Navigating the complexities of tenancy agreements extends far beyond the initial signing. While the original contract sets the stage, the realities of life often warrant the need for adjustments. This could be extending a tenancy, facilitating an early departure, or implementing a break clause.
Understand what is needed from both parties for each and how to navigate these difficult moments with ease.
The tenancy agreement outlines the tenancy terms and serves as a legally binding contract between the tenant and landlord. This document should include information on how much notice both the tenant and landlord need to give to end or extend a tenancy agreement.
Most rental properties are Assured Shorthold Tenancies, of which there are two types:
Many tenancy agreements state that a fixed-term tenancy will automatically become periodic at the end of the term. Alternatively, the landlord can ask the tenant to renew the fixed-term contract by signing a new tenancy agreement facilitated by the letting agent.
If a tenant leaves the property before the end of the tenancy, they must continue to pay rent until the end of the fixed term.
This is all set to change following the implementation of the Renters' Rights Bill into law as it sets out to abolish fixed-term tenancies and replace them with periodic tenancies. This applies to everyone, no matter when they signed on to their tenancy.
In this case, a rolling tenancy can be ended at any time but will require notice (usually two months). This is good in terms of flexibility, but there is uncertainty for both parties.
If a tenant decides to leave their tenancy early, there are many things to consider before proceeding.
First, it's essential to review the tenancy agreement to understand any specific requirements outlined in the contract. There may be penalties that should be enforced for early termination. These can vary depending on local laws and lease agreements, so seeking legal advice can be beneficial.
The tenant should detail the reasons why they wish to terminate the tenancy early. The landlord should assess these and whether early termination is reasonable. Open communication with the tenant should be kept throughout the process to avoid any crossed wires. A notice period should be agreed upon so the landlord can find suitable alternatives. Once these have been finalised, this should be documented in writing. Include dates, the move-out process, and any financial implications.
Once this is finalised, the property manager should begin advertising the property for new tenants and make any necessary repairs.
A break clause allows tenants or landlords to end a tenancy agreement early after a specified period, allowing for a certain amount of flexibility in a fixed-term contract. To activate the clause, both parties must adhere to the notice period outlined in the contract.
The break clause should be clearly outlined in the tenancy agreement. There should be no room for misunderstandings or confusion on the part of the tenant. As with early departures, a landlord's mind should be on record keeping. All communication with tenants about the possible use of the break clause should be recorded so they can easily be referred back to.
When putting together the tenancy agreement, be mindful to word everything clearly. If there is any ambiguity in what is written, tenants could dispute this later. Landlords should also be sure to adhere to everything outlined in the tenancy agreement. If they fail to fulfil their role correctly, this could invalidate the break clause.
If a landlord wishes to invoke the break clause themselves, they should review the tenancy agreement to ensure they are acting in the right way, then provide written notice to the tenant so they have time to make other arrangements. If the landlord has any concerns or questions about the process, they should consult a legal entity for advice.
However, break clauses in tenancies will no longer apply once the Renters’ Rights Bill has been introduced. This is because the bill will give tenants the right to give two months' notice to end a tenancy at any time, effectively ending the need for break clauses in agreements.
Managing tenancy agreements effectively requires a thorough understanding of the various options available, from extensions and early terminations to the strategic use of break clauses. Clear communication, meticulous record-keeping, and adherence to legal guidelines are paramount for landlords and tenants.
By understanding the intricacies of these processes, both parties can minimise conflict and miscommunication.
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