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Tenant looking for some advice

Discussion in 'Property Management' started by Emma Andrews, 21st Jul, 2015.

  1. Emma Andrews

    Emma Andrews Member

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    I've recently broke my lease (4 months left of a 12 month lease) here in Perth. Since signing the lease back in November the market has declined. We are paying $440 a week and the unit has now been on the market at $420 a week for over a month. We are willing to pay the difference until our contract ends in November but the landlord isn't willing to lower any more then though we believe the market value is more towards $380 a week. There is another unit in our complex pretty much identical to ours that is on the market for $385 and still no takers.I don't believe the landlord is taking adequate steps to mitigate our loss. Shall I stop paying rent when I vacate otherwise the landlord could keep the price as is and the unit will be empty until November.
     
  2. Emoi

    Emoi Well-Known Member

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    What part of legally binding contract did you not understand?

    And you don't seem to care about theirs.
     
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  3. wylie

    wylie Moderator Staff Member

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    Regardless of the fact you broke your lease, if they are advertising at $420 with no takers and you believe it should rent at $380, why not ask them to advertise at $380 and you offer to pay the difference, ie. twelve weeks @ $40 per week. That comes to $640 but is much better than you paying $440 or $420 per week until they find a tenant. What if they don't rent it?

    We had this happen recently. We didn't penalise our tenants at all. Agent we placed it with to find us a tenant said it was worth $560 but the market was so flat she suggested we try lower. We got down to $500 before snagging a tenant.

    Other nearby houses were dropping the asking rent week by week and offering a week's rent for free. Things were bad.

    I would never have slept at night had we asked these tenants too pay us while it was empty. Legally we had a right, but morally I wouldn't do it.
     
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  4. Emoi

    Emoi Well-Known Member

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    Did the bank care when you told them that was the reason for missing repayments?
     
  5. Emma Andrews

    Emma Andrews Member

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    I understand the contract fully but due to family issues which I'm not willing to go into here we have to return home (interstate) I do care about their losses which is why we are willing to pay the difference..
     
  6. skater

    skater Capitalist Premium Member

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    You signed a legally binding contract to pay $440 per week for 12 months. What the market is doing now is irrelevant. You wouldn't be complaining if the market had risen to, say, $500pw, would you?

    It is not the landlords responsibility to mitigate YOUR loss. It is your responsibility to mitigate THEIRS. So....if you do stop paying, for whatever reason, they have the right to take you to tribunal and MAKE you pay, but all the costs of doing that will be added onto your bill, so be a good girl and just pay up. That way you can mitigate your own loss.

    Otherwise, they advertise at the current market rent, and you pay the difference. This could save you some $$. The point here is though, that the Landlord is entitled to the full $440pw for the length of the current lease.
     
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  7. Emma Andrews

    Emma Andrews Member

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    Thanks Wylie.

    We would pay the difference no issues but the landlord wants to put someone on a 12 month lease so what would happen when our contract ends? They turned down a tenant last week who offered $390 saying it was too low - The landlord obviously believe it's worth more but the number of properties on the market/and the prices wanted tells a different story.
     
  8. wylie

    wylie Moderator Staff Member

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    We didn't miss any payments. We are lucky that we can absorb this. Early days we couldn't afford it but we would have dropped the rent then too to get someone in at less than we want, rather than continue to advertise it at a price no longer achievable.

    I'm sure the poster knows they had a contract, and I believe they should ask the rent to be lowered and they meet the difference. It will be far cheaper than copping four months @ $420 per week if that is just too high.

    As a landlord I would jump at this offer. I get full rent and don't lose. Tenant gets a replacement tenant at a lower rent and only tops it up. Win/win.
     
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  9. skater

    skater Capitalist Premium Member

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    Maybe the landlord knows the market better than you. There are a lot of landlords that time their leases for when they know there are more people looking to lease in an area (ie beginning of the year), because they know they will get a higher rental by doing this. If this is the case, then no, they most likely won't accept a lower price.
     
  10. wylie

    wylie Moderator Staff Member

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    I would ask that this tenant be followed up and if they can take it at $390 then that could work.

    If you send a PM to thatbum, he is an expert in this area in WA and is a solicitor and knows the ropes. I don't think they can expect you to cover past your lease, and if they want a 12 month lease they cannot expect you to suffer when you are prepared to cover the lost for the remaining four months. I don't know, but I believe you would have a case of saying that you would have been prepared to pay the balance from $390 to $420 for the four months and then stop paying.

    Ask thatbum?
     
  11. thatbum

    thatbum Well-Known Member

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    Have you moved out yet or not? It wasn't clear from your post.

    Just my broad preliminary view, the likely procedure will probably be:

    1. Gather sufficient evidence of the current market rate for your rental (seems done or at least partially done)

    2. Ask the landlord to advertise at that market rent once you have moved out (if not already), with the promise that you intend to pay the difference in rent until the expiry of your lease

    3. If the landlord refuses to do this, basically stop paying rent once you leave the property.

    4. Wait and see what happens at that point, but I would be surprised if the landlord did not lower the asking rent to the market level

    5. Assess your liability once the landlord's loss has crystalised, and an analysis on whether the landlord took reasonable steps to mitigate that loss.

    However, you will need legal advice on this situation as soon as possible, and probably also to help you assess your liability at the end.

    In WA you can call the state tenancy phone advice service at Tenancy WA, or contact a local tenant advocate for your area - most of them being in your local community legal centre.
     
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  12. thatbum

    thatbum Well-Known Member

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    Just FYI, this mitigation of loss concept gets misquoted way too much.

    In a break lease situation, it is a defence against a landlord's claim for damages, to assert that the landlord (being the claimant) did not take reasonable steps to mitigate the landlord's own loss.

    So to clarify, its the landlord's own loss that they are mitigating.
     
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  13. fullylucky

    fullylucky Well-Known Member

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    You broke lease. should expect penalties. you think the property is overpriced.

    Wouldn't other tenants think it's over priced too? Then the landlord wouldn't be able to rent it out.

    If you pad the difference it's the same as if your new place increased their rent.

    Should have spoken to landlord (communication is always good).and ask nicely for the landlord to find new tenants once found you then move out and the new people take over the lease.

    It's easy to find a place in short notice but difficult for landlords to secure tenants. Landlords prefer long period of early notification so they have adequate time to try to 1. rent for high prices, 2. find good tenants. 3. find tenants that can connect and keep renting with minimum gap (period when it's not rented out) in between.
     
  14. thatbum

    thatbum Well-Known Member

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    I think that's what the OP is wanting to do. The issue is at what price the property should be advertised at.
     
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  15. Perp

    Perp Well-Known Member

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    It's a pity several people jumped in and harshed all over @Emma Andrews, rather than reading what she actually said carefully. She had the law exactly right, as confirmed by thatbum. She is willing to pay the difference, as she said up front - the issue is that the landlord's not willing to lower the rent despite Emma's stated willingness to cover the difference.

    Also, if the landlord's asking for a 12-month lease, rather than the balance of your lease, I believe that would also be a strong defence to damages, but I defer to @thatbum on that point.
     
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  16. Marg4000

    Marg4000 Well-Known Member

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    If you feel the landlord is not making sufficient efforts to re-let the property (despite your offering to pay the difference) then you can apply to the tribunal to vary the conditions of the break-lease terms. You will have to produce copies of emails etc to support your claim.
    Marg
     
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  17. Tonibell

    Tonibell Well-Known Member

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    Is it possible for the tenant to sub-let the place for the 4 months to mitigate the loss ?
     
  18. WestOz

    WestOz Well-Known Member

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    +1 @Perp and well done @wylie for the helpful response (incl thatbum), I've never witnessed members of this forum treat another in such a way, disappointing, thought it was a more mature group than what's witnessed elsewhere.

    @Emma Andrews, I commend your efforts/research to do the right and honest thing, even creating an account here to ask for assistance, which you possibly now regret, thankfully wylie & thatbum helped you out.
    Some tenants wouldn't care less and simply pack all there gear and take off.

    Good luck & I wish you well with whatever has presented this situation.
     
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  19. jaybean

    jaybean Well-Known Member

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    I'm interested to hear what the rules are too. I can see how both sides have a case.
     
  20. rhinsor

    rhinsor Well-Known Member

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    If the landlord accepted the lower rent and the OP paid the difference, would they have to pay the difference in one payment or per week?