Updating post from Reddit.
I've been renting my house out for the last 8 years and had multiple different tenants but I've never terminated a tenancy myself, as tenants have always been the ones to make that decision.
Now I want to sell the house. It's on an AST (via Openrent), 12 months, started late September 2024.
The contract has a break clause;
>Mutual Break Clause
>12.6. The Initial Term of this tenancy agreement may be terminated by either party giving the other at least two months' notice in writing, such notice not to expire until at least 6 months after the start of the Term. A notice served by the Landlord under section 21 of the Housing Act 1988 shall be sufficient notice under this clause.
>The Tenant is obliged to pay rent up to and including the termination date, so if the tenancy is terminated on a date which is not the last day of a rental period, the rent due for any incomplete rental periods will be apportioned accordingly.
>Effect of Notices to terminate the tenancy
>12.7. On the expiry of a notice to terminate the tenancy under clause 12.2 or 12.6 the tenancy shall end and no further obligations shall be performed under the tenancy save that either party may pursue the other for any breach of this agreement occurring before the expiry of the notice.
How does this work? Would I have to issue a Section 21 regardless of whether I use the break clause or not (e.g. even if I waited 12 months?).
Reading online it says that Section 21 doesn't actually end the tenancy and could lead to court proceedings which obviously I want to avoid. It has valid gas cert and EPC and they were issued the 'how to rent' (I don't think they were actually issued the EPC, it is a public document though).
I have a good relationship with the tenant, but they did specifically ask for a 12 month AST so if enacted the break clause there would be some bad blood there. I feel bad for considering ending it early but also I need the money from the sale to carry on with my own life.
Any advice?
I understand your point about feeling bad for ending it early. A tenant who moved in in September probably does not want to move again so soon (i.e. if you terminate at 6 months).
However, they were aware of the break clause - it's not like you are springing it on them as a surprise. Also, who's to say the tenant is not considering (or will not consider) using the break clause to leave early?
Like you said, you do have to do what's best for you. It can be a bit tasking finding a new place to rent at the moment so I would say let the tenants know as soon as possible and give them as much notice as possible.
Regarding the section 21 - yes you do need to serve this if your intention is to obtaining possession, whether you do this using the break clause or for the tenancy end date. A section 21 notice lets the tenant know that you want possession of your property & what date you want back possession.
A section 21 notice doesn't automatically lead to court proceedings. It's just that if the date on the notice comes around & the tenant has not moved out, you can then proceed to court to obtain possession and evict the tenant. If you have not served a notice, then this process will take much longer as you will still need to serve a notice after they refuse to leave.
Regarding the EPC. A landlord cannot serve a valid S21 notice if they have not provided an EPC to the tenant at the start of the tenancy. That said, that can be remedied by sending the tenants the EPC now before the S21 notice is served.
That's really helpful response, thank you. I guess I have a toss up between ending it early and the tenant possibly not leaving (perhaps out of spite etc) or waiting until the 12th months is up and ending it then. Will give it a think.
The only two people who can grant possession of a property is the tenant and a judge. A Section 21 is more of an intention document. If they move at the end of the notice, great. If they don't, then you apply to the Court for a possession order, which can take many months.
Thank you. I understand. So even if I want them to move out once the fixed term has expired, I would still have to issue a Section 21?
Yes. Otherwise the fixed term tenancy simply rolls forward onto a periodic tenancy.
The problem is the term “mutual break clause”.
It’s not a “break clause.”
The tenant also asked for 12 months as you state.
Therefore you have a problem.
Surely thats semantic, the wording states 'may be terminated by either party giving the other at least two months' notice in writing'. It's not mutual in that case is it?