both parties have not agreed to ending the tenancy, then the landlord could be accused of unlawful eviction.

There are two ways that surrender of a tenancy can occur. Firstly, by ‘operation of the law’ or secondly, by a ‘declaration of surrender.

Surrender by Operation of the Law
This is when the tenant surrenders the occupation of the property to the landlord and the landlord accepting. This may involve the tenant returning the property’s keys to the landlord, and the landlord accepting that the agreement is over and that they now have possession.

Declaration of Surrender
This is when the tenant hands over a written document that acts as proof that the tenant has given up the possession of the property. The document is called a ‘Declaration of Surrender’. The landlord must accept the surrender in order for the tenancy to end.

Ending a fixed term tenancy

A fixed term tenancy is for a fixed period of time agreed in the tenancy agreement. There is usually a start and end date in the tenancy agreement, which is the fixed dates of the tenancy.

A lot of fixed term tenancy agreements have a ‘break clause’, which permits the tenant to end the agreement before the fixed term ends. If this clause exists, the tenant can give notice provided they follow the procedure stipulated in the tenancy agreement e.g. the amount of notice they must give the landlord.

If there is no break clause, then the tenant cannot end the tenancy early without the landlord’s agreement. If the tenant does vacate early without the landlord’s agreement, then the tenant can be liable to continue paying the rent until the end of the fixed period.

A tenant has the right to leave on the last day of the fixed term without giving any notice. If the tenant remains in the property after the fixed term, the tenancy will automatically become a periodic tenancy agreement, and will have to give proper notice unless the landlord agrees to them leaving.

If the landlord wants to end the agreement at the end of the fixed term, which is typically 6 months or 1 year, then the landlord must serve the tenant with a Section 21 – Notice of Possession two months BEFORE the end date.

Ending a periodic tenancy agreement

When a fixed term tenancy agreement ends, and no new contract has been signed, then the tenancy becomes periodic. The terms and conditions in the previous tenancy agreement still apply, but the contract will roll on a month-by-month basis, or even a week-by-week basis. It depends on how often rent is paid. If rent is collected every month, then the contract rolls on a month-by-month basis.

In the case of a periodic tenancy, the landlord can end a tenancy based one rental period of notice. So if rent is paid every month, the landlord only needs to serve one month’s notice. The notice must be in writing and must end on the first or last day of the tenancy, unless the tenancy agreement allows it to be ended on a different day.

A tenant may choose to end a periodic tenancy be issuing a valid notice to quit to the landlord. The tenant must also give a rental period to the landlord in order to end the agreement. Once the notice expires then the tenant’s agreement will have ended.

Ending a tenancy agreement early

If the landlord wants to end the tenancy agreement early, but the tenant refuses, then the landlord cannot regain possession early, but must serve a Section 21 – Notice of Possession at least two months before the fixed term has ended so the tenant has notification that they must leave on the last day.

A landlord can only end a tenancy before the fixed terms if the tenant has breached a clause in the tenancy agreement. If this is the case, the landlord must serve a section 8 (notice to quit) to the tenant. A section 8 notice states that the landlord intends to seek possession of the property and also stipulates the ground or grounds on which possession is sought. Without a valid notice a landlord will not get possession.

In most cases, a tenant will leave the property when a section 8 notice is served, so there is no need to apply for a court possession.

If the tenant refuses to leave after the section 8 has expired, then the landlord must make an application to a court for possession. If the landlord is given possession, the court will decide on how quickly the landlord will regain possession. The decision is usually based on the circumstances.

What if the tenants refuse to leave?

If the tenants refuse to leave at the end of a fixed term tenancy then a landlord will need to serve a section 21 (Notice of Possession) on the tenants giving them a minimum of two months’ notice. If the tenant still refuses to leave after the notice has expired, the landlord will need to make an application to a court for possession.

Any changes made should be recorded in writing either by drawing up a new tenancy agreement or by amending the existing agreement.

There are many potential reasons why a Tenancy Agreement may need amending. Here are a few of the most common reasons:

• Change in rent amount e.g. rent increase
• Tenant has acquired a pet – new conditions need to be added for pet damage liability
• The tenant wishes to transfer their tenancy to a member of their household who has lived with them for more than one year.
• The tenant wishes to change the tenancy to a joint tenancy.

Although changes are advised and highly recommended to be recorded in writing, they can be agreed verbally. However, this is not advised because if there’s a disagreement or any confusion about any change(s) made to the agreement, it’s difficult to prove which party is correct without written evidence. That is why it is always safer to record everything in a written document.

It is important to note that any amendment made to a Tenancy Agreement must be in keeping with the Housing Act. Both landlord and tenant have statutory rights which cannot be overwritten in a Tenancy Agreement. If this is the case, the Tenancy Agreement is invalid, as the Housing Act is the ruling law, which cannot be overruled.

The primary aspects of the tenancy agreement is typically discussed and understood by both parties before the tenancy begins. Whether the tenancy agreement is written in a contract or solely discussed verbally, the same conditions are agreed:

• Property Details: The address details of the property being rented.
• Term: The start and end date of the tenancy. This is usually referred to as the “fixed term”
• Rent: This should include the amount of rent to be paid, the method and the date of payment.
• Deposit: This should include the amount of the deposit to be paid (if applicable), and what the deposit will cover.
• Depsoit Scheme: This should cover the Tenancy Deposit Scheme the deposit is secured in.
• Landlord’s Obligations: This should cover the responsibilities of the Landlord.
• Tenant’s Obligations: This should cover the responsibilities of the Tenant.
• Other Special Provisions: This should include any other special provisions agreed upon between the parties, such as pets, smoking, sub-letting, etc.

Verbal/Oral Tenancy Agreements are perfectly legal, although they are not recommended as there is no way of proving what was agreed. For example, if there is a dispute between landlord and tenant about the rent, it can be difficult to make a clear ruling on who is right because there is often no proof of what has been agreed.

There can also be legitimate cases where the tenant or landlord genuinely forgot what had been agreed. The problems that can occur with oral agreements aren’t always sinister, but nonetheless, it’s still a major problem. Consequently, it is always advised to have a tenancy agreement in writing to ensure both landlord and tenant are completely aware of their rights and responsibilities.

Like with every assured shorthold tenancy, both landlord and tenant have statutory rights, regardless of whether the agreement is oral or written. These rights are stipulated in the Housing Act 1988, Housing Act 1996, and Housing Act 2004.