NSW 2 weeks Break lease fee

Hi all,
I received a call from my agent yesterday advising me that my tenant called saying he has lost his job and could no longer afford to pay the rent anymore and hence intended to move out soon.
From what I understand, the tenant is liable to pay 2 weeks of rent for breaking the lease early since there is just under 6 months left in the current lease.
The property is currently being rented out at around $30 to $40 below market rate. My agent advised that if I charge my tenant the 2 weeks break lease fee, I will only be able to advertise for a new tenant at the existing rent and not at a higher rate. She advised it may be better for me to waive the 2 week break lease fee and get a new tenant in at the higher rent.

Can someone advise if this is ******** or if it is indeed the law? Thanks in advance

 

This is correct.

 

No it’s not at all.

 

This might help. Changes in NSW..in March 2020.

How to end a lease early: state by state rules for breaking a fixed-term lease

 

No idea

 

Two weeks rent is the end of the tenant's liability ie paid up to the vacate date + two weeks break fee, then it's a get out of gaol free card.

You can advertise at market rate for a new term as the outgoing tenant has been released of any responsibility and you of any duty towards them.

They have it wrong on two counts.

1. Break fee - they cease to be the tenant
2. Fee is not dependent upon reletting the property.

If the tenant was seeking to assign the remainder of their lease, then they would continue paying rent until a replacement is found, be paying a % of the agency costs, advertising, lease preparation etc based on the current rent.

 

Time to get an agent that understands the laws perhaps

 

Absolute ******** and the agent is clearly living in the past just like the clown agent wanting to charge lease prep fees to a tenant.

What rock are these so-called agents living under... seriously.

C O R R E C T !!!!!!

Could not put it better myself.

 

Allowing a tenant to break a lease and then re-leasing the property to another tenant are mutually exclusive events.

 

Thanks to all for your replies.

 

I'd let them go, be thankful for the honesty and integrity in what they're trying to do, and find a new tenant ASAP. Been on the other side of that position before and its not a nice place to be. Ideally wouldn't be charging someone 2 weeks rent who has just lost their job and under clear financial stress.

 

The legislation is as confirmed above, you're able to charge 2 weeks break fee and re-let the property at market rate.

It changed more than 2 years ago so something is very wrong with your current PM.

Whilst you have the benefit of higher rent earlier, you have expenses in potential vacancy & letting/marketing fees. If you wanted to (and this is completely up to you) you could see if the tenant will give the agents access asap to hold inspections, so that you can minimise vacancy and then consider reducing the break fee to just the out of pocket expenses.

 

Very noble sentiment, but why should the LL be out of pocket due to tenant's circumstances? I'm sure the LL has financial commitments too.

 

Thats true, its certainly up to the individual and contracts are contracts.

I'm simply saying what I'd do in this situation. People losing their jobs and homes in short succession can be a very difficult experience. This has happened to me (albeit I was the child), and it was devastating experience to people I love.

I'd be showing compassion and kindness as much as I could in this situation, particularly given the integrity of the request (they are not asking to stay, rent waivers, etc). By the sounds of it, the PM is seeking to do the same.

 

Because balanced against the prospect of a drawn out rent arrears - eviction process, two weeks may seem more palatable to this landlord.
If the outgoing tenant is obliging he/she may help in enabling another tenant to move in asap.
It could result in an acceptable outcome for all, but only the OP has the info to guage that.

Because one can make a claim it doesn't mean one has to.

 

Totally get what you are saying. Most landlords are obviously in better position to take a loss than a tenant who has lost a job. I’m not a heartless ******* and more than willing to compromise.
Interesting to hear you say the PM is seeking to show compassion. Do you think the burden of any financial loss should be solely borne by the LL? Maybe the PM can show compassion too by waiving some or all of the advertising costs and the 1 week letting fee?

 

Because people should have empathy, look after each other and help one another that should be its own reward. No need to be greedy self absorbed or to profit from others misfortune. I never charge break fees just put a new tennant in usually at a higher rent. Any lease fees would have to be paid anyway when the lease expires. It is no skin of my nose but I have self respect and the tenants respect. If a house is going up in value $500 a week and equity used to make more nothing is lost .

 

The situation is a Break Lease and the 2 week fee in NSW actually was introduced to limit the costs to the renter in this situation.

In some states and previously in NSW the tenant was liable for all prorated costs until a new tenant was found, this in most cases is significantly more than 2 weeks rent, especially when one considers PM advertising / lease fees, vacancy etc etc.

By all means, let your tenant off at no cost, but the RTA is already heavily weighted in favour of the tenant in these cases.

 

I believe that rather than an act of generosity it was introduced to provide a transparent termination penality.

The problem with the old system was that it required a landlord to make 'all reasonable efforts to find a replacement tenant' (or words to that effect).
With no real incentive to actually comply with such a verbal salad an alternative system was needed to prevent clogging a system with the inevitable disputes.

 

Do you mean your own PM?

It's fine for them to suggest being compassionate but it's not okay for them to lie or be expressly wrong about how a break lease works.