Breaking/terminating a lease before it has even started (NSW).

We have been renting a house since June 2105. We have been looking for a new PPOR since that time.

Prior to June this year we started negotiating for a new lease term.

We wanted a 1 year lease from Jun 2016 to Jun 2017.

We were offered and signed a 6 month lease (lease 1) from 01 Jun 2017 to 01 Dec 2017, with the agent promising to try to get the landlord to agree to an extra six months lease (lease 2) from 01 Dec 2017 to 01 June 2018.

A few weeks later the agent confirmed that the landlord had now agreed to an additional 6 month lease (lease 2) from 01 Dec 2017 to 01 Jun 2018. We agreed to and signed lease 2 on 04 July 2017.

We have now purchased a new house which is tenanted until 17 Jan 2018.

We wish to move into our new house straight away on 18 Jan 2018.

As such we would like to break the additional lease(2) (which hasn’t yet started) on or around 25 Jan 2018.

According to the terms and conditions of lease 2 this would result in a six week break fee.

Obviously the best course of action will be to speak with the agent and try to renegotiate lease 2 to end on 25/01/18.

However prior to doing that I was wanting some advice on whether we are currently legally entitled to terminate lease 2 without penalty due to the fact that the term hasn’t yet commenced.

Knowing the answer this would provide a firmer footing for negotiations.

Many thanks in advance.

 

Legal advice would be recommended. You may then seek a discussion with the managing agent. They may have willing tenants and a sublease could b allowed. Start with legal advice

 

Thanks Paul.

Meanwhile some edits...stuffed up some dates!
Renting since June 2015 not 2105!
We originally wanted a lease from Jun 2017 to Jun 2018. Not 16 to 17.

 

The fact that the lease hasn't commenced yet doesn't really affect its enforceability. I can't see why the landlord wouldn't be entitled to the normal full break lease fee.

 

I was able to break a lease before it began (did not move in) due to extraordinary circumstances (job loss, health problem) in the past. I did not even try and negotiate. I politely grovelled. In this situation I would just pay the six weeks and move on.

 

That's extraordinary circumstances though. The OP does not have this.

 

Yes, that's why I would pay up.

 

A contract is a contract as was stated up above. If you're lucky, they might have had multiple applications and can fill the space but if not, you're liable for any and all break fees anyway. If they're really nasty, they will make you pay it anyway even if they do have other tenants lined up...I've seen it happen with certain agencies!

 

That's interesting. Can they charge you a six week fee up front in NSW? In QLD you simply pay "the Landlords reasonable costs of re-letting" which means rent until the next tenant moves in and generally a let fee.

 

You have executed a lease with a new end date of June 2018, this has likely superceded the lease expiring Dec 2017. You would most likely be liable for reletting fees.

 

Since you would have already started your second half of lease this DEC 2017, if you were to move out half way of course you are liable for break lease fee.

A few things to keep in mind :
If you want to terminate lease 2, where are you going to live in DEC-Jan ? Good option though.

You have purchased a new home but has the contract settled yet?

Will you as the landlord now be able to move the tenants out at your new place? What if they refuse to move or need a few more weeks?