Residential lease special conditions

A resi lease has a special condition in it, which states the following

* 5% of the annual rent is to be paid by the Agent if there is a lease break.

This for clarity, is separate to the letting fees, advertising costs and obvious responsibility for paying rent until a new tenant is found. It seems as if this is some kind of early lease termination penalty? :confused:

In this case, my friend has already signed the lease and after 7 months of the 12 month lease is breaking it. Has anyone else came acoss this? I have never heard of it in my time as a renter and have never seen it in the lease agreements with my tenants.
 
Normally a renter has to pay the reletting fee if they break. Which is typically a weeks rent. 5 percent sounds too high. I have my doubts about whether it is enforceable. Best to call the tenancy regulator in that state.
 
What's the charge for?

The tenant cannot be charged in excess of what the landlord would pay. Ie - if landlord's letting fee is 5% the tenant would have to pay a pro-rata amount depending on how long they have left on their lease.

The tenant is not responsible for any other fees, unless they are associated with the leasing of the property.
 
Since it sounds like all other out-of-pockets are already covered - ie re-letting fees, rent until new tenant moves in, and advertising - this sounds like some kind of penalty on top of out-of-pockets. I'd be willing to bet quite a lot that such a clause is not only unenforceable, but probably illegal.
 
I missed the bit about it being on top of reletting fees.

Yes agree with Perp I think it's unenforceable and probably illegal.
 
We had a discussion with consumer affairs yesterday and they indicated that it seemed strange and to clarify with the PM what the charge is actually for. An email was sent yesterday to the PM and we'll wait their response as it can only be interpreted as some sort of penalty clause. If legal, it would be a nice revenue earner for PMs.

It pays to read everything especially the conditions under the title of Special Conditions!
 
Even if it was illegal only that part of the agreement would be struck out - the other provisions in the lease would most likely remain.
 
It pays to read everything......

Damn straight.

I'd start with the Term of the Lease.

What happened to "I commit to leasing this property for 12 months." ??

I'd suggest a 12 month Lease was agreed to by the Landlord cos it went from Dec to Dec, a most desirable time to lease a property out. Lots of enquiries and high rent attained.

Tenant on a whim decides to dishonour their commitment, dumping the property in July when it's cold wet and rainy and no-one wants to move in, or if they do, at a much reduced price.

Trying to get Tenants to pay the rent when they have moved out and paying rent elsewhere is a near impossibility, especially when they fail to leave a forwarding address.

It's all downside for the Landlord, and they did nothing wrong. Situation normal.

Now, let's all get back to seeing how we can reduce the Tenant's expenses.
 
why would the friend sign the lease then have a problem with the terms? are you saying they signed it without reading it? sounds nuts
 
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