What You Need to Know About 6-Month Break Clauses in 12-Month Tenancy Contracts

Understanding a 6-Month Break Clause in a 12-Month Tenancy Contract: A Guide for Landlords and Tenants

When entering a tenancy agreement, both landlords and tenants may seek flexibility for various reasons. One common way to introduce such flexibility is through a break clause, which allows either party to terminate the contract before the full term is up. A 6-month break clause in a 12-month contract is one of the most frequently used options in the UK, giving both parties the right to end the tenancy after 6 months rather than waiting for the entire 12-month period.

This article will explain what a 6-month break clause entails, how it works, and what to consider when including one in a tenancy agreement. Whether you are a landlord or tenant, Fraser Bond is here to help you navigate the intricacies of break clauses and ensure your property-related needs are met efficiently.

What is a 6-Month Break Clause?

A 6-month break clause in a 12-month tenancy agreement is a provision that allows either the landlord or the tenant to terminate the tenancy early—usually after 6 months—without having to wait for the full 12-month term. This type of clause is particularly useful when one or both parties need flexibility due to uncertain future circumstances, such as job changes, relocation, or property market fluctuations.

For example, if you enter into a 12-month rental contract in January, but there's a 6-month break clause, either you or the landlord can give notice to end the tenancy in July.

Example of a 6-Month Break Clause in a 12-Month Contract

Below is a sample of how a 6-month break clause might be worded in a tenancy agreement:

Sample Break Clause:

"Either party may terminate this Agreement by giving not less than two months' written notice to the other party, such notice to expire no earlier than six months from the commencement of this tenancy. The notice must be in writing and must be served by either party to the other after the expiration of the first four months of the tenancy. If such notice is served, this Agreement shall terminate on the date specified in the notice, subject to any additional obligations or conditions as outlined in this Agreement."

How a Break Clause Works in Practice

A 6-month break clause doesn't allow immediate termination at the 6-month mark. Instead, the tenant or landlord must provide advance notice, typically two months. Therefore, if a tenant decides they want to leave after 6 months, they must inform the landlord by the fourth month to vacate by the sixth month.

Example:

• You sign a 12-month tenancy starting January 1st.
• A 6-month break clause is included.
• If you want to leave the property after 6 months, you must serve notice by May 1st (two months’ notice before July 1st).

This timeline ensures the other party has time to prepare, whether it’s finding a new tenant or making alternative living arrangements.

Key Considerations for Tenants and Landlords

For Tenants

• Flexibility: A break clause provides flexibility, especially if you anticipate potential changes in your personal or professional life that could affect your housing needs.
• Notice Period: Be sure to understand the specific requirements for serving notice, including deadlines and the form of communication (e.g., written notice, email, etc.).
• Liabilities: Even if a break clause is exercised, you may still be liable for rent and other contractual obligations (like property condition) until the tenancy officially ends.

For Landlords

• Minimising Risk: A break clause can be a useful tool to manage your risk, particularly if you are uncertain about your tenant or future plans for the property.
• Re-letting Opportunities: Keep in mind that allowing tenants to leave early may mean you’ll need to find a new tenant earlier than expected. Fraser Bond can help find reliable tenants quickly, minimising void periods.
• Legal Compliance: Ensure your tenancy agreement complies with current regulations, including those regarding notice periods and deposit protection. Fraser Bond’s team of legal experts can review contracts to make sure they are compliant.

Fraser Bond: Your Trusted Property Partner

Whether you're a landlord looking to draft a tenancy agreement with a 6-month break clause, or a tenant seeking advice on how a break clause works, Fraser Bond is here to assist. With our extensive experience in property management, we offer expert advice on tenancy contracts, legal obligations, and tenant placement. We take the stress out of property management by ensuring all legal requirements are met, providing peace of mind for both landlords and tenants.

Get in touch with Fraser Bond today to learn more about how we can support your property needs.