Updating post from Reddit.
Hi, looking for some advice. I am a new landlord based in Denmark. Currently have a letting agent finding a tenant for my flat in London. They've found a seemingly good tenant that wants to move in. She has offered the full rent I've requested but wants a 6 month break clause in the contract. Having looked up the tenant on linkedin, she seems legitimate and like she is trustworthy. From what you can tell online anyway!
The agent has pushed back on this but the tenant is very keen to have it included. She explained that it's her first time renting on her own and she is also moving areas so just wants it there as a safety blanket. She does not intend to use it.
The property has been on the market for 2 weeks and so far has had 2 viewings. With various enquiries that haven't made it to viewing stage due to undesirable tenant status.
Each change of tenancy costs me about £700 in admin fees. Plus any missed months of rent which is around £1900.
Would you agree to the 6 month break clause?
(appreciate should the renters reform bill come in in the meantime, this is largely a moot point)
Worth looking at the details of the renters right bill that is due to pass into law soon. It will abolish fixed term tenancies anyway, so it most likely will be a moot point.
I also wonder about all these landlords that took payment upfront for like 12 months will they need to refund tenants as you are not allowed to take money in advance with the new renters bill
Pretty sure theyve already found a loophole around it. My international friends student flat for next year charges them 8 months of rent payment as the ‘second payment’ and 4 months up front as the first payment. First one is due after signing the contract second one before move in.
I don't understand the loophole as that is taking rent up front you can only take 1 month up front monthly to my understanding with rent reform. It hasn't happened yet which is why your friends have paid but I can see landlords being forced to refund if they have taken up front as fixed periods will be ending.
Maybe I'm misunderstanding - but it will only affect new contracts, not the ones in existence, no? And the contracts that do exist will just roll onto monthly after they end?
The current wording will apply to all tenancies. This may change in the lords though. The tories are trying to delay and amend it, despite it essentially being their bill.
Well it will be a hassle for you if she activates the break clause but more of a hassle for her having to move house so soon, surely?
Pretty standard to have a break clause. It benefits you both.
Contracts should of course be fair to both parties. If not no judge will support contesting it.
6 month break clause is normal. Doesn’t mean she’ll exercise it.
It can be a good thing for you, if she turns out to be difficult. You can never tell
It's pretty normal but often disliked by some people and some landlords. It's basically a six month contract which doesn't give renter or landlord 12 month security.
Some do have break clauses BUT they state that you can ONLY break the contract at the 6 month period. It doesn't turn the contract into a rolling one after 6 months.
I presume it’s so that she can leave after six months if the property isn’t what she thought it was. Wish I’d have asked for a six month break clause - now I’m trapped into 12 months. If you’ve kept the property in good condition, you’ve nothing to worry about.
Okay so you say no...
Now you lose 1900 waiting a month for another tenant to move in...
I’ve learned the hard way to ask for it. Too many things might not be immediately visible with the flat, building or area.
If it helps, I always offered to sign a one year contract after the 6m, giving the landlord a reasonable chance at a 18 months with a good tenant.
I now have my own place but will soon need to rent it out and move and will likely accommodate similar requests.
Id do it - but id say if she doesnt like it to let you know Auh time as SDeptember is almost always the best month for geting new tenants in
There are ways around it but essentially these tenancies will be done outside of the AST framework so a common law or "business" let. It happens currently for properties which rent for over £100k per annum.
I will be surprised if they get the bill through before parliament goes on holiday.
What is the rental value of your property and in what area of London? When you take into account your void period/inventory reports etc I imagine it will be double the amount you said.
You may want to see if a clause can be added that a proportion of your reletting fees will be covered in the event the break clause is used. I would attempt to have a proportionate payment which is x% at 6 months and drops to 0% at 1 year
Nothing wrong with a tenant wanting to protect themselves. I've rented with 2 and 6 month break clauses before, never had an issue.
If it's such a bother, tell your agent that's it's two months or nothing and to get another tenant that's a bit more desperate and better suited to your needs.
A 6 month initial contract is usual with new tenants.
Hello, break clauses are standard when renting. As this is the first time the tenant has rented on their own, they need to make sure the property works for them. Can they get to work quickly? Is the space enough or too much? Do they feel safe being alone?
Break clauses allow for leniency. Remember, this is someone's potential home; it needs to work for them, and they may not want to be stuck in a long contract in a place they aren't happy with.
Don’t do the six months break clause. If your tenant leaves after six months you’ll have to pay your EA fees for finding new tenants and new tenancy agreements. That would eat into your rents expected for the full year.
Rent should be higher with break clause.