One tenant wanting to break lease, the other wants to stay

Discussion in 'Property Management' started by KayTea, 15th Dec, 2022.

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  1. KayTea

    KayTea Well-Known Member

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    2 tenants (family members) have both recently signed a 6-month lease, and moved in to a property together. Both names are on the agreement.

    Person A has decided they want to leave, but Person B wants to stay. What are their options?

    Person A has suggested finding a 'random person' to move in and take over the 19 weeks still left on their part of the lease. Person B has said "no way" - they don't want to live with a total stranger.

    Can Person A just leave, with their name on the lease? What if they don't pay the rent for the 19 weeks still on the lease? What are the options for Person B?
     
  2. jaydee

    jaydee Well-Known Member

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    They are both jointly responsible for rental payments and compliance with the lease.

    If one leaves, the full rent is still due until lease end and the PM or Landlord will take action against one or both tenants to make up any shortfall.
     
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  3. KayTea

    KayTea Well-Known Member

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    Yes, but what if Person A just 'moves out'? What can Person B do?

    And is there a legally enforceable situation where Person A is allowed to find a random person to take over their half of the lease and move it, without Person B's approval?
     
  4. Trainee

    Trainee Well-Known Member

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    They cant do it without YOUR approval….. it would be a new lease. Which person B would also have to sign.

    in this market, you could let them both break it and find a new tenant.
     
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  5. KayTea

    KayTea Well-Known Member

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    Thanks @Trainee - thankfully, this isn't my situation. It's a friend's child. They moved in a with a cousin and now the cousin wants to break the lease and move back home the parents. However, my friend's child wants to stay in the property at least until the end of the lease.

    They can't afford the rent on their own, and also don't like the idea of living with a random stranger (selected by the cousin). The cousin seems to think that getting any random person to take over their part of the lease can remove them from their half of lease agreement, and would allow them to move back home sooner rather than later.
     
  6. wylie

    wylie Moderator Staff Member

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    Person A needs to learn a life lesson. Sign a legally binding document and fulfil that commitment (with a few ways of making changes of course).

    I guess if Person A moves out and Person B can't pay full rent, he/she will be issued with appropriate notices.

    It seems Person B may end up losing out financially due to the selfish actions of Person A.
     
  7. thatbum

    thatbum Well-Known Member

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    This isn't really true.

    The remaining tenant will need to make up the full rent somehow, and probably the best way to to get a housemate on a lodging contract. There's no permission from a lessor required for this.

    The outgoing tenant will have to pay their share of the rent only until the remaining tenant either finds a replacement housemate, or refuses to take reasonable steps to mitigate their loss.

    For a lessor in the situation, there's probably quite a few options, but I would generally advise a lessor to not change the lease unless all the tenants are breaking lease or wanting to terminate.
     
  8. KayTea

    KayTea Well-Known Member

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    Thanks so much - I've passed this information on.
     
  9. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Pose this question as it looks like they are being painful and past behaviour can be a prediction of future behaviour,

    Also if you have LLI you may be able to make a claim for lost rent, worth asking.
     
  10. Michael Mitchell

    Michael Mitchell Well-Known Member

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    And assuming the would-be remaining tenant(s) agree to let the would-be vacating tenant off the lease, that's not a unilateral decision, unless granted by xCAT.
     
  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    How they sort out how the rent is paid etc is a matter for them. The lease is a legally binding contract for two people to pay. Further example why you never let to family. Here they dont even seem to understand a lease is a contract.

    I would offer a plan B... BOTH move out and you will agree to brea the lease then go lease it through an agent.
     
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  12. Piston_Broke

    Piston_Broke Well-Known Member

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    I thought this would be covered by the usual "no subletting without lessor permission" in tenancy contracts.

    Not that i would've cared too much as an owner as long as the rent was paid and th IP well kept.
     
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  13. Zepth

    Zepth Well-Known Member

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    getting another housemate in to replace the one that’s leaving isn’t subletting
     
  14. Michael Mitchell

    Michael Mitchell Well-Known Member

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    My leases have this in the special terms, interested to hear @thatbum's legal perspective on how valid it is though:

    upload_2022-12-16_13-3-25.png
     
  15. thatbum

    thatbum Well-Known Member

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    So the short answer is that it’s more likely to be void/unenforceable than not.

    You can’t really control or prohibit sub-licensing or contractual sub-licensing by a tenant. The “commericial gain” thing is interesting - maybe there’s something to that, but I suspect not. Pretty hard to define what it means too. Would this scenario be commercial gain for example?
     
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  16. SeafordSunshine

    SeafordSunshine Well-Known Member

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    I am not a legal person so this isn't legal advice.


    Both signatories to the lease are jointly and severally responsible.
    ' I think ' this means you signed the legal document... you pay the dues... (rent)
    whether or not the signatories stay or go.
    Bank of Mum and Dad may be helping out....or not.
    I hope this helps.
     
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  17. Joynz

    Joynz Well-Known Member

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    Like any flat share situation where a flatmate leaves, the remaining tenant should put out a ‘flat mate wanted’ ad and interview prospective flatmates - then select the one they like best.

    Inconvenient but not hard. The new person won’t be ‘random’ in that case.
     
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  18. KarenMH

    KarenMH Member

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    My business strategy would be that I would ask for tenant b to put in writing they approve the changes and also ask them to send through current wage slips and bank statements etc, to show they have the income to afford the property alone. I would advise them I will seek approval from the owner. If they don't have the income, I would not allow the lease change. I would advise tenant b they may ask someone else to go on the lease with them as an alternative but this person would have to officially apply and be approved.
     
  19. tedjamvor

    tedjamvor Well-Known Member

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    Person A is lucky it's only a six month lease. They need to suck it up
     
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  20. thatbum

    thatbum Well-Known Member

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    Why? What would be the point of this?
     
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