PART 9TERMINATION ETC. OF OCCUPATION CONTRACTS

CHAPTER 7TERMINATION OF FIXED TERM STANDARD CONTRACTS

Landlord’s break clause

198Restrictions on use of landlord’s break clause: security and deposit requirements

1

The landlord may not give notice under a landlord’s break clause at a time when security required by the landlord in a form not permitted by section 43 has not been returned to the person by whom it was given.

2

The landlord may not give notice under a landlord’s break clause at a time when any of subsections (3) to (5) apply unless—

a

a deposit paid in connection with the contract has been returned to the contract-holder (or any person who paid the deposit on his or her behalf) either in full or with such deductions as may have been agreed, or

b

an application to the county court has been made under paragraph 2 of Schedule 5 and has been determined by the county court, withdrawn, or settled by agreement between the parties.

3

A deposit has been paid in connection with the contract but the initial requirements of an authorised deposit scheme have not been complied with.

4

A deposit has been paid in connection with the contract but the landlord has not provided the information required by section 45(2)(b).

5

A deposit paid in connection with the contract is not being held in accordance with an authorised deposit scheme.

6

This section is a fundamental provision which is incorporated as a term of all fixed term standard contracts with a landlord’s break clause; section 20 provides that this section—

a

must be incorporated, and

b

must not be incorporated with modifications.