Tenant broke lease - who pays the letting fee?

[onetwothreefour]

Hi, our tenant broke the lease and we were charged $1700 for letting fee (2 weeks + gst). I believe the letting fee should be paid by the bond. The property only vacant for 1 day!
So, who should pay the letting fee?

 

[SOP]

Hi, our tenant broke the lease and we were charged $1700 for letting fee (2 weeks + gst). I believe the letting fee should be paid by the bond. The property only vacant for 1 day!
So, who should pay the letting fee?

nice of your agent to charge another two week letting fee when the previous tenant they found didn't hang around for the entire length of their lease.

I would be asking the agent to waive this fee.

 

[MattA]

SOP - Why should the agent cover the cost ? It wasn't their fault the tennant broke the lease, but yet they had to go through the process of re-letting the property...

Onetwothreefour - which state is the property in ?

 

[Scott No Mates]

The agent doesn't guarantee the performance of the tenant, the bond underwrites it.

Who approved the tenant? Who does the agent represent? If the answer to both of these is you, as the owner then why would the agent be responsible?

 

[Perp]

The tenant who broke the lease pays.

 

[SOP]

All fair points.

But I would be pissed off if my agent decided to charge the landlord instead of taking it out of the tenants bond.

 

[onetwothreefour]

The IP is in WA.
Yes..I was not happy that $1700 was deducted from our account.
In fact the agent promised not to charge letting fee.
We did not approve the the tenants, we inherited from previous owner. The property was not even advertised because it just happen the next tenant walked in.

Not happy. We got the 'referral' from this forum. And so far it's not a happy experience.

 

[Perp]

Yes..I was not happy that $1700 was deducted from our account.

But are you sure that you won't be repaid this from the departing tenant's bond?

 

[Scott No Mates]

1234, you say that the tenant broke the lease - did they do it in accordance with a break lease clause, give notice or simply do a runner? In case 1) then the tenant would pay x weeks rent & vacate, end of story. 2) tenant is liable for rent and all costs for reletting until it is leased. 3) Use the bond & claim on insurance.

 

[Xenia IM]

Tenant reimburses landlord for letting fees and advertising

How much compensation you are entitled to as a landlord. Depends on where in the lease it was taken. It's calculated based on the remaining number of weeks after the property was abandoned.

Roughly, if it was broken at the beginning of the lease tenant pays almost all letting costs and re advertising fees.
half if broken half way through etc.

There is a formula that it's all calculated from but the answer is yes you are entitled to a compensation of leasing costs through the bond or through insurance if bond is absorbed by other costs.

You can claim both letting and adv costs through bond.
From the tenant side they are called lease break costs!

 

[Xenia IM]

Where in the lease it was broken!!! Not taken

 

[Truly Exotic]

I agree, the agent has a moral obligation to put in a decent tenant,

if the tenant turns bad partial responsilbiity lies with the agent,

if the PM refuses to take responsbility then they are immoral or dodgy in my eyes,

 

[crest133]

Generally the tenant breaking the lease is responsible for any costs that the landlord would not have had to pay had the tenant abided by the lease.
The point of the lease is to provide secure stable tenure for a set agreed period for the tenant and secure income without relet fees for the landlord. Try evicting a tenant before the end of a fixed lease and see what it costs, WOW.
Fair's fair, the lease breaker pays.
Cheers
crest133

 

[Perp]

I agree, the agent has a moral obligation to put in a decent tenant,

if the tenant turns bad partial responsilbiity lies with the agent,

if the PM refuses to take responsbility then they are immoral or dodgy in my eyes,

One can't expect the PM to see the future. Their responsibility is to do all the checks that they agree to do, and it's your responsibility - as landlord - to decide whether that's a tenant you'd be willing to accept.

If the PM fails to do proper checks, or fails to issue breach notices when they should have during the tenancy, then they should be held accountable for the consequences of that, but it's entirely unreasonable to expect them to act as guarantors for every tenant.

 

[Big Will]

I don't understand why some people think the PM should pay.

If a REA finds a sale and the deal goes unco and then the buyer runs away the agent is still entitled to their commission and is entitled to another commission if they find another purchaser. As you employed them to find you a buyer which they did.

Same with the PM, you hired them to manage the property (notices, inspections etc etc) and also find a tenant. Which they did.

Yes it might of only taken them 1 day to find you another acceptable tenant, take this as a bonus and maybe even pay them a bonus for doing a great job in securing a tenant so quickly!

What if it took them 3 months would you then pay them $10,200 (850 x 12 weeks)? No you wouldn't cause you would of lost $10,200 in rent + letting fee of $10,200 or a total of $20,400.

Maybe you should be more grateful with what you have, sorry you really aggravated me with trying to hurt someone's income for doing a GREAT job when it could of been a lot worse.

 

[Peterw]

From my reading of the posts, the LL inherited the tenant when they bought the property, and then engaged the services of a PM which was recommended from this site. If that is correct, then the PM did not source the tenant. With a Break Lease, we get the relet fee from the outgoing tenant, and deposit that into the landlords account, and then on reletting, we charge the account. It may be that the LL has not noticed the credit, just the debit. If the funds are not received from the outgoing tenant, then the bond is charged. the LL here has not made mention of what has happened with the bond.

 

[onetwothreefour]

The pm that we hired after purchasing the property, deducted the letting fee from the rent of the new tenant. It was back 11 months ago..to this day, the pm still has not made any bond claim or process the bond to be released. I requested many many times for them to start the bond claim but they managed to dodge my requests. Long story. Anyway, the letting fee should be bear by the tenant that broke the lease, not ll. The PM also found the next tenant that we evicted last month, due to non paying rent.

 

[onetwothreefour]

I don't understand why some people think the PM should pay.

If a REA finds a sale and the deal goes unco and then the buyer runs away the agent is still entitled to their commission and is entitled to another commission if they find another purchaser. As you employed them to find you a buyer which they did.

Same with the PM, you hired them to manage the property (notices, inspections etc etc) and also find a tenant. Which they did.

Yes it might of only taken them 1 day to find you another acceptable tenant, take this as a bonus and maybe even pay them a bonus for doing a great job in securing a tenant so quickly!

What if it took them 3 months would you then pay them $10,200 (850 x 12 weeks)? No you wouldn't cause you would of lost $10,200 in rent + letting fee of $10,200 or a total of $20,400.

Maybe you should be more grateful with what you have, sorry you really aggravated me with trying to hurt someone's income for doing a GREAT job when it could of been a lot worse.

Your comment aggravate me. You sound like one of those PM that taking percentage from landlord income but stand on tenant side. You sound like one of those PM that do so little but expecting every percentage with little to no effort. You sound like one of those PM that think landlord are so fortunate by owning properties so we don't deserve your small effort.

Big will...where did you see in my post that I expected the PM to bear the letting fee. And yet you sound like a greedy calculated PM and and telling me to be grateful that my PM did their job that I pay them to do?

I own multiple properties all over Australia and I spend my time managing my PM to do their job..and most PM don't own investment property so they usually stand on their tenants side.


We should be more grateful when tenant have not paid their rent for the past 3months and pm just assuring that next month tenant will pay? We should be grateful when after almost 1yr, PM still sitting on bond claim? Yes..your comment aggravate me..

 

[Xenia IM]

Just wondering if any lease break costs have been claimed to date through the bond?

 

[onetwothreefour]

no. We have a very incompetence PM. After months asking them to reimburse the letting fee, I discovered that the bond claim was sitting on someone desk all these times.

Just wondering if any lease break costs have been claimed to date through the bond?