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Mutual Break Clause

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Tenant

Please could someone give us some advice. We have been renting a house since 2010. We took out a conract in 2010-11 then another in 2011-2013 and we are now in our current contract which we took out on 28/01/13 – 27/01/15.

We are currently in the process of buying our first home and hope to complete at the end of sept 14.

We contacted our letting agent to advise of this and he sent us the following email:

Further to our conversation, your tenancy does not expire until the 27th January 2015 and as such you are responsible for both the property and the rent up until that date. If you wanted to proceed we would need to speak to your landlord and providing they are in agreement and should you wish to proceed with the early release, the provisions for this are detailed below and you will only be released once a new tenant takes occupation:-

Should you require any early release, there is a penalty charge for breaking the tenancy agreement. You would be responsible for the rent and the property up to the point a new tenant takes occupation and the penalty charge is 60% + VAT of a month’s rent & £150.00 for the new tenancy agreements for the replacement tenant. Should we not be able to find a new tenant, please be aware that you will not be released from the contract and this will continue until expiry on the 19th September 2014 .

Clause in the tenancy agreement 3 (b) vii
Any Early release administration costs not paid by any assignee if the Landlord agrees to an assignment which are incurred by the Landlords Agent following the early ending of the Tenancy by the Tenant will be deducted from the Deposit. Early release penalty charges are 60% + VAT of a months rent & £150.00 + VAT for new contracts for replacement tenant to be paid by tenant requiring early release from this agreement.

Please can you confirm by return that you agree with the above and I can arrange for the property to be marketed on your behalf?

We are a little confused as we thought we would be covered by our contract under the ‘Additional Clauses’ section which states:

3 (0) 5 Mutual Break Clause

Any time after Twelve months of the initial fixed term of this tenancy (or after a similar period following a fixed term extension to the original tenancy) either party may invoke this break clause by providing a minimun of one months written notice to the other (such notice to expire on the last day of a rental period of the tenancy). At the end of such notice the tenancy shall end and all obligations and responsibilities shall cease; subject nethertheless to any claim by either party against the other in respect of any breach of any of the terms and conditions of the agreement.

We’re not sure where we stand and would really appreciate some advice – do we have to pay these early release penalty charges?
thanks

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