Tenant want to end lease earlier

[wll6568]

Hi guys, I have an city apartment in Melb. And it's been leased to a couple for one year plus which has been really nice.

However just recently they informed me they wanna move out and would like to give me some notice ahead. However we only just signed a renewed 12 month lease. I want to know what is the current law in dealing with this situation. I know I probably can't force them to stay but what is the best way in handling this?

They said the love the apartment but just that with recent developments it has been too noisy for them with development work going constantly around the block.

 

[pinkboy]

What does your PM say/lease agreement say?

pinkboy

 

[wll6568]

I am managing t myself. There's proper contract with bond though.

 

[Azazel]

May be similar to this reply in this thread:

This is in vic- similar may apply to you.
You can actually state in the advertisement that the rent will be increased to $$ from this date (the date of which the current tenants fixed lease terminates).
Therefore you are seeking a tenant to see out the remainder of the current lease period for which the rent must be the same.

Tenants are required to pay rent under the current agreement until a new tenant takes possession. They are also required to pay pro rata lease break fees and advertising dependant on how much time is left on their lease.
Eg- 6 months left. Normal lease fee $500 and advert $200. They pay $250 fee and $100 advert. Landlord pays remaining as that is considered fees for new tenancy period (the further 6 months with new tenant).

http://somersoft.com/forums/showthread.php?p=1284809#post1284809

 

[pinkboy]

I am managing t myself. There's proper contract with bond though.

Then you need to know the specific rules of Vic. I suggest you research this tonight before they move and disappear.


pinkboy

 

[Xenia IM]

You are entitled to lease break costs which are minimal if you are self managing.
You need to mitigate losses - put on market ASAP.
Negotiate time with current tenant to show new prospects through.

 

[thatbum]

I am managing t myself. There's proper contract with bond though.

Don't suppose you know anything about break lease situations? That's probably what you're facing.

 

[Lil Skater]

Lease break, plain and simple.

You can charge the following -

All rent up until a new tenant is found or end of lease, which ever comes first.
Pro-rata letting/advertising fees - but if you're self managing and you originally placed the tenant in the property without any PM fees for leasing the property, you can't charge anything.

 

[wll6568]

Lease break, plain and simple.

You can charge the following -

All rent up until a new tenant is found or end of lease, which ever comes first.
Pro-rata letting/advertising fees - but if you're self managing and you originally placed the tenant in the property without any PM fees for leasing the property, you can't charge anything.

I don't understand. I should be able to say all rent up until new tenant is found right? And also the advertising cost. Since it's all still in the periodic lease term.

 

[Azazel]

What happens if they get funny about paying? Tribunal, bond etc..? Landlord insurance?

 

[thatbum]

I don't understand. I should be able to say all rent up until new tenant is found right? And also the advertising cost. Since it's all still in the periodic lease term.

What? I thought you just said they signed a new 12 month fixed term agreement?

 

[wll6568]

What? I thought you just said they signed a new 12 month fixed term agreement?

Oh, ya sorry I mean it's still within the fixed term 12 month lease

 

[thatbum]

Oh, ya sorry I mean it's still within the fixed term 12 month lease

Why not get a PM to handle the situation? It doesn't sound like you are very confident about your rights and obligations in this scenario.

You can probably get the pro-rata of the letting fee/advertising costs charged to tenants anyway. Which will be most of it if the tenants are breaking a new fixed term lease.

 

[Xenia IM]

lease break costs ie letting fees and advertising costs consider the total time that a tenant has been in a property including previous leases. Not only the current lease.

 

[Xenia IM]

As a rule in our office, properties on lease breaks are advertised on the day that the tenant has informed us that they are breaking the lease and inspection times are arranged immediately with that tenant.

this is so that the mitigation cannot be challenged later.

It's very important that you have that ad up right now. If not a tribunal will come up with a "reasonable" time it should have taken and that usually around 2 weeks. The tenancy will be terminated 2 weeks after they had informed you if you do not have proof that you are actively mitigating losses.

 

[Scott No Mates]

Not sure if Vic differs from NSW on this point but I generally get full advertising & letting fees & lease preparation costs for the leases being the balance of the unexpired term at the current rental. If the replacement tenant wants a full year (not the balance of the term) then you may have to wear a % of the costs.

 

[thatbum]

lease break costs ie letting fees and advertising costs consider the total time that a tenant has been in a property including previous leases. Not only the current lease.

If you mean that the total time is considered when calculating apportionment - that's not correct. Its only the current fixed term lease that is relevant.

 

[thatbum]

As a rule in our office, properties on lease breaks are advertised on the day that the tenant has informed us that they are breaking the lease and inspection times are arranged immediately with that tenant.

this is so that the mitigation cannot be challenged later.

Actually, the onus to start taking reasonable steps to re-let the premises only really triggers once the vacating tenant has offered up vacant possession to the landlord.

While its probably a good idea to start early, its not legally required. As long as you are in a position to move quickly once the tenant vacates, then you should be covered.

 

[Xenia IM]

If you mean that the total time is considered when calculating apportionment - that's not correct. Its only the current fixed term lease that is relevant.

May be different in different states. Definitely the total length of time is calculated for SA not just the current lease.

 

[Azazel]

Why not get a PM to handle the situation? It doesn't sound like you are very confident about your rights and obligations in this scenario.

You can probably get the pro-rata of the letting fee/advertising costs charged to tenants anyway. Which will be most of it if the tenants are breaking a new fixed term lease.

Yes. A PM will be reluctant to do their best when Inheriting a bad tenant from you or another PM. If they help you choose a tenant they will be on top of it. And the cost is negligible really, it's deductible and so worth it considering the headache it can cause you.