15th October 2019
Q: My tenant would like to end her tenancy early. What should I do? The tenant has only just recently signed into a Fixed Term Tenancy; however, she is struggling financially.
A: Ending a tenancy agreement early depends on having a break clause or an understanding landlord. This is unfortunately a fairly common issue for landlords, and we have been asked many times as to what the responsibilities are of both.
What is a Fixed Term Tenancy?
A Fixed Term Tenancy is a tenancy agreed for a term – in most cases as an Assured Shorthold Tenancy – this is between 6 months to 3 years. We are seeing a definite increase in the demand for longer term tenancies. The tenancy will have an agreed start date and end date, and unless there is a significant breach of the agreement, or the agreement contains a break clause, this agreed term is contractually binding on both parties, and may be enforced by either party.
A Fixed Term Tenancy may include a break clause allowing both to terminate the agreement early. If you give a Fixed Term Tenancy with no break, you will only be able to seek possession if one of the grounds for possession in the Housing Act 1988 apply, and if the terms of the tenancy allow for it to be ended on any of these grounds.
Ending a tenancy agreement early with a break clause
A break clause is a term in a Fixed Term Tenancy agreement, which allows either person the right to end the agreement before the end of the agreement. Having a break clause can give both parties flexibility to end the agreement early. At times tenants and landlords like the flexibility provided by a break. It seems sensible when including a break clause, that both parties can give the same notice period, for example two months.
Mutual agreement between landlord and tenant
In the situation above you are not under any obligation to agree to end the tenancy agreement early with the tenant. Regardless of the tenant’s personal circumstances they are contracted to pay the rent to you for the remainder of the fixed term.
We would imagine though, that most people would prefer not to have a tenant living in their property who is struggling financially, and always having to worry whether the rent will be paid on time every month. It is always best if one can have a positive relationship with one’s tenants, so we would suggest that you choose to work with your tenant to arrive at an agreeable solution.
As part of our full management package, we have worked with many landlords and tenants to reach a solution to end a tenancy agreement early. This usually requires the outgoing tenant to continue to pay rent until a new tenant is found and they would also agree to pay for the cost of finding a tenant. Once a new tenant is found and referenced, the landlord would agree to an early termination date.
