Tenants to remove a name from lease

P

paguatao

I have joint tenants and one of them is moving out by mutual agreement (the right one is staying ...). My PM is telling me this is a "break lease" situation, and to safeguard my rights as an owner, we need to do a new lease. Not only that, but a Final Inspection. They said that the bulk of the break lease fees will be payable by tenant but they also want to charge me a lease renewal fee (half a weeks rent).

I'm very happy that the right tenant is staying as she is looking after the property. From my understanding, this isn't a break lease situation, I've checked with Department of Consumer Protection. The latter advises that as long as both tenants write and sign that the other tenant is now responsible for all costs, there is no need for a new lease to be done.

Either way - new lease or not, I don't understand why the PM is charging a bunch of fees just to type up a new doc?

Can anyone clarify? Thanks
 
paguatao said:
I have joint tenants and one of them is moving out by mutual agreement (the right one is staying ...). My PM is telling me this is a "break lease" situation, and to safeguard my rights as an owner, we need to do a new lease. Not only that, but a Final Inspection. They said that the bulk of the break lease fees will be payable by tenant but they also want to charge me a lease renewal fee (half a weeks rent).

I'm very happy that the right tenant is staying as she is looking after the property. From my understanding, this isn't a break lease situation, I've checked with Department of Consumer Protection. The latter advises that as long as both tenants write and sign that the other tenant is now responsible for all costs, there is no need for a new lease to be done.

Either way - new lease or not, I don't understand why the PM is charging a bunch of fees just to type up a new doc?

Can anyone clarify? Thanks
Click to expand...

I have had this same scenario recently in WA with completely different advice from Dept of CP, but I believe is correct anyway.

It is not a breaklease, but a new lease will be required.

You will need:


  • Inspection of property to ensure it is the same condition as start of previous lease or new Exit / Entry Condition Report as necessary.
  • Cancellation of existing lease. A simple one page document prepared stating that the current lease document is cancelled effective from <insert date>.
  • A new lease prepared effective from <insert date>.
  • Bond Transfer. A Bond transfer document signed by outgoing tenant relinquishing any entitlement to Bond monies. If this tenant currently is entitled to a share, you would need remaining tenant to pay them out as Bond would then be held in remaining tenant's name only.

Your PM may be entitled to charge for preparation of new documentation, but I certainly would not be paying them a leasing fee. If they insist, get rid of them as they are simply gouging.

Your question on why PMs charge so much?........ Because they CAN!
 
paguatao said:
From my understanding, this isn't a break lease situation, I've checked with Department of Consumer Protection. The latter advises that as long as both tenants write and sign that the other tenant is now responsible for all costs, there is no need for a new lease to be done.
Click to expand...

I think I would agree with Consumer Protection on this one.

I can't see any benefit to an owner in doing up a new lease...?
 
thatbum said:
I can't see any benefit to an owner in doing up a new lease...?
Click to expand...

Unlikely situation but consider a scenario (without new lease) but with remaining tenant now accepting ALL responsibility ............

Old tenant decides he wants to move back in using his 'spare' key .............. what legal comeback does the exiting tenant or LL have given that old tenant is still written on the lease?

Read:Nightmare:eek: Don't leave such items to chance.
 
paguatao said:
In googling, I came across this:
http://empm.com.au/assets/uploads/M...V- Add or Remove Occupant or Tenants name.pdf

which is along the lines of what the DoCP also said. Write up and both tenants sign saying that xxx is taking over responsibility of costs
Click to expand...

This is how we removed one person from the others on a lease. The person leaving was not convinced this covered her so I did up a new lease. I didn't charge anything, but I am a DIY landlord.

My son's partner had trouble with a PM allowing him out of his lease and insisted that everything had to be moved out of the house so that a new entry condition report could be done, because not to do that would mean the person left on the lease was taking responsibility for the condition of the place. It seemed a bit silly to me.
 
Joe D said:
Unlikely situation but consider a scenario (without new lease) but with remaining tenant now accepting ALL responsibility ............

Old tenant decides he wants to move back in using his 'spare' key .............. what legal comeback does the exiting tenant or LL have given that old tenant is still written on the lease?
Click to expand...

Well the old tenant probably would have handed back the 'spare' key - and also signed something saying that they vacated the property previously. Which would practically have the legal effect of denying them the avenue to do this.

But even in the unlikely scenario, its an issue between the two (former) co-tenants - I can't see how it directly affects the LL.
 
paguatao said:
They said that the bulk of the break lease fees will be payable by tenant but they also want to charge me a lease renewal fee (half a weeks rent).
Click to expand...

WHAT?!

WA charges are insane. So are the ones that insist everything is moved out and a whole new condition report completed.

All you do is something similar to paguatao suggested and transfer the bond. If you really want, you can draw up a new lease altogether removing the other tenant, but to charge half a weeks rent is ludicrous!
 
if a break fee is justified by the agency (which it has not) you get paid the fee less the lease prep fee. As it isn't a break of lease, ie one tenant is remaining whilst the other is parting with possession just vary the lease to sole occupancy & bond adjustment.
 
That only covers the bond though. I'd be interested if the RTA specifies the removal of a name or defines "break lease".

According to my PM so far:
If you add or remove a name form the lease, that is a break lease.
What we would normally do is do up new lease documents....
Technically, if there is a change in the tenants, then it is a break lease.

So they want to charge the tenants "The unexpired portion of the owner’s letting fee" based on a vacate date and original expiry of the lease ..... even though they are "technically" not vacating!

And then charge me a lease renewal fee (half weeks rent is specified in my contract).

I've basically said no. That the lease can remain in both names, that the tenants sign who is leaving and who is staying, who is responsible for all costs etc. Bond variation is the easy bit. It's the lease that seems to be the problem!

The PM has been on this forum, so far, still not 100% happy with them :(
 
paguatao said:
According to my PM so far:
If you add or remove a name form the lease, that is a break lease.
What we would normally do is do up new lease documents....
Technically, if there is a change in the tenants, then it is a break lease.

So they want to charge the tenants "The unexpired portion of the owner?s letting fee" based on a vacate date and original expiry of the lease ..... even though they are "technically" not vacating!

And then charge me a lease renewal fee (half weeks rent is specified in my contract).
Click to expand...

Well the short answer is that your PM is wrong. Incredibly wrong actually - I don't even know where they could have gotten that interpretation from.

So what's your plan? Hopefully to ignore your PM's advice.
 
Yep. Thanks to advice from here which confirms my own thoughts, I am basically saying this is how I want things. Not sure how they can say break lease costs will be calculated from a vacate date when there is no vacate date etc.

Maybe I should ask my PM on the forum here for his advice ... and why his company is giving me the wrong advice .... just to charge more money maybe ..??
 
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