4. I have rented a property on a three year term. As a result, I have incurred rather big sum of money on renovations and purchasing furniture and expensive appliances which only fits into the property’s layout and dimensions. However, the landlord relied on the ‘break clause’ and gave my notice to quit at the commencement of the second year. The landlord at the same time threatened me that if I wished to stay, I must pay extra rent for the remaining term, or else I must leave after restoring the property into its original state at my own costs. Is that fair? Can I sue the landlord for compensation?
Assuming that the landlord has rightfully invoked the break clause at the correct time as stipulated under the tenancy agreement (i.e. after 1 year fixed term), the landlord is not in breach. Regardless of how much sympathy you may gain from your position, the Court is likely to give recognition to the break clause to terminate the lease and no compensation will be awarded in favor of the tenant.
Whether or not the landlord has put pressure on you by increasing rent may not be relevant as it is permissible for parties to freely negotiate on terms based on their bargaining power on a commercial basis.
While ‘break clauses’ do grant flexibility, a tenant shall take into consideration as to whether the inclusion of ‘break clause’ is truly desirable for him/her interests. It must also be noted that if there is no security of tenure for the entire term, the tenant shall be cautious as to whether it would be worth to commit expenditures into the property by renovating it. The question of handover standard will be dealt with further below.