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Do tenants have options if they want to break their lease? (Vic)

Discussion in 'Property Management' started by skyfall, 26th Aug, 2015.

  1. skyfall

    skyfall Well-Known Member

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    I've got a tenant in Melbourne who wants to break her lease. I'm happy to do this because she's always complaining about petty maintenance issues. So I told the PM to let the tenant know she can break but has to pay the rent until we find a new tenant plus advertising costs.

    The PM said the tenant has these 3 options and they can choose which option they prefer:

    1. Lease Break with expenses.
    2. We let them out of their lease with no charges, as long as they give a minimum 4 weeks’ notice.
    3. Tenant transfer.

    I want to do #1 but the PM says the tenants have a choice and they choose #3, a tenant transfer. Is this correct?

    This was the email from PM:
    The tenant has emailed me asking about completing a tenant transfer. I'm worried they will put a friend into the property, with a similar mentality on maintenance. We could take this opportunity to release them from their lease agreement early (lease is up in December) so we can find completely different tenants with no ties as it is inevitable for me to do this soon anyway. December is also a slow leasing month, as most prospects like to move in the new year.
     
  2. thatbum

    thatbum Well-Known Member

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    Sort of correct. You as the landlord simply have to take reasonable steps to mitigate your loss from the break lease.

    It is probably reasonable to accept a 'replacement' or 'transferred' tenant if your outgoing tenant has found one, subject to the usual basic tenancy checks.

    Refusing the new tenant because they are a friend of the old tenant, and you suspect they will be annoying about maintenance is probably not a reasonable step in mitigating your loss.
     
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  3. MGF

    MGF Well-Known Member

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    What are the chances the new tenant will complain about maintenance issues? I'm not sure people are friends because of their similar views on property maintenance! Maybe it's a co-worker?

    Is there a risk of not renting the house easily?
     
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  4. Lil Skater

    Lil Skater Well-Known Member Business Member

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    Friend or not, you need to mitigate the tenants loss.

    First step is the tenant wishing to transfer needs to fill in an application, PM needs to process it and come to you for approval. You have every right to knock them back if they're not suitable.

    If the situation does go to VCAT, you need to show why the tenant wasn't acceptable. Ie. Affordability, poor references etc.

    If they're not suitable, they can break their lease but break charges will apply. Simples.

    If the tenant is that bad though, be prepared for VCAT....
     
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  5. thatbum

    thatbum Well-Known Member

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    Agree with you broadly but just a caveat on the above sentence - its not "every right" to knock them back.

    I would be very careful with your reasons for knocking back a prospective tenant - you want to be able to defend yourself at VCAT later to say that you acted reasonably.
     
  6. skyfall

    skyfall Well-Known Member

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    Thanks guys. I've emailed the PM and asked her to get the tenant to make a transfer application. Then the PM can the process it, do the normal checks and then I'll decide if they're ok or not. I think the biggest issue is if the friend she nominates wants to spend the time and money moving into a place with only 3mths left on the lease. I'll keep you posted.
     
  7. Kael

    Kael Well-Known Member

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    Had a similar situation with an old tenant in Melbourne. I was fortunate though, as the tenant was a decent tenant. They stated that they didn't feel safe in the property as apparently someone was knocking on their front door at 4am in the morning, and didn't feel safe because of their 2 year old baby. They advised my PM in a letter that they were willing to pay for the re-letting fee and the advertising fees if they were allowed to move out of the property and gave 4 weeks notice. They also stated that if I didn't approve of this, that they would go to VCAT. While it was unfortunate to lose the tenant, I was grateful that they paid those fees and allowed my PM to find a new suitable tenant that passed all checks.

    Good luck with your situation, hope you pull through it okay!
     
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