How can I end my tenancy?

Examining the legal protection and tactics advisers can use when a client wants to end their tenancy

Changes in circumstances due to Coronavirus might mean some people now need or want to move. A common problem the Expert Advice Team at Citizens Advice is seeing are from people who’ve moved out and think they ended their tenancy at that time, but are later contacted by a landlord or agent who says rent is still owed — sometimes weeks or months after they have left.

When someone enters a tenancy they’re liable for the rent until they end the tenancy properly. When someone enters a fixed term tenancy agreement it means:

• they and any joint tenants are usually tied into it for the whole fixed term
• they’re liable to pay the rent and other obligations and liabilities under the tenancy — for example, paying bills or reporting disrepair

for the whole fixed term. Liability might extend beyond the fixed term if a tenancy doesn’t end in one of the limited ways the law allows.

This article focuses on ending assured shorthold tenancies — usually private sector tenancies. Some social housing tenancies use them too. Use the tenancy flowcharts to check the type of tenancy your client has.

Can I move out during the fixed term?

If a tenant just moves out this won’t automatically end the tenancy and their liability to pay rent, even if they tell the landlord in writing they are leaving.

Leaving without taking steps to end the tenancy properly risks the tenancy continuing. This might build up significant debt that the tenant (and any guarantor) could then be pursued for.

If your client wants to end the tenancy early during the fixed term there are two main ways that they can do this:

1. service of a valid notice in accordance with a break clause
2. implied or express surrender

Break Clause

A break clause is a term in a tenancy agreement. It gives the landlord and tenant the right to end a tenancy before the fixed term period expires.

Some break clauses allow the tenant to end the tenancy at any time after specified period. For example: A tenancy starts on 1 January 2020 for a 12 month fixed term. There is a clause in the agreement which states that

“The Tenant may bring the Term to an end, not earlier than six months from the date of this Agreement by giving the Landlord not less than two month’s notice in writing, with the notice expiring on or after the period of six months from commencement of the term.”

In this case, the tenant can give 2 months notice to end the tenancy any time after 1 June 2020 so long as this is in writing.

However, some break clauses give the tenant one window of opportunity to end the tenancy early. For example, if in the same tenancy given in the example above the break clause states:

“The tenant may only bring the Term to an end by giving the landlord not less than 2 month’s notice at 4 months to end the tenancy at the end of 6 months”

there is one ‘window of opportunity’ to serve the notice to activate the break clause — that is on 1 April 2020 to end it on 31 May 2020.

The break clause will usually specify the form and length of the notice required to end the tenancy. It’s important to do exactly what is said in the break clause or the notice might not be valid. For example, an email giving one month’s notice will not be valid if the break clause requires one month’s in writing, delivered by first class post.

If the break clause doesn’t specify how to exercise it, the tenant should give a written notice (s.196 Law of Property Act 1925). If the tenant gives notice by email it might not be valid unless the tenancy expressly allows this. Mistakes might not invalidate a notice provided that the meaning is clear and the mistake is obvious — but it’s best to avoid any confusion and get it right the first time.

The decision to exercise the break clause has to be agreed by all the tenants. A break clause notice given for a joint tenancy by only one of the tenants won’t be valid. The tenant’s joint liabilities (and their guarantors) could continue for months or years after they have left.

Surrender

A surrender is a voluntary agreement between the landlord and tenant that the tenancy has come to an end. A surrender will end the tenancy, whether it’s fixed-term or periodic.

Express surrender

By far the safest way to end a fixed term tenancy early is by express surrender. This has to be done by deed which means that the document must

1. make it clear that it is a deed,
2. clearly specify the tenancy,
3. be signed by both landlord and tenant/s and
4. have signatures witnessed.

Implied surrender

The surrender of a tenancy can be implied in some circumstances. This might be:

• if surrender was agreed in writing but the document fails to meet the requirements for an express surrender by deed (as set out above)
• if there is no written or verbal agreement, where there has been an unequivocal act or series of acts by both tenant and landlord that are inconsistent with the continuation of the tenancy (Artworld Financial Corporation v Safaryan and others [2009] EWCA Civ 303).

“The conduct of the parties must unequivocally amount to an acceptance that the tenancy has been ended”

(Belcourt Estates Ltd v Adesina [2005] EWCA Civ 208).

For example, when a tenant says they’ve moved out and returned the keys, and the landlord allows another tenant to move in, or the landlord enters the property to carry out work. It is for the tenant to prove implied surrender.

If the tenant’s offer to surrender is not accepted, the landlord is entitled to look to the tenant (or guarantor) to pay the rent until it is lawfully ended. This could result in significant rent arrears, barriers to joining the housing register or accessing homelessness assistance. Any agreement that has been reached with the landlord should always be confirmed in writing.

Can I move out on the last day of the fixed term?

Whether you can simply move out before the last day of the fixed term tenancy will depend on what, if anything, is written in the tenancy agreement.

Many tenancy agreements do not have a clause specifying how the tenancy will continue after the end of the fixed term. In this situation the general rule is that the tenant can leave on the last day of a fixed-term tenancy without giving notice, and this will end the tenancy. To end a tenancy this way, all the tenants need to move out, so if there is a joint tenancy, all joint tenants need to move out at this time or the tenancy will continue. One joint tenant moving out and leaving on the last day won’t end the tenancy.

If a tenant remains beyond the last day of the tenancy, statute intervenes and section 5(3) of the Housing Act 1988 provides that a brand new tenancy known as a statutory periodic tenancy will arise.

This statutory periodic tenancy will run from month to month or week to week, based on the period of the tenancy. You should always check the tenancy agreement as this will usually say what date the tenancy started and what period it is. However if the tenancy does not give a period, or there is no written agreement, the start date can be defined by the date the tenant moved in and the can be period can be determined by when the rent is due. For example, if the rent is due monthly on the 1st of each month in the fixed term, then the periodic tenancy will usually run from month to month from that day. However, To end a statutory periodic tenancy, the tenant will have to serve a valid Notice to Quit.

Some tenancies include a clause which says what will happen to the tenancy at the end of the fixed term. For example, it may include phrases like “At the end of the fixed term the tenancy will continue on as a periodic tenancy” or “will carry on from month to month after the end of the fixed term”. In these cases a contractual periodic tenancy will arise and will be an immediate continuation of the original tenancy. In this circumstance, the tenant cannot end the tenancy by leaving on the last day of the fixed-term agreement. To end the tenancy, the tenant must serve a valid notice to quit after the date on which the fixed term ends.

It’s worth checking the tenancy agreement as there may be a term that requires the tenant to notify the landlord if they intend to move out at the end of the fixed term. If there is a term in the tenancy to this effect, then the tenant might be bound by it.

How can I end my tenancy if I have a periodic tenancy?

A tenant simply writing an email or letter to the agent or landlord giving them a month’s notice may not end the tenancy legally. To formally end a statutory or contractual periodic tenancy, a tenant needs to serve a Notice to Quit (NTQ).

Any one joint tenant can end a periodic tenancy, with or without the agreement of the landlord and any other joint tenants if this is done properly. But if a tenant doesn’t serve a valid NTQ, the tenancy will continue and liability for rent will remain. So it’s vitally important that if the tenant wants to end the tenancy, they get the notice right.

1. Expiry of notice: An NTQ must expire on either the first or last day of a period of the tenancy. The period of the tenancy is often determined by the day the rent is due but this is not always the case. Tenants should check what’s written in the tenancy agreement as it will usually say what the start date of the tenancy is and the period. The tenant or an adviser on their behalf, can calculate from that the period of the periodic tenancy.
2. Method of service: The rules on service depend on whether s.196 of the Law of Property Act is incorporated into the tenancy — check the tenancy agreement. If it is then a notice is sufficiently served if left at the last-known place or residence or business or office, and that letter is not returned by the postal operator as undelivered. The Act makes no provision for service by email and so unless the tenancy expressly accepts service by email, tenant’s should be cautious about relying on such methods. Tenants should also check whether the tenancy agreement specifies the methods by which service can be achieved. If the tenancy agreement doesn’t incorporate s.196 Landlord and Tenant Act 1925, and nothing is specified in the tenancy, under common law a tenant needs to serve the NTQ on the landlord personally or provide evidence that it has come to the landlord’s attention. In these circumstances it’s best to show personal service rather than risk posting it. Where this isn’t possible, recorded delivery will enable the tenant to evidence the date of delivery
3. Date of Service: ‘Serve’ has the ordinary English meaning of ‘delivering a document to a particular person’. The day a letter is posted isn’t necessarily the day it’s delivered — this needs factoring in to any dates in the notice. If the Law of Property Act 1925 applies, service is deemed to occur at the time at which the recorded delivery letter would arrive in the ordinary course of the post. Sometimes the tenancy specifies how it should be delivered and/or how long to give to account for posting etc. Read what’s in the agreement about how to serve notices and comply with that. If there is nothing in the tenancy agreement then it is important to make sure the landlord receives it and gets proof of this by getting it signed for.

Other more complex legal arguments

Joint tenancies

The rules are different if a tenant wants to end a joint fixed term tenancy early. But a tenant wanting to end a joint contractual or statutory periodic tenancy can do this by serving a valid NTQ. This article gives more information on how to end a joint tenancy.

Unwinding the tenancy within the first 90 days

A tenant might be able to end a tenancy signed on or after 1 October 2014, if they feel they were misled or unfairly pressured into agreeing to the tenancy (Part 4A Consumer Protection from Unfair Trading Regulations 2008 SI 2008/1277). The tenant would need to show they entered into the contract because of something the landlord or agent did or said that was misleading or aggressive. For example, explaining how the behaviour of the landlord or agent was misleading or showing misleading information given in a brochure or on a website. It’s not necessary for the tenant to show that they have suffered any loss, or that the landlord (or agent) acted dishonestly or negligently.

The tenant must inform the landlord (or landlord’s agent) they want to reject the contract within 90 days of the tenancy start date. There is no obligation for this to be put in writing, but it’s strongly advisable to do so. Ending a contract this way means the tenant can claim a full refund. But if they’ve had more than one month’s use, then they’ll have to pay the market price for the benefit they’ve had — this will be deducted from the refund. A due diligence defence may limit damages claims, but doesn’t prevent unwinding.

Where a landlord or their agent doesn’t agree, the tenant can apply to the county court for a declaration that the contract is unwound, and/or for damages or a refund. It could give rise to a counterclaim to any claim to recover rent for the period after the contract was unwound. However, without a declaration from the court, the tenant is at risk of not having properly unwound the tenancy and therefore they might remain liable for the rent. It’s a very risky option and if the landlord/agents won’t agree, the tenant should seek a declaration from the courts.

Ending tenancy due to breach of contract

In contract law, a serious breach of the contract might result in the innocent party having the right to terminate. But, the innocent party will only be released from the contractual obligations if the breach goes to the root of the contract — otherwise known as a repudiatory breach. It must;

“frustrate the commercial purpose” of the contract or “deprive the party not in default of substantially the whole benefit”

(Hong Kong Fir Shipping Co. Ltd -v- Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26).

Each case will depend on the facts. The larger in scale and more severe the breach, the more likely it is to amount to a repudiatory breach. However, without a determination from the court, the tenant will still risk the possibility of remaining liable if any future court decision goes against them in respect of this. It remains an extremely risky strategy for a tenant and a tenant seeking to rely on this will need to be warned of the risks involved and referred to a specialist housing solicitor.

Tactics

If none of the legal options above apply, or carry too much risk, the safest option available is to try to negotiate with the landlord. It’s nearly always better for all the parties to reach an agreement rather than engage in protracted, complex, time consuming and often expensive litigation. The strength of negotiating position would depend on the strength of the tenant’s legal position and potential risks to the landlord, but points for negotiation with the landlord if they are reluctant to agree to surrender include:

1. Surrender and re-grant of the tenancy to other joint tenants: If it is a joint tenancy and one or more joint tenants want to stay on, the landlord may agree to a surrender of the joint tenancy and a regrant of a new tenancy to those who want to stay in the property.
2. Find another tenant: Often the primary concern for the landlord is to avoid having an empty property. If your client is able to identify a suitable alternative tenant the landlord is more likely to agree to release your client from their tenancy. It will depend on how much the rent is and how long is left of the fixed term agreement, but your client might be financially better off paying the agency fees to find a new tenant quickly rather than paying the rent for the remaining fixed term but only if they can genuinely afford to do so.
3. Check for any possible claim (or counterclaim) for damages in respect of disrepair. Any claim for damages for disrepair could be used as a counterclaim to reduce or offset any later claim for rent arrears.
4. Was the deposit protected and the prescribed information served properly?: If the landlord has breached the legal requirements in the process of protecting the deposit, they might be liable for payment of compensation to the tenant which the tenant could claim/counterclaim.
5. Has the landlord taken prohibited payments under the Tenant Fees Act 2019 or Renting Homes (Fees etc.) (Wales) Act 2019?: Double check that the landlord hasn’t charged prohibited payments. The Tenant Fees Act 2019 came into force on 1st June 2019 and applies to all new or renewed agreements in England after that date. Guidance on the Act is here. The Renting Homes (Fees etc.) (Wales) Act 2019 came into force on 1 September 2019 and applies to all new or renewed tenancies in Wales after that date. Guidance on the Act is here.

Alice Holtom is a housing expert in the Expert Advice Team at Citizens Advice