Short Lease...why?

[seano87]

Hi all,

I've decided to rent a property myself near the city. Found a great place, and ready to sign the lease. The current tenants have to break their lease due to a need to head back overseas, and we are taking over.
From what I understood, we were going to sign a 12 months lease.

Got a call from the property manager today telling us the owner only wants to sign us to the end of the current lease (September) and then do a 12 month lease after that.

After asking why, she said that he recently rennovated the place, and wants to do this for tax reasons. Obviously the length of the lease is up to the owner, but I can't think of any reason (related to tax) that would make the owner want to have a lease less than 6 months.

Any idea???

Thanks

Sean

 

[chilliblue]

Just make certain that the first lease states your right to take on an additional 12 months.

 

[Joe D]

Perhaps given the break lease situation he can only charge rent at the current level, but LL/PM wants to hike it in August.

I wouldn't sign up without certainty of new lease AND rental.

 

[marg4000]

Could be that tenants are easier to find in spring in the area of the property.

As this is a break lease, the rent has to be the same as previously. Maybe the landlord won't sign for 12 months at the current rent, but may sign a 12 month lease with a rental increase in September when the previous lease would have expired.

However, in the event that the landlord won't renew after September and you want a longer term lease, you could always ask for an option to extend for 12 months be granted.

If not, don't count on renewal.
Marg

 

[seano87]

My guess is that he just wants to increase the rent, but can't.
Just don't understand why the property manager has told me it's for tax reasons...

 

[Peter_Tersteeg]

I would have thought that signing a new lease now, they can increase the rent now (over and above the existing lease). September is a reasonable time to be renting in many markets, but late January to February tends to be the best time of the year in almost any market; certainly in the Melbourne inner suburbs.

I'd be looking for a 12 months lease starting now unless they've got a reason to want you gone in September. Even the argument of increasing the rent in September doesn't make much sense. I've found I can get a much better rent increase by waiting a couple of months on most of my IPs.

 

[fernfurn]

By law they can only re rent it for the same amount as was on the old lease, until the old lease ends. They have done a reno, and obviously the new lease will be dearer rent to reflect that. Expect an increase on the new 12 mths lease papers

 

[seano87]

By law they can only re rent it for the same amount as was on the old lease, until the old lease ends. They have done a reno, and obviously the new lease will be dearer rent to reflect that. Expect an increase on the new 12 mths lease papers

Is the owner leagally allowed to increase the rent if 6 months haven't passed? The fixed lease period will have finished, but it would have only been 5 months (moving in April).

 

[handyandy]

By law they can only re rent it for the same amount as was on the old lease, until the old lease ends.

This is not quite correct. There is no law that says you can't increase the rent.

What you can't do is expect the tenant, who breaks the lease, to wait for you to market the property at a higher rent whilst the old tenant is obliged to pay the rent until such time that you have found a new tenant at the higher rent.

If, as a landlord, you choose to release the old tenant form any obligations then you can do what you like.

Even this is under the old arrangement as now anybody can break a lease and given the break clause pay a maximum of 6 weeks rent.

http://www.fairtrading.nsw.gov.au/T.../Ending_a_tenancy/Breaking_a_lease_early.html

Cheers