NSW Property manager served the wrong notice to tenant (still within lease period)

Discussion in 'Property Management' started by Tenex, 15th Aug, 2019.

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  1. Tenex

    Tenex Well-Known Member

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    I have an investment duplex property in NSW (Baulkham Hills).

    It has been managed by the local Raine and Horne agency for the past year or so. We had a particularly interesting tennant for the past few years in one of the units of this duplex that I was planning to ask them to move and then renovate the property and put it up for sale.

    I asked the managing agent when their lease is up and how we can ask them to move. He advised me that they are within lease until 18th of November and that we cannot ask them to leave while they are still within their lease period.

    I agreed with the agent to provide the tenant with a notice that their lease is not being renewed so we have given them adequate notice to find another property from 18th of November onwards.

    Apparently the agent has served the agreed notice and I was lining up tradies to provide quotes for various things and have them lined up to start works from 18th of November onwards.

    I have just been informed by the agent today that the tenants are planning to return keys and move out by Wednesday of next week, basically out of blue!

    This agent has been all over the place in that he usually doesnt remember whether a tenant is still in or out of a signed lease and if they are in a lease what are the dates (we have had issues in the past).

    I know for a fact that the tenant is still within lease period as we just renewed them a few months ago and agent advised me of this as well when we agreed to serve them with notice that they are not being renewed.

    The agent is now telling me that he has served them a 30 day notice (I dont know what that is) and he is going to call the tenant and get back to me.

    So either the tenant is moving within their lease and they shouldnt be allowed to do so unless if they get my written permission OR the agent has stuffed up bad by serving them a notice which allows them to leave early (I dont know what he has served them).

    Is it possible to stop the tenant from leaving early if they are still within the lease and I have not agreed to anything in terms of them leaving? if not and the agent has served the wrong notice, how do we take action against the agent?

    I would appreciate it if anyone has experience in this area and can share with us their thought.
     
  2. TMNT

    TMNT Well-Known Member

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    I think the most important thing is to find out what actual notice was sent and if the tenants are aware they cant leave within the lease, and if your agent has made any other stupid mistakes
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    AFAIK, the agent/owner can issue the termination notice at any time prior to the expiry to the lease however the termination date can be no earlier than the contracted dates. The exception is a breach of lease termination.

    "3. Ending a fixed term agreement If this agreement is a fixed term agreement it may be ended by the landlord or the tenant by giving written notice of termination. The notice may be given at any time up until the end of the fixed term but cannot take effect until the term ends. The landlord must give at least 30 days notice and the tenant must give at least 14 days notice." (extract from Pg 10 Notes - NSW tenancy agreement).

    The Agent should be responding to the tenant advising that they are providing more than the required 30 days notice for termination noting that the lease is valid until expiry and that the tenant has a responsibility to honour the lease until the expiry.

    I note that the timing of the expiry is unfortunate as you barely have any time to do any maintenance/painting/preparation in order to run a 4 week auction campaign prior to Christmas.
     
  4. Tenex

    Tenex Well-Known Member

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    I have now contracted Fair trading NSW

    From what their officer is saying, tenants can break lease within signed lease agreement regardless of what notice they have been served.

    From what she told me, if they are breaking lease within their first half of contract (which is the case in this instance as well), they are liable for 6 weeks worth of rent, if they are breaking within second half of contract they are liable for 4 weeks worth of rent.

    There is an exception to the above and that is if they are in breach of contract or in rent arrears which is basically immediate termination and then you seek damages accordingly.

    Would anyone else be able to confirm that?
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Does Cl 41 apply?

    "Additional term—break fee [Cross out this clause if not applicable]

    41. The tenant agrees that, if the tenant ends the residential tenancy agreement before the end of the fixed term of the agreement, the tenant must pay a break fee of the following amount: 41.1 if the fixed term is for 3 years or less, 6 weeks rent if less than half of the term has expired or 4 weeks rent in any other case, or
    41.2 if the fixed term is for more than 3 years, [specify amount]: This clause does not apply if the tenant terminates the residential tenancy agreement early for a reason that is permitted under the Residential Tenancies Act 2010. Note: Permitted reasons for early termination include destruction of residential premises, breach of the agreement by the landlord and an offer of social housing or a place in an aged care facility. Section 107 of the Residential Tenancies Act 2010 regulates the rights of the landlord and tenant under this clause.

    42. The landlord agrees that the compensation payable by the tenant for ending the residential tenancy agreement before the end of the fixed term is limited to the amount specified in clause 41 and any occupation fee payable under the Residential Tenancies Act 2010 for goods left on the residential premises."

    [​IMG]
     
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  6. ChrisDim

    ChrisDim Well-Known Member

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    Do you know if the agent actually told the tenant that you are planning on selling the property? If so, then under section 100 of the NSW residential tenancies Act, the tenant only need to give you 15 days notice even on a Fixed Term lease.

    BTW I know that you wanted to do the right thing by the tenant but giving them 4 months advance notice that their fixed term lease wouldn't be renewed, is highly unusual to say the least
     
  7. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    Why not just look at the legislation, the residential tenancy act
     
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  8. Tenex

    Tenex Well-Known Member

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    I have just found out that the issue has been that the agent has basically been informed last week that they are looking to break lease but didnt bother to tell me until 2 days ago.

    He has not bothered to send me their written notice but just vaguely mention it in an email he has sent me 2 days ago amongst many other things that he has mentioned.

    The law appears to be on the tenants side but also it doesnt help the agent usually couldnt remember things and didnt bother to properly inform me of whats happening. When I talked to him this morning he thought they are not even within their lease period.

    The wording of his notice to them only allows for a month notice and it is unclear whether we will even get that one month notice or not.

    Just a big mess that may end up in a tribunal hearing.
     
  9. Dan Wood

    Dan Wood Well-Known Member

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    And a new PM for you, I hope...
     
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  10. PMC Property

    PMC Property Sydney, Brisbane, Newcastle, Toowoomba Business Member

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    Bit early for that. Do you or the PM actually have in your possession a signed copy of the lease ending 18th November? That is probably step one.

    - Luke
     
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  11. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    If the tenant has a fixed term lease to 18th Nov and are breaking the lease, it depends on the lease agreement that was signed, more common in the past was that tenants pay reletting fees and rent until another tenant can be found, though more recent leases (maybe in the last 2yrs) generally have the 4 weeks payment in the second half of the lease period.

    Ask the agent for a copy of their signed lease, the issued notice and the correspondence from the tenant. It sounds like you have to do their job for them unfortunately. I wouldn't leave the under half of the duplex under their management..
     
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