Breaking a Residential Lease

[geoffw]

Hi,

I’ve just received notification that a tenant is going to break a lease (barely two months into a 12 month). Ironically, it is for the same reason I posted something about yesterday- http://www.somersoft.com/forums/showthread.php?postid=41576#post41576

That’s OK, the tenants are aware that have to pay the reletting fees, and rent up to whenever new tenants start paying.

I would have liked to have taken the opportunity to tart it up a bit before reletting- however, PM advises that because it is a broken lease situation, I cannot raise the rent until the end of the existing lease- and so any reno work would be a waste.

I would have thought that tenants and landlord could mutually agree to break the lease- say if they paid four weeks rent (notice given is 2 weeks time), and I wore reletting and vacancies. (Demand is high here, but I would have had the right to ask for rent while I was renovating).

I guess I would have to make sure reno would add enogh to the rent and/or value to be worth while.

 

[JoannaK]

Originally posted by geoffw
Hi,

I’ve just received notification that a tenant is going to break a lease (barely two months into a 12 month). Ironically, it is for the same reason I posted something about yesterday- http://www.somersoft.com/forums/showthread.php?postid=41576#post41576

That’s OK, the tenants are aware that have to pay the reletting fees, and rent up to whenever new tenants start paying.

Geoff, don't forget that the tenants should also be paying for any advertising costs as well.

Originally posted by geoffw
I would have liked to have taken the opportunity to tart it up a bit before reletting- however, PM advises that because it is a broken lease situation, I cannot raise the rent until the end of the existing lease- and so any reno work would be a waste.

I'm not so sure about this Geoff. I have, on a number of occassions, upped the rent on a property with a tenant breaking a lease so that the new tenant pays more than the old. You're in business and you have to take advantage of market conditions.

Originally posted by geoffw
I would have thought that tenants and landlord could mutually agree to break the lease- say if they paid four weeks rent (notice given is 2 weeks time), and I wore reletting and vacancies. (Demand is high here, but I would have had the right to ask for rent while I was renovating).

Of course they can! As long as everything is carefully documented and all parties to the agreement sign acknowledgement forms.

 

[asy]

Geoff,

I have to say I agree with JoannaK...

I can't see why you can't raise the rent for the new tenants.

The new tenants will not be taking over the old lease, they will be signing a new lease, so you can put any rent or conditions you like in there, irrespective of the lease you have with these tenants.

Perhaps your PM misunderstood you, and thought that you wanted to charge them more before they moved out? (couldn't do this!)

I will use a disclaimer here, I am not up with the CBR tenancy act, but I suggest you go and ask your PM... "Where is it written... ?"

Again, as JoannaK said, you can agree to break the lease, you can agree to anything, as long as it is documented...

asy

 

[geoffw]

Thanks people.

The tenants and myself agreed to a three week notice period. That gives me the chance to repaint, and to put new floor coverings and curtains in, with a few cosmetic issues (plus fixing up a leak through the shower floor)- about $6K for a $30pw rent increase.

I had inherited an old fridge with the unit. The PM advised against keeping it in the unit, as I would then be liable for repairs. Fair enough.

Tenant had indicated he wanted to stay in the unit until the last day of the notice (19 March).

But then the tenant asked to buy the fridge.

Hey, he's saved me the cost of disposing of it!

But additionally, I suggested he could have it for free if he vacated by 14 March- giving me some extra time forthe reno.

Monday 17 is a holiday in Canberra- and I have a painter who can finish the painting over the long weekend- saving a week without tenants.

Win/win!