Break lease

Discussion in 'Property Management' started by CHAOS, 6th Jun, 2015.

  1. CHAOS

    CHAOS Member

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    Tenant has broken lease and rules are that they need to keep paying until a new tenant is found.
    If they decide to stop paying after 14 days they get a breach notice - and in normal circumstances if they don't pay the lease is terminated and vcat Oder them out.
    In a break lease - isn't this what the tenant wants to happen.
    Are leases worth the piece of paper they are written on - or does that only apply to landlords?
     
  2. Rixter

    Rixter $uper Investor (Retired)

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    I guess it depends on the tenant integrity/morals how they conduct themselves as to what avenue they proceed.
     
  3. CHAOS

    CHAOS Member

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    I guess I am going to find out. They resigned in jan for 12 mths. They gave notice by walking in pm office handing over the keys as they had already moved agreed to pay all necessary fees etc - didn't give a reason for break lease.
    This is the slow time of year - there has been little interest and no applications.
     
  4. Rixter

    Rixter $uper Investor (Retired)

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    Sounds like Perth atm.
     
  5. wylie

    wylie Member

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    ... and Brisbane.
     
  6. Lil Skater

    Lil Skater Member

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    If a tenant breaks their lease, and stops paying rent you really do need to take the normal process for insurance purposes.

    Is it worth considering a reduction in rent to get a tenant, and claiming shortfall, plus break fees from previous tenant? I don't know what your previous tenants are like though.

    Also, a trend I'm seeing becoming more common - is VCAT awarding break lease costs to the owner (advertising, leasing fees etc) only in the event of the first lease, and then reducing the lease break costs for any further leases as per lease renewal fees (if any). The reasoning behind this, is you're "not at any loss" in terms of advertising and agent fees, because the fee paid at the start of the tenancy is for the initial period only. I'm in two minds about this one.
     
  7. CHAOS

    CHAOS Member

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    We don't have insurance for this one. That doesn't phase me.

    This is the part I loathe about PI and that is everything is stacked in the tenants favour and the rules are not worth the paper they are written on. We are not a charity. Even Centrelink get an order and take child support payments straight from the employer - why can't VCAT do the same with this employed person?

    As a landlord I can't walk in to a property and tell the tenants I'm breaking the lease get out.

    The reality is we will lose. We will have to drop the rent to get any tenant. We won't get the full bond back because the PM will take their fees to readvertise first then we get the scraps. VCAT should make them pay until another tenant is found at the same asking rent OR if the rent is lowered the tenant who broke lease pays the difference in rent until their lease ends. It doesn't help that I have to manage the PM either.

    Lil Skater after the 14 days letter is sent - what is the next cause of action? How much time to they get?

    In my idealistic bubble - if the rent agreement says to pay fortnightly in advance, then an arrears notice should be able to be issued on the 14th day that the advance payment was not made. In recent years I have also had rubbish where PMs have said well they have paid 3 days of this week. Why are the tenants allowed to get away with that?

    Sorry all - rant over
     
  8. superAndrew

    superAndrew Member

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    I don't know about other states but in QLD a tenant can't just break a fixed term lease and get out of it.

    Tenants can leave but they have to either continue paying until the agreement ends or find someone else to replace them for the remaining duration of the agreement.

    You can also threaten them that they will be listed on TICA.

    Andrew
     
  9. thatbum

    thatbum law talking guy

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    I'm not sure what your beef is - the tenants will be liable for any reasonable damages arising from their breach of agreement.

    Hardly a situation where the lease "isn't worth the paper its written on".
     
  10. CHAOS

    CHAOS Member

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    You're right. A waste of my energy today.

    Liable doesn't always equate to paying up.
     
  11. Rixter

    Rixter $uper Investor (Retired)

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    Do you have landlord insurance in place?
     
  12. Lil Skater

    Lil Skater Member

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    Chaos, NTV can be served once 14 full days in arrears (15th day). If it remains unpaid 3 business days later (day 18) you can apply to VCAT.

    Wait for VCAT hearing depends greatly on the area the property is, generally 2 weeks - but have seen 5+ weeks!!

    It's true that the tenant is liable, but you can't get blood from a stone. You get your VCAT order, claim the bond and anything left over lodge the tenant on ntd (you need to give them 14 days notice that you're doing this..) and hope they apply for a loan where the debt shows up OR if it's a larger debt, get a debt collector involved.

    If the tent is dropped, the tenant is technically liable for the difference between the two rental figures until the end of their lease. But once again, unless they agree to pay up then you're stuck doing it through VCAT.
     
  13. CHAOS

    CHAOS Member

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    Thanks for the replies. Tenant has paid some more but is now threatening to take us to vcat because it has taken so long to get another tenant. Pm says we need to drop rent and show we are trying to help the situation. Pm says vcat will let them out.
    I don't know the actual vacancy rates atm but this agency has 4x the normal amt of properties vacant atm and that is just them. The tenant also broke lease at a time where we can't get in there to make it more rentable. With so many vacancies the listing falls to the bottom. Apparently it is up to us to prove we are doing everything to relet it.
    Tenant doesn't have to prove they have tried to get someone to take over their lease? This is a good lady who has young kids and I believe has remarried. We are a family with young kids and expenses too. But we signed a contract!
     
  14. CHAOS

    CHAOS Member

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    Just had a look at sqm vacancy rates. Can someone explain how to interpret it. The orange number says 3.5% but the blue bars are above the 6% marker.
     
  15. Nick Valsamis

    Nick Valsamis Vantedge

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    The orange number is the current rate.
     
  16. CHAOS

    CHAOS Member

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    Thanks nick:)
     
  17. Lil Skater

    Lil Skater Member

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    Do you have a link to the ad?

    This time of year tends to be a little slower, but if the ad is no good no one is going to bother coming to look.