Break Lease fee - QLD

Discussion in 'Property Management' started by Ryan23, 8th Oct, 2019.

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  1. Ryan23

    Ryan23 Well-Known Member

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    So I have been told by my PM that the tenant does not have to pay a break lease fee (to compensate for me being charged a re letting fee) as they are leaving within 6 weeks of the lease expiring.
    I am waiting to hear back from the PM but cant find any info on this in the lease or in the legislation. Do any QLD PM’s know more info on this?

    Thank you
     
  2. thatbum

    thatbum Well-Known Member

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    I believe QLD just uses the common law rules on break lease. So its just a % of fixed costs (like a letting fee) based on how much as a % of the lease is left when a new tenant is found. It might be pretty close to zero in your case if there's only 6 weeks left.
     
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  3. D.T.

    D.T. Specialist Property Manager Business Member

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    How long has the tenant been there for? Are you planning on leasing it again afterwards or move into it, sell it, etc?

    QLD legislation allows for rent until new tenant is found or til end of lease, whichever happens sooner, on the proviso that you've minimised this best you can (ie find a new tenant quickly).

    Unlike other states, QLD doesn't have a set amount defined in legislation. Eg here in SA we have a govt prescribed formula for calculating. QLD legislation only says 'reasonable costs incurred', and being that you're near the end of the lease there might not be an amount worth claiming without further info from you.
     
  4. Ryan23

    Ryan23 Well-Known Member

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    Hi D.T.

    Thank you, Tenant has been their nearly 18 months, and it has been re-leased in a couple of weeks. That does make sense as it would be re let again anyway.
     
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  5. Ryan23

    Ryan23 Well-Known Member

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    Thanks @thatbum, that sounds like what the PM is getting at.
     
  6. thatbum

    thatbum Well-Known Member

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    Although you would still be entitled to any loss from a vacant period assuming you take reasonable steps to mitigate your loss.

    So if a new tenant was found for the day after the 6 weeks is up, you would be entitled to no fixed fees, but still the 6 week's rent, generally speaking.
     
  7. Ryan23

    Ryan23 Well-Known Member

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    Yeah they are paying until the day before the new tenant moves in and that will be 1 month before their lease would have expired anyway. First time dealing with a break lease.
     
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  8. Michael Mitchell

    Michael Mitchell Well-Known Member

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    I have been through QCAT with this particular item before. The adjudicators consideration was time left before the Lessor would have to incur the expense. Long story short, there is no hard and fast rule. In the case I ran, the tenant defaulted and got evicted shortly after commencing a 12 month lease - the adjudicator saw it reasonable that the Tenant pay compensation to the Lessor for the re-let cost. On the same logic it could be inferred if the re-let event occurred relatively close to the end of the fixed term tenancy, you'd probably want to consider if it was worth challenging for compensation over it. With that said, general rule of thumb is never offer anything - go after everything you're entitled to and let the Tenant choose if they want to dispute/fight it. When the shoe is on the other foot, most Tenants pull out the ‘professional victim’ card and try and take the Lessor for everything they can.
     
    Last edited: 8th Oct, 2019
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