Breaking a tenancy agreement early - penalty?

[Justinepants]

I haven't rented anywhere for years. It now looks as if we might need to as house hunting hasn't turned out as we hoped.
Could anyone give me advice about what happens if we sign an agreement, then find our perfect house and want to get out of the contract early? I imagine you end up paying a penalty fee but I wonder how much it might be.

Most tenancy agreements are for a year with a six month break clause, so you can give notice at six months without a penalty, the notice period is likely to be one month. So you are committed to six months regardless of how long you actually live there.

You could see whether the landlord would consider a three month letting instead of six months? You'd be liable for the rent, etc if you moved out before the term was up, unless you can negotiate something very flexible.

Hang on Chumhum isn't right there - most ASTs are for six months initially.

Minimum AST is 6 months, you can not do an AST for less than 6 months. If you leave before the six months you would be liable for the rent for the remaining months to the end of the tenancy. After 6 months (if you do not sign another agreement) then you will be on a rolling contract, with a months notice your side and 2 months on the LL's side.

HaveToWear there is no minimum period for an AST. If a s21 notice is used by the LL to end the tenancy then a court will not make an order for the tenant to leave if they have been there for fewer than 6 months. So, if a LL was prepared to offer a 3 month AST to a tenant who is looking to bridge the gap between house sale and purchase of the next house that LL would have to weigh up the risk of having a paying tenant for the term of the AST and the possibility of them not moving out after three months, but the tenant would have to continue to pay the rent.

I would also note that you remain liable for the council tax up to the end of the lease too and if the property is furnished there's only a 10% discount to be had if you've moved out.

It is possible to get short term lets though, contact some leasing agents to see what's available in your area.

there are short lets but for the full legal protection on both sides you need the 6 month AST. You can of course leave whenever you wish but you will still be liable for the rent and bills.

all you can do is discuss with the landlord and ask that if you want to go early, he/she would readvertise the place with you paying the early departure costs. This will work best in a place with an active letting market.

Wowfudge as specialsubject has also mentioned, for full legal protection a 6 month AST is the way to go. We would never enter into anything less from the legal and financial perspective. I am sure anyone that did would hike the monthly rent to cover this.

A letting for a shorter period than six months is riskier for the landlord than the tenant. I was simply pointing out for the OP, who is clearly looking to bridge the gap between a house sale and subsequent purchase, that she may not have to factor in six months' rent.

...if she can find a landlord prepared to take the risk.

I do know of a couple of such landlords and have rented from one of them - but this only helps if the OP is in North Wales/Shropshire!

Thanks for all your wise words and useful wisdom. From what you say, it sounds as if we are most likely to end up with a year's contract but a break clause at 6 months, and then one month's notice after this time. But there's a small chance that we might find a LL who would be willing to do something shorter but it would probably cost us more pcm.

As there are only currently 5 properties on anyone's books that meet our requirements, I doubt anyone is going to do anything very flexible for us, sadly.

specialsubject - unfortunately not looking in N Wales/Shropshire.

This happened to us last time we moved - we signed a 6 month AST on our rental place then found somewhere much sooner than we expected. In the end we were in the rented place 5 months - we just had a chat with the LL and she agreed to us leaving a month early - we gave her plenty of notice and agreed to her showing the house to prospective tenants before we left. It was all very amicable and she had a new tenant lined up by the time we left.

Oh that would be nice. I'm getting thoroughly depressed about the whole thing.

BTW when I was in my short-term let it took five months to complete on the house, having started the search when we moved in.

make sure you have that six month break and one month after that, and as noted keep your landlord posted and something can often be worked out - especially as it is in their interests to let you go for a long-term tenant. And in the scheme of moving house things, a month's rent is lost in the noise.

the other advantage is that you can have an overlap, so you can complete on the new house and then move in at your convenience. This may also allow you to avoid a Friday completion which makes life easier, and removals cheaper.

We offered on our current house a few days before completing our sale and moving into rented. It then took four months to get to the point where the house was ready for us to move in - three months to complete then 4 weeks to do stuff in the house before we moved in (big advantage of sell-rent-buy). So we were only ever looking at losing two months' rent, and as it happens our LL re-let fairly quickly so we only lost one.

It wouldn't be an AST (Assured Shorthold Tenancy) for less than 6 months initial term , after that you can roll it on with a standard month's notice on tenant's side or 2 ll's. You could terminate earlier by mutual consent but the max liability is for that 6 month term. An AST gives you certain rights and protection. Realistically buying a property takes an average of 3-4 months form offer.

A few people have mentioned 6 months + 1 month notice. You can move out at the end of 6 months, confirming 1 month before that ie at 5 months, that you will not be renewing the contract.

In all probability 6 months will be about the right length of time and you wont be double paying. It gives you roughly . . . 2 months to find somewhere, 3 months to complete and 1 month of cleaning or redecoration of new house and moving yourself at your leisure.