What is a Break Clause?

What is a break clause and what on Earth does it do in a rental contract?! Well, let’s get into it.

Sometimes, things just don’t work out. Relationships come to an end, you fall out of love with your job, or you get a little tired of the area you’re living in.

In all these scenarios it’s good to have an exit strategy. “It’s not me; it’s you” or “I think we need to take a break” often works in relationships. But when it comes to the home you’re renting, you need something a little more robust.

Sure, at first you were certain that you loved the apartment. It was perfect — two bedrooms, a south-facing balcony; everything on your list. But now, after living there for 6 months, you’ve realised things didn’t work out how as planned and now you want to leave.

When your tenancy contract is up, it’s easy enough to move on. But what do you do when you’re right in the middle of it and need to leave? If you sign a 12-month contract, how can you exit the property without facing legal action from your landlord?

Enter the break clause, one of the rental market’s best-kept secrets. Let us tell you what it is and why it’s so important.

What is a break clause?

A break clause is a provision found in a lease that allows either the renter or the landlord to terminate it early. In other words, either party may back out of the Assured Tenancy Shorthold (AST) agreement without consequence. This implies that renters can leave the property sooner than originally agreed in the contract.

Break clauses are usually added for the midway point of a contract. For example, a 12-month long contract could have a break clause at six months, allowing the renter or the landlord to end the AST after six months instead of 12. A 24-month contract might have a break clause after 12 months.

How does a break clause work?

Not all break clauses are the same, and not all of them tell you how to terminate an agreement. Others will just need you to notify the landlord or managing agent. Typically, one or two month’s notice is required following the end of a break clause.

In the AST, breaking provisions are clearly outlined. Break clauses can generally be activated at any time once they become active. If your break clause begins six months after it goes into effect, you should be able to use it at any time after that.

Why do you need a break clause?

We all do things with the best of intentions, but life can change without notice. It’s difficult to keep long-term commitments, especially when there’s money (monthly rent) involved, whether it’s due to a loss of income or starting a new job in a different city.

If a circumstance arises that you and the landlord didn’t anticipate, having a break clause provides an extra measure of protection for both of you. The majority of tenancies continue for the full duration of the AST, although it’s prudent to add a break provision just in case something unexpected happens.

Are break clauses mandatory?

There are no laws that require the use of break clauses, and in certain circumstances, they may be replaced with more flexible tenancies that don’t bind tenants to the duration of a contract. Check the AST while renting to see whether there is a break clause included during the process.

If you discover that no break clauses are included and wish for one to be added, ask the landlord or management agent in charge of the move if it’s possible to add a break clause. Although the landlord isn’t obligated to agree, there’s a good chance they will be receptive to your idea.

Flexible renting with Build-to-Rent

As the private rental market expands, so does demand from modern-day renters. As a result of improved expectations, more possibilities arise. In build-to-rent communities, flexible contracts are one such option.

There are numerous alternatives accessible to you, depending on your needs and preferences. Short-term, medium-term, and long-term lets are all options available to you. Living in a flexible environment is important, and it’s becoming more necessary as renters’ requirements change.

The future of renting

As the market develops, it’s clear that a flexible rental strategy will become more normal. Landlords will want to attract good tenants and offering flexibility will be a competitive edge.

This will allow tenants more options for how they live and where they live. But for now, if you want to be safe against the unforeseen, you should definitely look at getting a break clause added to your AST.