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What is a Break Clause in a Tenancy Agreement?

  • 08-09-2010 10:49AM
    #1
    law_lady
    Registered Users, Registered Users 2 Posts: 74 ✭✭


    Hi, just curious, I'm studying for FE1s at the mo and in my procrastination, I decided to read my lease to see whether all this contract law I've been reading is of any practical use, and I'm left wondering, what's a break clause? I see in the agreement "Break Clause - No".

    Does that mean that even if one wanted to give notice and move, they'd be stuck in the lease for the full fixed term, i.e. 12 months or whatever it may be? Not planning on moving myself but just curious, as I always thought a tenant could get out of a lease by giving reasonable notice (say a month or two). Is that not the case? I've read that most landlords want a break clause exercisable at their option only after 6 months, to get around Part 4 of the Res Tenancies Act 2004, but what's the story for tenants?


Comments

  • #2
    triskellion
    Closed Accounts Posts: 37 ✭triskellion


    A contract is for a specified period of time. The break clause allows for early termination predicated on specific conditions being met (notice period, activation charge etc). If the window of the break clause is passed by the party in question (be it lessor or lessee) the contract runs to the full period.
    Basically you sign a lease for 5 years and if you want out and you've no break or has a 1 year break with 6 month notice and passed that, then you will have to assign your interest, subject to landlord consent.


  • #3
    Victor
    Registered Users, Registered Users 2 Posts: 78,837 ✭✭✭✭Victor


    Essentially its a set of rules if someone wants out, instead of the other party applying to a court for damages, the rules in the contract are followed. I imagine the rules for liquidated damages would apply.

    Its more common on commercial contracts that might be for 35 years. There might be a break option at 10 and 20 years or even every five years.

    Break options in residential properties are only common / mentioned in the last few years since the RTA 2004.


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