A tenant has approached the YourProperty experts with a general query about the circumstances in which she would be entitled to terminate her lease prematurely.
The reader would like to know if, for example, she signed a one-year lease agreement and her financial situation suddenly worsened whether she could give a month’s notice as a result of her changed circumstances.
In that situation, she would like to know whether the landlord would be entitled to hold her to the agreed one-year period.
See the reader’s question here.
A lease agreement requires a number of essential aspects to be addressed. One such aspect, which the parties must agree to, is the term of the lease.
This can be a fixed period, such as the one-year example, or from month to month where the period is not fixed.
In the instance mentioned by the reader, the lease would be fixed for a specified period but a month-to-month lease may be preferable if she believes she may not be able to afford the rental in future.
One potential problem the reader may face with a month-to-month lease is that it typically operates in favour of one of the parties.
While she as tenant could terminate the lease on short notice, the landlord is equally entitled to do so.
Should the landlord terminate the lease at an inconvenient time, the reader may find herself having to search for somewhere else to live in a hurry.
Having a pre-determined rental period can be reassuring to both parties.
The landlord is assured of rental for the period, which could cover the mortgage bond instalments on the property.
Because a lease is a contract, the parties could agree to certain terms that would put the reader in the position she requires.
The parties could, for example, agree to the lease running for the one-year period but subject to termination on one month’s notice.
They could also stipulate the qualifying circumstances or that no reason is required at all.
This provision could operate unilaterally in that the same right does not extend to the landlord.
Accordingly, the terms would not allow the landlord to terminate the lease on notice other than, for example, in an instance where the tenant is in breach and fails to remedy the situation.
It would be advisable to record such a deviation to the usual provisions in writing to avoid any dispute later on.
It is unlikely that the landlord would agree to such a provision as it would allow no real security but it may be acceptable where the tenant pays a premium amount and therefore has greater bargaining power.
If the reader’s financial fears are realised during the term of her lease, she should approach her landlord to discuss its early termination.
Alternatively, she could negotiate a reduction in rental for the remaining period.
It may also be in the landlord’s interest to accept a reduced rental, rather than have a tenant missing payments and being forced to resort to expensive legal action to get his money.
If the landlord accepts the reduction, the parties may agree to extend the lease to allow the landlord to recoup any reduced rental over a longer period. This is of course assuming that the reader’s position will improve.
Should the landlord decide to terminate the lease, he may not find a new tenant immediately, which could leave him with no rental income for a few months.
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