Tenant whats to change lease term

[NBS]

The tenant signed a 12 mth lease about two weeks ago however received a call from PM today and they now want to reduce it back to 6mth.

While I don't want to get any bad blood happening, I advised the PM they did sign a 12mth lease and if they want to break the lease they will have to sort out advertising and the other costs involved.

I also told the PM to advise the tenant I don't have a major issue with them wanting to go in 6mth as long as I get a tenant in that meets the requirement.

Be interesting to see what the tenants do now. Of course one wonders is it better to agree and at least then I don't have ticked off tenants in the place.

How have other here dealt with this situation, how would you deal with this?

Brian

 

[MangoMadness]

Would it be best to say something like

"The rent was based on a 12 month lease, if you wish to change it to a 6 month then I will have to increase the rent by X"

That way they win (6 month lease) and you win (some extra coin)

I guess the other thing to think about is did you choose them over someone else wanting a 12 month lease? If you did then I would be fairly miffed that I lost out on a guaranteed 6 month rent because they changed their mind.

Maybe that was their tactic from the beginning? Did the PM say that you wanted a 12 month lease initially or did they suggest that term?

 

[Ed Barton]

The tenant signed a 12 mth lease about two weeks ago however received a call from PM today and they now want to reduce it back to 6mth.

While I don't want to get any bad blood happening, I advised the PM they did sign a 12mth lease and if they want to break the lease they will have to sort out advertising and the other costs involved.

I also told the PM to advise the tenant I don't have a major issue with them wanting to go in 6mth as long as I get a tenant in that meets the requirement.

Be interesting to see what the tenants do now. Of course one wonders is it better to agree and at least then I don't have ticked off tenants in the place.

How have other here dealt with this situation, how would you deal with this?

Brian

you're following the best course of action.

 

[NBS]

lol Dazz you deleted yourself must have been very to the point and colourful .

Brian

 

[porp_e]

Hi NBS,

Did the tenants offer anything in return for a shorter lease? If not then I wouldn't think twice about the request, your course of action sounds like a good one. We recently asked our landlord to shorten our lease but offered extra rent in return which they accepted, but I wouldn't even have bothered asking without offereing something I thought they might find worthwhile.

 

[DaveM]

Hold them to their lease, if they want to break early then they can pay the costs associated.

The whole point of a contract is that it binds both parties - otherwise there would be no point and people would just change things willy nilly.

 

[Sez]

I agree with the general opinions here, hold them to it, they signed a contract and if the shoe was on the other foot you would probably find that the tenants wouldn't be very happy to help you out. Make sure they are aware of their break lease fees and if they wish they can start trying to find someone suitable now, otherwise have your PM advertise 4 weeks before their intended vacate and hold them responsible for costs.

Anybody they want to put forward to move in after 6 months will have to be screened as any potential applicant would and can be knocked back.

Perhaps it will give them a much needed lesson in forward planning?

Dazz - it must have been good for you to delete yourself!!!!

 

[russellpeter]

whats the reason they now only want 6 months?

 

[Peterw]

May I ask, why the PM raised this with you? As the lease is binding, I would have assumed the PM would have advised the tenant of such, and is just informing you as a matter of courtesy, that there may be an issue, if the tenant does not fulfill their obligations. Trying to shadow box every thought bubble that a tenant may have, will take up more time than we have available. We regularly remind tenants, that their behavour, effectively writes their reference.

 

[ACTInvestor]

I have to agree with the above comments. They are in a contract. If they plan on breaking their lease in 6 months, better they pay the re-letting costs and pay rent until a new tenant is found than you.

 

[Don K]

Are you having fun there Dazz?

 

[Kristine..]

Hi NBS

And your Property Manager is calling you because?

There is nothing to discuss. The property was ‘on the market’, they applied to lease it for twelve months and you agreed. That’s it. Done deal.

If, during the period of the term agreement, they have reason to move on, then the lease contains all the period of notice, and recompense, which will be required by them to ensure that they keep up their side of the bargain.

There would be a hue and cry if the shoe was on the other foot.

Contracts are there for a reason, so that both parties can rely on the agreement. If they want to leave early, they can certainly do so, but if you had known that they had only wanted a six month lease you may have chosen another tenant.

You have had to pay Letting Fees based on the full annual value of the lease and everybody has behaved properly on your side of the table in arranging and executing the contract.

You have made it clear to the Property Manager that the lease stands and unless and until they actually give notice and do want to move out there is nothing further to be said or done

Hope this helps
Kristine

 

[NBS]

Thanks for the replys,

The tenants have already been in the place 6 mths and it was due to run out in a week or so. They wanted to sign a 12 mth lease which was no issue to me and it was signed a couple of weeks ago.

I was suprised they have now come forward to reduce the lease to 6mth. I have a feeling it stems from thier car blowing a gearbox and are now buying a new (2nd hand) one. This I feel has put x pressure on funds and I guess they are looking at moving out to a cheaper place closer to his work to help make ends meet.

That is my take on it.

In the end thats not my fault and a contract is a contract and I have told the PM (as I have said in my first post). However I don't feel the need to have any bad blood, if another tenant can be found in 6mth and meets all the requiremets at the same price I have no issue of them leaving. I feel giving them an out is better than shutting the door and have a ******* of tenant in for 12 mths. I also don't need them to pull a hardship case on me.

I feel the PM was only feeling the waters and gauging my response to the issue. Renting the place appears not a big issue as plenty are looking and they are short of properties.

Anyway will see what happens, have to visit the neighbours sometime in the next week so I guess they will engage me while I'm there.

Brian

 

[jaycee]

Thanks for the replys,

The tenants have already been in the place 6 mths and it was due to run out in a week or so. They wanted to sign a 12 mth lease which was no issue to me and it was signed a couple of weeks ago.

I was suprised they have now come forward to reduce the lease to 6mth. I have a feeling it stems from thier car blowing a gearbox and are now buying a new (2nd hand) one. This I feel has put x pressure on funds and I guess they are looking at moving out to a cheaper place closer to his work to help make ends meet.

That is my take on it.

In the end thats not my fault and a contract is a contract and I have told the PM (as I have said in my first post). However I don't feel the need to have any bad blood, if another tenant can be found in 6mth and meets all the requiremets at the same price I have no issue of them leaving. I feel giving them an out is better than shutting the door and have a ******* of tenant in for 12 mths. I also don't need them to pull a hardship case on me.

I feel the PM was only feeling the waters and gauging my response to the issue. Renting the place appears not a big issue as plenty are looking and they are short of properties.

Anyway will see what happens, have to visit the neighbours sometime in the next week so I guess they will engage me while I'm there.

Brian

What else can you do ? Something came up, you have 6 months notice - better than the way it normally works out.

 

[MangoMadness]

I think having them as a tenant already in place makes a world of difference and as it was only 2 weeks ago that they signed the lease I would be inclined to let them change it.

They made a mistake, they have already been paying rent and as long as they have been a good tenant then I wouldnt mind them changing.

If it had been a new tenant I wouldnt be as forgiving

 

[russellpeter]

NBS

this will make your property become available in Feb. one of the best times to find a new tenant. shouldn’t be a problem. better than your tenants not baying rent and have to kick them out costing you a lot more.