VIC tenant give 14 day notice to vacate , breaking fix term lease

Hi all,

my tenant in Melbourne just give me 14 days notice to vacate due to financial hardship, we already gave him rent reduction for 3 months since april. Today we just got notified by my agent for the 14 days notice he will drop the key and vacate.

Our agent told us the tenant apply for no break lease fee through Consumer Affair, and said according to the new law he is entitled to it. Is that true?

Our agent ask us whether we want to challenge the tenant through VCAT and ask the tenant to paid the lease break fee, and the remaining loss of rent.

we got landlord insurance with CHUBB through Central CIty Insurance, but even the agent does not know if the insurance claim will get through under current covid situation... ( Can insurance reject our claim because of COVID financial hardship situation?


Any suggestion what we should do?

Thank you

 

@Lil Skater this one's for you

 

If the COVID situation allows your tenant to legally break the lease, insurance probably won’t cover you.

 

Lease break provisions are correct, if the tenant is facing severe hardship or will face it as a result of remaining at the property.

You’ll need to speak with your insurance provider, each one is different. Given it’s covered under the temporary measures it is not a breach of tenancy (unlike a normal break lease) which to me would indicate that it’s unlikely loss of rent will be covered.

Do you know where they’re going? Is it worth negotiating another rent reduction? Depending on the property vacancy rates are quite high and/or properties are taking some time to lease. It does depend on the area though, so speak with your PM to see what they recommend.

 

Hi @Lil Skater ,

Not sure where they going, but they basically try to get out because they know they can find cheaper lease and use the current monotarium law to avoid the break lease fee from what we can see.

We even already offer to discount 15% reduction of the initial rent again.

so are you saying landlord insurance is useless in current time situation?

What's the point of landlord having landlord insurance if its not covered in all situation??

Our landlord insurance covered for rent default, hardship cover and etc like the other landlord insurance.

Do you know anyone that facing similiar problem and got rejected by the insurance company?


our landlord insurance cover the following:
Loss of Rent, Rent Default & Legal Expenses
Loss of Rent up to $1,500 per week;
• Due to Loss or Damage to Contents up to 52 Weeks
• Due to Tenant Absconding up to 18 weeks
• Due to Rent Default up to 18 weeks
• Due to Eviction up to 28 weeks
• Due to Death of the Tenant up to 28 weeks
• Due to a Court Awarding the tenant release from Lease Obligations due
to Hardship up to 12 weeks

Thank you

 

Hi Marg,

do you know anyone that facing similiar problem that got rejected by the insurance company?
our landlord insurance cover the following:

Loss of Rent, Rent Default & Legal Expenses
Loss of Rent up to $1,500 per week;
• Due to Loss or Damage to Contents up to 52 Weeks
• Due to Tenant Absconding up to 18 weeks
• Due to Rent Default up to 18 weeks
• Due to Eviction up to 28 weeks
• Due to Death of the Tenant up to 28 weeks
• Due to a Court Awarding the tenant release from Lease Obligations due
to Hardship up to 12 weeks

 

Be kind. I would be thankful that the tenant has bitten the bullet on their circumstances and decided to break the lease. Consider the cost of them staying on for a few months and not paying anything until you can organise an eviction.

 

Getting out for something cheaper without hardship doesn’t fall under Covid legislation. That would be a normal lease break, but your PM should be able to advise better of the situation at hand.

Not saying it’s useless, I’m saying you need to contact them to find out whether it’s covered. Landlord insurance is just like every other insurance policy, they cannot cover absolutely everything.

I do not have a claim for a lease break in the current situation, so cannot advise. Again, it would come down to the individual policy though because you can’t compare cover with insurance company A and then directly with B as their underwriters would be different.

Your last point there sounds as though they may cover for hardship if VCAT orders a termination of the tenancy. But you’d need to clarify this directly.