I am a tenant and want to leave my current address by exercising a break clause, if I may, but I am unclear when I am supposed to exercise. The tenancy agreement is an Assured Shorthold Tenancy Agreement, fixed term 12 months…

“term shall be from and including 15th August 2011 to and including 14th August 2012 and then monthly periodic but may be ended earlier by either party giving notice under clauses 31.1 and 31.2“.

First issue is that there is no 31.1 and 31.2, or indeed any 31.x- the last clauses in the contract are infact 30.1 and 30.2 under the heading “Break Clause”. It seems obvious to me that this was an error and it was supposed to refer to 30.1 and 30.2 not 31.1 and 31.2 since without any 31.x clauses the prior statement was meaningless.

Anyway, here is 30.2 which relates to when tenant can supposedly give Break Clause Notice (if valid):-

“The Tenant may give the Landlord at least 1 months’ written notice not to take effect until after the end of the fifth month of the Tenancy and not to expire any earlier than the end of the first six months of the Tenancy or thereafter, of his intention to leave the property by serving notice upon the Landlord in accordance with clause 29.1. Such notice must also expire at the end of the relevant period, being the day before rent normally falls due, which is the 14th of the month. Upon the expiry of this notice this Agreement shall cease except the Landlord or the Tenant can pursue their legal remedies against each other for any breach of any pre-existing rights under the Agreement apart from the pre-exisiting right to a fixed term contract which is subject to the break clause“.

Since the fifth month ended on Jan-14, my understanding is that I would not have been able to give notice until Jan-15 at the earliest. And the notice would have to expire at least one month later, which could be Feb-14 or Mar-14 or indeed the 14th of any month?

Since we have passed the Jan-15th date, am I still able to give notice at any time until the fixed term ends provided that the notice expiry ends on the 14th of a month, since now in late January the next one being Mar-14?

Or this break clause a “one shot” break and I have missed the opportunity to give notice? I am really confused by the wording, especially the use of the word “thereafter” in the first sentence of 30.2!

Thank you in advance for any help!

Hmm.  Thats a bit of a dogs dinner of a clause and no mistake.  I suspect it could fall foul of the Unfair Terms in Consumer Contracts Regulations 1999 save that it would be unfair on you.  So if there was any kind of dispute about its interpretation, the Judge should chose the interpretation most favourable to you.

However from my reading of it, it sounds as if so long as your notice neither takes effect nor expires before the fifth or alternatively the sixth month, you should be OK.  Make sure you give not less than one months notice expiring on the next 14th day of the month.

Although you could add a sort of ‘saving wording’ in your letter.  Saying something along the lines of  ’If this date does not comply with the break clause at clause 30.2 of my tenancy agreement, then the earliest date which will satisfy the requirements of this clause.’

It might be an idea to request the agents to respond with in 7 days confirming the date that you have provided is correct, and explain that you find the clause difficult to understand.  If the agents have been difficult in the past, serve it by hand and take an independent witness with you.

This problem involves the The Unfair Terms in Consumer Contracts Regulations 1999.

As a background, I live in a charity run private student halls of residence. The property is an unlicensed mandatorily licensable HMO, but the Local Authority has a “don’t ask, don’t tell” policy (the property is extremely substandard and could not be licensed in any event).

The tenancy agreement purports to be a licence to occupy via an obvious sham clause rather than the common law tenancy that it obviously is, and indeed the landlord has a habit of allowing non-students to stay in the property which you could argue forfeits the “student accommodation” status and makes the tenancy an AST.

The Landlord is increasingly militant that the rented property is theirs, not the tenants. As part of this they have inserted clauses into the contract that permission must be sought in writing before having overnight guests, and that additional rent is due for their stay. The request form asks for personal information such as the guests next of kin.

This is obviously not legal, but I have no idea how to challenge it short of violating the clause and precipitating an illegal eviction (which has happened for precisely this reason – again, the landlord does not recognise the authority of the courts over “their” property). Is it a matter for the local trading standards? Who does enforce the The Unfair Terms in Consumer Contracts Regulations 1999?

The regulations are enforced by the Office of Fair Trading and also by Trading Standards Offices.  However if you are right and the landlord and LA are hand in glove, you would probably be best referring this to the Office of Fair Trading.  You can read a bit about it on their website here.

If you decide to report your landlord to them, you will find contact details on the contact page here.

A well known example of what they do is the litigation relating to Foxtons agency contracts which the OFT considered unfair but which Foxtons refused to alter.  The OFT brought proceedings against them which they eventually won.  You can read about the Foxtons case on this blog here.

Let us know how you get on!

The case is Chesterton Global Ltd v. Finney, Lambeth County Court, 30 April 2010 (it has been previously reported on the Pain Smith blog).

Mr Finney’s property services management contract with Chesterton Global contained a clause relating to commission on renewal of the tenancy. Mr Finney failed to pay it and Chesterton sued.

The case came before District Judge Wakeham, who found that the clause was unfair under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR). The following points were made:

• Only consumers can benefit from this act. However, although the property was bought by Finney as an investment property, he only owned one such property, and the Judge held that he should be treated as a consumer.

• There was a ‘significant imbalance’ in the rights and obligations of Chesterton and Mr Finney which operated to his disadvantage. The tenancy agreement prepared by Chestertons contained an option to renew which would leave the landlord tied to a renewal at the tenant’s whim at a rental to be fixed by Chesterton’s themselves. The landlord would therefore be paying a commission on the basis of decisions made by the tenant and Chestertons.

• The relevant clause, although it was not hidden, was not written in clear language, and had not been sufficiently drawn to Mr Finney’s attention or explained to him before he signed the agreement. This was particularly important because of the substantial payments which would be due under the clause.

As well as confirming that the clause was unenforceable, the Judge also ordered that Chestertons repay previous commission paid. Pain Smith consider that this was a wrong decision. Their view is that a breach of the UTCCR makes a clause unenforceable, but that money paid under an unenforceable clause is not recoverable.

This may perhaps be technically correct, but if so, is extremely unfair. I suspect many Judges will agree and will try to interpret the law so that they can order money paid under an unfair clause to be repaid.

Agents would be well advised, if they want to include this sort of clause, to make the commission reasonable, and payable for a limited period only, such as two years, as in the Foxtons contract which was accepted by the OFT.

Do you know of any other cases where agents renewal commission has been looked at by the courts under the UTCCR?

OFT Victory in Foxtons unfair contract terms case.
This is my initial report on the case, and explains the judgment.

The OFT v. Foxton case – commission on renewals
This item looks specifically at what the judgment says on the question of commision on renewals, with reference to the status of these clauses now, and quotes extensively from the wording of the Judgement.

Letting agents – instead of renewal fees
This post discusses what some dishonest agents are doing to replace the renewal commission they are losing, and discusses also the ‘fiduciary duties’ of agents (which seem to have been forgotten by many agents).

Advice for landlords seeking to recover commisison post OFT v. Foxtons
This post gives some guidance to landlords on what they can do now (ie as at July 2009 to the date of this post) if they think they may have a claim against their agents as a result of the Foxtons case.

Foxtons to appeal decision in OFT unfair terms case
This announced the news that Foxtons intended to appeal the decision.

Foxtons withdraws appeal
Looking at the reasons why Foxtons decided not to proceed

Foxtons case concluded – now is the time for agents to review their agency agreements
Summing up and final comments.

An interesting case. It is shame that we could not have the benefit of the Court of Appeals views, as cases on the Unfair Terms in Consumer Contracts Regulations are rare and it is always good to get some guidance. However this is a very useful decision, and not just for agents contracts.

As the value of money keeps going down and the cost of things keeps going up, your landlord is at some stage going to want to increase your rent.

That’s understandable, but if you have just received a letter from your landlord setting out a whopping big increase, your first thought (or maybe your second) is going to be “Can he do this?” The answer will depend on how he does it.

• If you have been in the property a long time and have a fair rent registered, the answer will be ‘No’.  Rent increases can only be set by the Rent Service.

• If you have an assured shorthold tenancy, your fixed term is ending and your landlord wants you to sign a new tenancy agreement at a new rental, the answer is ‘probably’. Because if you don’t sign, your landlord can end your tenancy, and (eventually) evict you.

• If your tenancy agreement has a rent review clause AND the landlord is following the procedure in the clause, then the answer will be ‘yes’. Always assuming the clause is not void under the Unfair Contract Terms Regulations.

• If your AST fixed term has ended, and your landlord has served a properly drafted notice of rent increase on you, the answer is ‘yes’ unless the new rent is higher than the market rent value for your property AND you apply to the Rent Assessment Committee for the decision to be reviewed within the one month time limit.

• However if you are at the start or part way through your tenancy fixed term, there is no rent review clause, and your landlord has just sent you a letter saying your rent is going up, the answer is ‘no’! You can write to him saying you won’t be paying the increase as it is invalid, and suggest he take legal advice.  However beware – if you start paying the new rent, you may be deemed to have accepted it, and will then be bound by the increase.  So if you don’t agree with it – don’t pay!

Have you experienced problems with your landlord trying to increase your rent when they are not entitled to?  Do you have any tips for readers?

See more help for tenants on Landlord Law.

(Photo by Darren Hester)