Here is a question to the blog clinic from Katherine (not her real name), who is a landlord.
My potential tenant is pushing back on a 2 month’s notice period for a fixed-term contract. They’ve suggested it’s unlawful (it isn’t).
I’m a private landlord, and my previous tenants were happy with this mutual notice period. However, these guys are quite aggrieved.
In my opinion, it’s equitable for both parties to benefit from 2 months’ notice during a fixed term. Any compelling reasons to help my tenants see I’m not being unreasonable and that this is common?
Answer
I think the tenant is getting confused between the notice period in a fixed-term contract and notice periods in a periodic tenancy.
As far as the fixed term contract is concerned, this is what is known as a ‘break clause’ and is a clause allowing the landlord and the tenants to end the fixed term early.
You don’t HAVE to have a break clause – many landlords don’t, but if you do, they have to be the same for both parties or more favourable to the tenant.
So your proposed break clause notice period sounds fine to me.
However, when the tenancy is a periodic tenancy, the tenants’ position ‘at common law’ is that they can end the periodic tenancy on giving notice of one ‘period’ – which for most tenancies will be a month as most tenancies have a monthly rent.
However, if landlords want tenants to leave, they will normally serve a notice under section 21, where the notice period will normally be two months.
Some landlords think this is unfair and try to put clauses in the tenancy agreement saying that the tenants must give two months’ notice. THAT clause will be invalid under the unfair terms rules.
However, your proposal for a break clause during a fixed term is fine.
Maybe if you explain this to the tenants, they will understand. You could also say to them that if they don’t accept this notice period, the tenancy will have no break clause at all!
If you are a landlord – what notice period do you have in YOUR tenancy agreement?
Hi Tessa,
what is the legal basis that makes the requirement for the tenant to give two months notice under a contractual periodic tenancy unenforceable or unlawful?
Regards
Bianca
This is assuming that the ‘period’ of the tenancy is monthly. Under common law, the notice period for a periodic tenancy is one full period (ending on the last day of the period). So I suppose more accurately the notice period is between one and two months depending on when in the month the notice is served.
However, if you have a tenancy agreement clause requiring two months’ notice, this would be more than the tenant would be expected to serve under the common law and so would be unfair and therefore unenforceable under the Unfair Terms rules – now part of the Consumer Rights Act 2015.
I’m not sure I understand why a two-month notice clause in the contractual periodic tenancy would be unfair while the same period break clause in the initial term of the same contract would be fair.
A contract that creates a periodic tenancy essentially does so from the start date, it’s just that the first period length is different to the length of the periods that follow on from it.
It’s all the same tenancy, so it seems odd that the external “rules” that apply to it would change for part of it.
I suppose it would probably be OK in a contractual periodic tenancy. But it would almost certainly be unfair in a statutory periodic – assuming the period is monthly.
I agree it’s a bit of a nightmare!
It’s understandable that the landlord would want a mutual two-month notice period in a fixed-term break clause, as it would ensure that both parties are able to end the lease agreement on equal terms. However, from the tenant’s perspective, a shorter notice period may be more desirable, as it would allow them to vacate the property sooner in the event that they need to leave. Ultimately, it will be up to the tenants and landlords to negotiate a notice period that is mutually agreeable.
Surely Common Law applies to both Contractual and Statutory Periodic tenancies.
Have you assumed this landlord is alluding to the break-clause or did this landlord elaborate in text that you haven’t printed. Despite their wording, it seems very possible to me that this landlord is really talking about the contractual periodic that would commence when the fix expires. (and unless / until the fix is renewed).