Termination and last month rent

[argo]

Assured Shorthold Tenancy Agreement

Termination clause reads:

This Agreement may be terminated by either party, the Landlord to give at least two months notice in writing and the tenants to give at least one month's written notice, to expire at any time.

I am the tenant and gave a one month notice to expire before the end of tenancy month.

How can I make sure I won't have to pay for the days between expiration date and end of tenancy month? What are the possible implications of changing the amount in standing order for the next payment?

 

The rent is payable monthly in advance. Relationships with the landlord are pretty tense unfortunately.

 

Thanks for your comments/ideas.

[MrShed]

Have you not given a full rent month notice?

 

Either way, I would probably do as you suggest and change the standing order. Usually, I would say you are liable for those days anyway, as you normally need to give notice to expire at the end of a rental period("tenancy month"). However, the wording of that clause strongly implies there is no requirement to do this.

[argo]

I have given a month notice in the middle of a rental period to expire in the middle of the next rental period. I did this because the contract allows it. Therefore I don't think I am liable for those days.

[MrShed]

As I say, I agree

[Ed999]

The parties can end the tenancy by agreement, amounting in effect (if it is a fixed term tenancy) to a surrender, if there is genuine agreement. But where the tenant has given notice to end the tenancy, this implies that there is no such agreement.

 

The parties cannot contract-out of any statutory requirements. If the tenancy agreement purports to do so, that part of it is ineffective.

 

If the tenancy is a fixed term, the tenant can exercise the "break" clause he has mentioned, to end the fixed period early, provided he complies with the contractual requirements, if any. But we here cannot tell what those requirements might be, since we have not seen the entire agreement.

 

If the tenancy is a periodic tenancy (with no initial fixed term, or the fixed term has ended), then the common law requires the tenant to give at least one full rental period's notice, expiring on the day before a rent day.

 

It is unclear whether the parties can contract out of this requirement. It might be prudent, therefore, to give that common law notice, in writing.

 

As this is not an ordinary situation, the tenant should take legal advice from a solicitor, who can consider the legal effect of the tenancy agreement as a whole, in the light of the tenant's copy of the written notice he has given, and advise him as to his legal position.

 

The tenant should also read this thread for additional information: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/116385-shorthold-tenancy-posession-eviction.html

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[MrShed]

It is unclear whether the parties can contract out of this requirement. It might be prudent, therefore, to give that common law notice, in writing.

 

I dont think there is anything unclear - it doesnt infringe on anyones statutory rights, so fairly straighforward to contract out of it.

[Nightmare4banks]

I would just like to state that I totally agree with Mr.Shed here.

[Ed999]

I dont think there is anything unclear - it doesnt infringe on anyones statutory rights, so fairly straighforward to contract out of it.

 

You can't contract out of the law, so it might be prudent therefore to give the necessary common law notice.

 

As this is not an ordinary situation, the tenant should take legal advice from a solicitor, who can consider the legal effect of the tenancy agreement as a whole, in the light of the notice the tenant has given.

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[MrShed]

In what way is this attempting to contract out of the law?

[Ed999]

In what way is this attempting to contract out of the law?

 

The tenancy agreement is attempting to agree the rules for the giving of a notice by the tenant to terminate the tenancy.

 

Since the rules in question are laid down by law (mentioned here: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/116385-shorthold-tenancy-posession-eviction.html), the tenancy agreement is attempting to contract-out of the law.

 

This is probably not possible. The common law rule is that the tenant must give one rental period's notice, expiring on the day before a rent day, subject to the statutory minimum period of 28 days notice.

 

Although anything is possible on a surrender, where - as here - there is instead a termination by notice, the common law rules (as modified by statute) as to the period of notice required must be complied with.

 

Accordingly, in my opinion it is possible that the Court might decide that the o/p has failed to give the correct notice to terminate the tenancy, and that it was thus not terminated by the notice which he gave.

 

The prudent course of action is always for the tenant to comply with the common law rules and give the correct period of notice.

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[MrShed]

I disagree, of course, but will agree to disagree

[Joa]

It seems like this is a standard "early break" clause. OP has given required notice. Bish bosh, the tenancy is no more (upon expiry of the notice)

[Aequitas]

Surely express agreement overrides the common law here.

 

Woodfall, Aldridge or Hill & Redmond must have something to say on the matter. Anyone got access to any of them to have a look?

[Joa]

From Shelter: Many fixed term agreements contain a 'break clause', which allows you to end the agreement before the fixed term runs out.

[Ed999]

In theory, Joa. But we don't know what the terms of this tenancy are.

 

 

The tenant cannot end a fixed term tenancy during the fixed term, unless:

 

1. The tenancy agreement contains a "break clause", i.e. a provision expressly authorising the tenant to give notice ending the tenancy during that fixed term (typically the fixed term will be six months); or

 

2. By a surrender of the tenancy, with the landlord's agreement.

 

A fixed term tenancy can't be terminated early by the tenant unless the agreement allows this or the landlord agrees. If the tenancy does not allow this and the landlord does not agree to an early termination, the tenant will remain bound by the agreement and liable for the rent for the whole period.

 

If the tenant wrongfully leaves early, the landlord can sue for the rent due for the remainder of the fixed period. In that case the landlord does NOT have to mitigate his loss by re-letting the premises.

 

 

I request that Argo, the original poster, clarifies the facts of this situation, by posting here the additional information specified in this thread: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/118080-questions-new-posters.html

[MrShed]

- The agreement clearly DOES have a term to this effect Ed.

 

- Interested on what basis you state that the landlord does not have to mitigate his losses?

[argo]

I request that Argo, the original poster, clarifies the facts of this situation, by posting here the additional information specified in this thread: http://www.consumeractiongroup.co.uk/forum/landlords-tenants/118080-questions-new-posters.html

 

Thanks to all for the contributions to this thread.

The agreement is in writing. Six month fixed term not expired yet. Rent is payable monthly.

The break clause and notice details are given in my first post.

[Ed999]

Mr Shed, in the light of Argo's further information you are probably correct, but if the fixed term had already expired you would probably be wrong.

 

To clarify, my earlier posts approached the problem on the basis that there was no fixed term, or that it had ended, since the o/p had not stated that there was one.

 

The special rules of a "break clause" cannot apply to a periodic tenancy, as they only apply to a fixed term tenancy.

 

 

Argo, if you have complied strictly with all of the requirements in the "break" clause in your tenancy agreement, then the break notice that you gave should be effective, provided that -

 

(a) the landlord received the notice at least one clear calendar month before the date stated in it as the last day of the tenancy;

 

AND

 

(b) you do in fact move out on (or before) the date on which the notice is expressed to take effect, and also return the keys within that time.

 

 

Mr Shed, as to the point I made about the tenant wrongfully leaving early I rely on this thread:

 

http://www.consumeractiongroup.co.uk/forum/landlords-tenants/116844-tenant-leaves-early-whether.html

 

If the break notice which Argo has given is not valid, for any reason, then that is the position in which he will find himself.

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.

[MrShed]

How can a break clause or similar only affect a fixed term tenancy? I would be interested to see the relevant law stating this? Unless otherwise stated, the terms in a fixed term tenancy all apply during a periodic.

 

With regards to the case law, I can understand the reasoning. However, I personally would stop short of saying that the landlord DOES not have an obligation to mitigate losses, but would say probably does not. I have said my reasoning for this before - on two counts, first of all I think the court got that decision wrong, pure and simple, and AFAIK there is a subsequent appeal in the pipeline. Secondly, I would strongly argue that the case law does not apply to residential tenancies, being as it is a case law on a commercial tenancy, and I would argue this mainly because the residential tenancy puts it in the realms of consumer contract law, and in consumer contract law losses must be mitigated where possible.

 

However, I am waiting to see a definitive answer to the residential tenancies part!

[Joa]

Hi Mr Shed: I have had a chat with a housing solicitor about the duty to mit losses, because it bothered me. He said that it is still a bit of a gray area as there is no specific residential tenancy caselaw but the folks in a legal comunity don't see why the caselaw shouldn't apply to resid ten too. See Landlord and Tenant: A Contractual Relationship? - terminology used doesn't distinguish between residential and commercial tenancies.

Someone here said that there is a lack of knowledge about this caselaw amongst landlords and agents and we should still push the duty, so that's what I am doing.

 

Now, the "break clause"; i think the break clause applies only to fixed term tenancy because periodic tenancies can always be ended by the landlord or a tenant without any clauses anyway, whilst the fixed term tenancy can only be ended earlier with a break clause (and some other mutually agreed actions). The "break clause " is therefore not necessary in periodic tenancies.

Do I understand it right?

[MrShed]

Not neccessary, but entirely lawful to put in. And indeed, can be neccessary, as shown in the example being discussed here. I fail to see how the landlord cannot give extra rights to the tenant over and above what the law states, as this is exactly what is being discussed basically.

 

Argo, by the way, sorry that this discussion is going slightly off topic!!

[argo]

Argo, by the way, sorry that this discussion is going slightly off topic!!

 

That's all right. It helps to understand the logic of applying agreement clauses and law ones.

[Ed999]

How can a break clause or similar only affect a fixed term tenancy?

 

Because a clause which is included in the agreement in order to end the fixed term early can have no application once the fixed term has ended.

[MrShed]

It clearly does in this case. So again I ask the question: HOW, legally, can a break clause or similar only affect a fixed term tenancy?

[Ed999]

You misunderstand. A "break" clause is inserted in a lease in order to end the fixed term early. Where the tenant holds over in possession after the expiry of the fixed term the break clause becomes of no effect, it being impossible to give an early termination notice once the lease has ended.

 

In the case of residential premises, a statutory tenancy arises (under the Housing Act 1988 ) from the act of the tenant holding-over in possession. This statutory tenancy replaces the contractual tenancy, although it incorporates some of its terms, such as the amount and period of the rent.

 

The contractual tenancy has ended. It is no longer of effect. Its terms have ceased to apply.

 

You simply asked how it is that a "break" clause only affects a fixed term tenancy, and that is the answer. Argo's position is different, as he has now confirmed that the fixed term has not ended.

 

 

 

Advice & opinions on this forum are offered informally, without any assumption of liability. Use your own judgment. Seek advice of a qualified and insured professional if you have any doubts.