Tenancy agreements

[nataliejayne]

Hi,

I have been hearing a lot that AST tenancy agreements must have a 6 month break clause nowadays? is this true.

thanks,

[Grampa]

There is no requirement to do so and i would advise not to anyway as it is very easy to get them wrong which can cause problems when serving s21's at the break cause stage. Keep it simple use a 6 or 12 month tenancy.

[Richlist]

Hi,

I have been hearing a lot that AST tenancy agreements must have a 6 month break clause nowadays? is this true.

thanks,

Well that hardly makes much sense if the AST is for 6 months anyway !!!.

Normally I only issue 6 month AST's but, some of my properties require the freeholders 'permission to let' and a fee is payable for each new AST.

So, it makes perfect sense for me to issue one 12 month AST with a 6 month break clause and pay just one fee instead of issuing two 6 month AST's over the course of the year requiring me to pay two lots of fees.

As you can see......break clauses do have their uses and rather than avoid them the effort should be put into getting them right.....and as with most things, its not difficult to do.

[Mortitia]

This afternoon I have just had an offer on my London flat with the tenant wanting a 1 year lease and and 2 month break!

Definitely not! I always do a 6 month AST - allowed to go periodic if all goes well.

[Richlist]

A tenant asking for a 2 month break clause in the contract clearly suggests that there is a chance that they will use that break clause to terminate their tenancy. Thats almost the same as initially granting a 2 or 3 month tenancy (I know the minimum period for AST's is 6 months) which none of us would do willingly UNLESS you insist on a BIG increase in the monthly rent.

As landlords we all have fixed costs to move a tenant into a property and those costs are normally amortised / spread over a minimum of 6 months. If the tenants want to leave sooner than that then they should expect to pay a higher monthly rent to cover the landlords costs.

Gotta go get ready.....Its curry nite tonight.

[Mortitia]

Not such a lucky lady tonight then Richlist?

[Grampa]

There is no minimum period for a AST. There used to be and then the Housing Act was amended, I think it comes under section 19a.

The guild of residential landlords actually recommend a 3 month tenancy for new tenants. You still cant get a possession order before the 6 month mark but you can serve a s21 earlier and have the 2 months notice end before 6 months as long as it doesn't end before the last day of the (3 month) tenancy. I haven't done it but what that means is you could go to court between the end of months 3-6 but the judge wont give a possession order before month 6 but I guess you could get it on month 6 and 1 day.

This potentially could shave 2/3 months off getting a tenant out if you have problems at the beginning of the tenancy.

[Richlist]

There is no minimum period for a AST. There used to be and then the Housing Act was amended, I think it comes under section 19a.

I didn't know that but it makes little difference to the argument regarding landlords fixed costs being spread over a 6 months period or longer and the logic of increasing monthly rents for much shorter rental periods.

This potentially could shave 2/3 months off getting a tenant out if you have problems at the beginning of the tenancy.

I guess that's assuming the tenant is going to ignore the S21 and force one to go the whole way with a court order for possession & a baliff etc. In my world, fortunately, that is not my expectation or experience as tenants are carefully selected, well looked after and tend to be very well behaved.

My AST's will continue to be 6 or 12 months normally. Any tenant wanting less than 6 months would be offered a tenancy at an increased monthly rent in order to make it worth my while.

The guild of residential landlords actually recommend a 3 month tenancy for new tenants.

Seems the GofRL doesn't live in the real world as 3 month tenancies are often unaffordable to many tenants once the landlord has raised the rent to cover his fixed costs.

.

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