Tenant Breaking Lease - Advice

Hang on, that's a bit of a stretch if you're describing this situation with the OP's tenants. While I agree with your sentiments when talking generally, from the sound of things, the tenants had to break lease because they split up.

In terms of trying to terminate for hardship, well maybe there's some legs to that as well (in a moral and legal sense) because the remaining tenant is being practically lumped with the full joint liability of their former relationship.

From the tenant's point of view as well, I doubt they know the reasons why applications from prospective tenants are being rejected - so if I was advising them, I'd be cutting off rent payments until I was satisfied that the landlord was being reasonable in their refusals of new applicants.

Two sides to every story I guess - and personally I don't think the tenant is necessarily being unreasonable either.

 

I dont know if Cutting off rent payments is good advice ??!!!! The agreement says ;under no circumstances stop paying rent -It is up to them to take it to the tribunal if they disagree with it

 

Its the correct legal advice in many situations. Agreements say lots of things that are in the landlord's interests but not in a tenant's interests to follow. And that are essentially void - which a term like that would be.

 

Regardless which state applies, a tenant should NEVER cease paying rent in the absense of a tribunal order/instruction. That is one straight forward issue that will get the tenant in all sorts of trouble. I know this isn't a direct concern for OP, but a surprise that a reply of such ignorance would be suggested.

 

So much bad and nonsensical advice...

Break lease literally means breaking the contract. The contract is to pay rent - they are breaking this.

There is no obligation for tenants to pay rent until the end of the lease period. The various tribunals have capped compensation periods that rent can be claimed for.

Additionally, the landlord has an obligation to mitigate their losses - so rejecting an applicant is a difficult thing to defend to a magistrate.

A section from a help page:

• Finally, RTA s 38 provides that any party to a tenancy agreement seeking compensation has a general duty to mitigate (reduce or avoid) their losses. According to this rule, a person cannot recover compensation for a loss which could have been reasonably avoided. This means that the landlord has to ensure that reasonable steps are taken to find and accept a new tenant. Failure to do so may mean that the landlord is barred from recovering compensationfor all or part of the loss from the tenant.

Examples to watch for are a landlord failing to advertise the premises quickly and effectively or; refusing reasonable applications.

***
The tenant in this case doesn't know their rights. The day of break lease they stop paying and then you can decide if you go to QCAT for compensation.

Landlords who think a tenant *must* keep paying rent after a break lease are deluded. You might like it, many try to scare tenants into it but no tenancy act stipulates anything of the sort.

 

Hence why the Tenant and Lessor enter into another binding contract "Agreement to Terminate Fixed Term Tenancy" which states

"The lessor and the tenant have a fixed term tenancy agreement (Tenancy). The Tenant has asked the Lessor to allow early termination of the Tenancy. In consideration of the Lessor's agreement to the early termination the Lessor and the Tenant agree that:... The tenant will pay rent and other charges in accordance with the Tenancy until a new Tenancy agreement for the premises starts or until expiration of the Tenancy, whichever is sooner...

...The existing Tenancy will terminate when a new Residential Tenancy Agreement with a replacement Tenant commences"

A binding contract separate to the Tenancy agreement...

Correct, the tenancy act doesn't, but as they have agreed to, signed and are now bound by another "contract" enforceable by a magistrate, they must continue to pay rent!

 

I'm sorry, but you're wrong.

There are specific maximum terms a magistrate will grant compensation for. Twenty-five weeks, for example, and that is rarely granted because the landlord must show they took steps to mitigate their losses (that means showing the house, advertising at competitive prices, all that).

Agents often insert whatever they want into leases. Things like professionally cleaning the carpet upon exit (not enforceable).

You can't go outside the act. The act overrides anything in the contract that contravenes the act. Magistrates show this every day when they rule some compensation is due but not that the tenant must continue paying rent until the agent finds a new tenant.

That outcome never happens... not once. It must be the most extreme circumstances for a magistrate to even rule they must pay 25 weeks rent...

 

This is consistent with my understanding, and with the legal advice I have received as the tenant breaking the lease. I have a VCAT appearance on 27 October so will then have first hand knowledge of the Victorian provisions.

 

What section of the Act details 25 weeks maximum?

 

Your extra "contract" is almost certainly void and not enforceable. I'm not sure what you're trying to do with it exactly - there's already laws that cover liability in situations of a break lease.

 

Under RTA Section 84 the landlord is entitled to compensation for:

• The loss of the rent that they would otherwise have received had the tenancy continued to the end of its fixed term; and
• The reasonable costs involved in reletting the premises (e.g. advertising, reimbursement of legitimate agent’s costs).

Note, however, that the landlord’s ability to recover compensation is limited in several ways.

First, the amount ACAT may award for loss of rent is limited to 25 weeks rent, or until the agreement was to end anyway, whichever is less.

 

What is ACAT? Do you mean QCAT?

Either way I'm not chasing 25 plus weeks rent... Simply 6-7 weeks!

 

Actually I've had legal advise to the contrary.. Especially being a standard Real Estate Institute of Queensland form/contract. The essence of the "contract" is an agreement between the parties to end the original tenancy agreement early, and in doing so there is clarification of the "consideration" (compensation) as dictated by the relevant Act in Qld. The form/contract is simply to ensure the tenant is aware of their obligations in this agreed break lease situation, nothing more, nothing less..

As per the RTA's own website..
"Under all other circumstances, if the tenant/resident or property manager/owner or provider end the agreement early (also known as a break lease) they may have to pay compensation and/or remaining rent until the end date in the agreement. A tenant/resident ending a tenancy agreement early may be asked to pay re-letting fees."

 

Proper legal advice from a legal practitioner experienced in tenancy matters? I find this hard to believe. Because I am one and I there's no way I'd advise a client to try and use a collateral contract to enforce break lease liabilities.

Your "contract" is not only redundant in a compensation sense, it also risks venturing into 'mutual agreement on termination' territory depending on the surrounding circumstances and how its worded.

My point exactly - you don't try and use contracts to notify people of their obligations - you're just creating more potential problems for yourself.

 

Yes however you have an obligation to mitigate your losses. That means acting promply to find new tenants, advertising property, having inspections and not turning down potential tenants without a very good reason.

The very first thing that will come up at QCAT is whether you acted to mitigate your losses.

The tenant has no obligation to continue paying rent.