Tenant breaks fixed lease

[Joey5641]

We have recently been advised our tenant will be breaking the fixed lease (which has 6 more months to the end of the lease).

I am aware that the current tenant would be paying all the fees when finding a new tenant, but I would be obligated to offer a new a full 12 month fixed agreement or just a 6 month lease (at the current agreed rental price)?

My preferred option is to advertise the property at current price with a clause to increase rent in 6 months by say $20pw, however I've read that the tenant can argue that this puts them at a disadvantage as they want the property to be rented out ASAP.

Any thoughts would be appreciated.
If there is already a thread on this topic please advise.

P.S. Property is in Melbourne.

 

[travelbug]

Not a lot of info but here's one link.

http://www.somersoft.com/forums/showthread.php?t=56562&highlight=fixed

 

[lura]

You must advertise the property as a "Break Lease" and you can insert a clause for the increase in rent to take effect after the current lease end date.

The tenant cannot argue with this because if they had stayed, you would've put their rent up anyway.

The tribunal will only be against you if the $20 rent increase is deemed to be excessive and not in line with market.

Alternative, you don't have to advertise to take a 12 month lease - you can just advertise for the balance of the lease and at the end, renew the lease with the next lot of tenants with the rent increase.

Just because you have a new tenant - doesn't mean you have to sign them up for 12 months. A Fixed term lease can be any length with a start date and an end date.

Best to use a method that can move the tenants on smoothly.

 

[Joey5641]

Thanks for the response.
PM thinks that we can get an additional $40 (without issues), so we'll offer a lease (per current rate) until the end and then offer a renewal with a $30pw increase or have it all written into the contract whichever the new tenants are happy with. I think this is a fair compromise for all parties involved.

Since the current tenants are vacating over New Years we're concerned that the property will be empty for a few weeks.

 

[travelbug]

It must be different in other states.

When our tenant broke lease we just advertised for a new tenant (at a higher rate) and just signed a new lease at the new price the same week they moved in (2 days after the existing tenant moved out).

I don't see why you have to complete a lease with someone else. They moved out- it's ended. Your contract should be with the new person on your terms.

 

[lizzie]

also, it is preferable to sign up new tenants for 6 months and then extend if they are good. means you don't have as long to wait to kick them out if they are less than desirable.

 

[handyandy]

It must be different in other states.

When our tenant broke lease we just advertised for a new tenant (at a higher rate) and just signed a new lease at the new price the same week they moved in (2 days after the existing tenant moved out).

I don't see why you have to complete a lease with someone else. They moved out- it's ended. Your contract should be with the new person on your terms.

If you are hitting the existing tenant for fees relating to the cessation of lease - weeks rent, rent whilst empty etc, then there is a case for same rent and conditions. The exiting tenant could argue that any delays in finding new tenant is related to changing rent and/or conditions.

Cheers

 

[travelbug]

If you are hitting the existing tenant for fees relating to the cessation of lease - weeks rent, rent whilst empty etc, then there is a case for same rent and conditions. The exiting tenant could argue that any delays in finding new tenant is related to changing rent and/or conditions.

Cheers

Yes I realise that. It's a tight market so we knew we would have no down time.
But the thread is about having to continue with the same lease until it expires or HAVING to have a fixed lease.

I've never heard of that before.