We often get asked about break clauses on our telephone helpline service. Break clauses are not uncommon in tenancy agreements and give a contractual right for either the landlord or tenant (or both of them) the option to end their fixed term tenancy early, usually subject to certain conditions.
It is often the case that once a break clause has been triggered parties amicably part ways. But what happens when the landlord or tenant change their mind and decide they want to withdraw their notice?
It is important to remember that the Court construes break clauses strictly. Therefore, the requirements of the break clause in terms of the correct method of serving notice and the date to give notice must be observed. Not doing so will make the break notice ineffective and the other side is under no obligation to alert you to the error. Equally, if a break clause is badly drafted so that it cannot be used then it will be useless.
Triggering the break clause
If the landlord or tenant triggers a break clause, they cannot then withdraw that notice. Put simply, upon the expiry of a valid break notice, the original tenancy ends. If the parties than have a change of heart and decide that the tenant can remain in the property, they should formally enter into a new tenancy agreement. If they do not do so then there will still be a new implied tenancy but its terms will be in doubt.
Where a break clause is served and it is then withdrawn it is very important that a new tenancy is entered into. Key clauses that were individually negotiated may not automatically apply if an implied tenancy is created- for example a guarantor may not be liable for rent arrears under the new agreement. Therefore, clauses should again be negotiated where the parties have had a change of heart.