Advice on my rental

Discussion in 'Property Management' started by Yinka Dare, 18th Aug, 2018.

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  1. Yinka Dare

    Yinka Dare Well-Known Member

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    i currently rent out my townhouse on a 1 year lease and there is 4 months left on the lease but the tenant wants to leave in a months time - breaking the lease 3 months early.

    I want to sell the property in 3 months time so no point getting another tenant in as no one will accept a 3 month lease. Just wondering if tenant is liable to pay the lease until this time if I do not agree on a new tenant? I’m not trying to be a dick but look after myself first.

    Any advice would be appreciated
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Will a sale in spring (in a falling market) yield a better result than a sale pre-Christmas?
     
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  3. MummyInvestor

    MummyInvestor Member

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    What state is the IP in?
     
  4. Yinka Dare

    Yinka Dare Well-Known Member

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    Seaford, Victoria.
     
  5. D.T.

    D.T. Specialist Property Manager Business Member

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    Every state has break lease rules, each with their own twist to it. The main premise on charging it though is actively finding a new tenant.

    So i think your options are:
    1) Sell now
    2) Charge break lease costs, find a new tenant, put them on a lease duration that suits everyone, then sell
    3) as per 2 but during tenancy and new buyer can inherit them (excludes owner occupier buyers but gives more control over timing)
     
  6. MummyInvestor

    MummyInvestor Member

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  7. Dean Collins

    Dean Collins Well-Known Member

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    Don't sell your property in the current market....wait until 2024+

    You are going to regret it in 20+ years from now.

    This said....why would you sell a property in December? Now is a better time.

    Let them break the lease in a month from now but ask them to cover half the rent eg 2 months.....and then use the extra month they paid to get the empty apartment for sale in October....but like I said...I wouldn't be selling in the current market.

    Technically they are liable for rent for the next 4 months...so 2 months is a fair amount if they agree to it.


    The costs tenant could be liable for include:
    • a reletting fee (usually one or two weeks’ rent). This must be based on the fee that the agent charged the landlord so it is a good idea to ask for a copy of the invoice
    • reasonable advertising costs
    • rent until new tenants move in or until the end of the fixed term (whichever happens first)
     
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  8. Joynz

    Joynz Well-Known Member

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    Have you been to Melbourne in winter? It’s been raining here all day and there are thunderstorms forecast for tomorrow morning...
     
  9. Dean Collins

    Dean Collins Well-Known Member

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    The tenant isn't moving out for a month.....then allowing a few weeks for marketing campaign you are talking about October Auction. This is what I meant by now.

    Less people would be looking to buy in December.
     
  10. ChrisDim

    ChrisDim Well-Known Member

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    In Victoria - same as NSW, your tenant is required to make you good for the 3 months they are breaking the lease early or all your costs to find another tenant - whichever is the cheapest.

    At the same time you HAVE to be trying to find another tenant so as to minimise the tenant losses. There is no requirement as to the duration of your new tenancy and if you are genuinely planning to sell after 3 months, then so be it. BTW, just because you are planning on selling in 3 months, you don't have to offer a new tenant 3 months. It could be any length as long as you disclose it to them (that's the requirement in NSW anyway).

    Justy thinking aloud here... Instead of going through the motions (and unnecessary costs and effort) of trying to rent it out which is not going to happen, why don't you try to come to some common ground with the tenant for those 3 months so that you can both move on? If they agreed for example to compensate you for 2 of the 3 months, wouldn't you take it? I would...
     
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  11. Tom Rivera

    Tom Rivera Property Manager Business Member

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    If this scenario were in Queensland- you would not be entitled to any compensation from them, as you are required to make every reasonable effort to minimize the cost to the tenant by finding replacement tenants. Not finding replacement tenants at all is "unreasonable".
    I would be asking the tenant to agree to something like paying an extra month of rent as a compromise?

    @Lil Skater, thoughts? Does Victoria differ on any key points?
     
  12. Travelbug

    Travelbug Well-Known Member

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    You can't expect the tenant to pay because you can't be bothered trying to get a new tenant.
     
    Last edited by a moderator: 19th Aug, 2018
  13. Angel

    Angel Well-Known Member

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    A month from now is mid September. Unless it is already in perfect condition, allow a week to get it freshened up for sale. When is the Grand Final weekend? Work out when is the best time to market and have inspections, late September and early October.
     
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  14. Lil Skater

    Lil Skater Well-Known Member

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    Agree with @Tom Rivera

    The other option is doing a 6 month lease, delays you a bit but you get your break fees.
     
  15. Ray White Marsden

    Ray White Marsden Logan Property Specialist

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    As mentioned above If it was in QLD i would suggest realising them if you do have an intention to sell you cannot enforce a break lease situation as you will not be mitigating the tenants loss by finding a new tenant and if and when you did find a new tenant you then have to wait another two months before listing for sale.
     
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  16. Tom Rivera

    Tom Rivera Property Manager Business Member

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    Mitigate! That's the word I was looking for!
     
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  17. Illusivedreams

    Illusivedreams Well-Known Member

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    Tenants have a lot of protection.
    In business you break contact you pay fees.

    IN residential so many complaints from tenants action groups yet their is so much protection for tenant.


    Question
    Can an owner brake the Lease with tenant?
     
  18. thatbum

    thatbum Well-Known Member

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    There's no special treatment for tenants in a break lease situation (well except for break lease fees in NSW and ACT) - its just the normal application of common law rules for a repudiation of a contract.

    An owner can 'break lease' as well, as long as they are prepared to wear the liability.
     
  19. dabbler

    dabbler Well-Known Member

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    Sounds like if you let them go now it is a good time to prepare to sell, and you really want to wait 3 months, you can do 3 months of improving the place maybe ? leaving now and quick tidy up is what I would do now if you must sell.