Tenants Breaking Lease

Hi all

I have tenants who signed a 12 month fixed lease. Theyre about halfway through given lease and have just bought a property so looking to break the lease half way through.

What are thei rights and my rights? I feel i had a contract in place for 12 months.

They will have given me 30 days notice. But can any tenant just give 30 days notice and break the lease or does it have to be agreed by both parties?

I know you might say what the lease forms say. I iust use the commerce of wa forms. Rent Agreement 1AA forms

Thanks any help would be great.

I basically want to know if theyre allowed to just give 30 days to break a lease ect

 

Not familiar with WA tenancy agreement however you'll need to look at the break-lease clause, whether it applies or not, the costs it nominates eg 4 weeks notice plus break fee or If the break clause doesn't apply, the tenant pays all costs for reletting the property ie agent fees, advertising and lease preparation costs.

@thatbum

 

Hi,

Sounds like you are self managing and in WA... the DMIRS website and phone line is your best friend! (the old Dept of Commerce).
Quick search being the weekend found this Tenant ending a tenancy

I am currently sorting 4th break lease on the same property! ( no problems with tenants or property - just the age group I rent to...travel, family changes, purchase properties etc).

While I cant give you proper tenancy advice,... our tenants have also given us over 30 days notice however are aware, that they are responsible for the payment of the lease until the end of the fixed term agreement. However, they are also aware that I will do everything I can to get new tenants in asap, and work on a good outcome for all parties.

Break lease is hugely inconvenient but the way I look at it, their circumstances have changed, if I get upset it isn't going to change the outcome at all. The break lease actually takes the pressure off us financially in the period searching for new tenants up until end of current lease date. Also outgoing tenants have more incentive to nicely present the property for inspections...silver linings and all that jazz

I would recommend calling DMIRS on Monday just to make sure you know of your rights (and the tenants)

 

Yeh self managed

Weird 30 days notice but still have to pay out the remaining lease unless Tenants are found to take over

 

This is one of those fantasies that real estate agents wish was true, openly lie about and still write in leases despite it being outside any tenancy act in any state.

Break lease literally means the lease is broken. The tenants do not have to pay more rent.

They may end up liable for some costs like a pro-rata leasing fee but paying rent until a new tenant is found? Nope.

 

Doesn't this conflict with:
Tenant ending a tenancy
Tenant wants to end a tenancy

• You can end a periodic tenancy agreement without having to provide a reason, but tenants must give the lessor a minimum 21 days' notice in writing.
• Should the premises be destroyed, compulsorily acquired by law, or become uninhabitable (this applies to both periodic and fixed-term tenancies) and the tenant/s want to end the agreement, the period of notice is not less than two days.
• The tenant/s can also seek an order from the Magistrates Court to end a fixed-term agreement if the lessor has not kept to any one of the terms of your tenancy agreement and refuses to fix the problem.
• A fixed-term agreement can also end by mutual agreement signed by the tenant/s and the lessor.

Apart from the above situations, the tenant/s are committed to a fixed-term tenancy agreement for the period written in the contract. Having said this, a tenancy doesn’t automatically end when the fixed-term tenancy agreement does unless you have given (or been given) 30 days’ notice.

Breaking a fixed-term agreement without first obtaining the written agreement of the lessor can be costly. The tenant/s might have to pay rent and maintenance expenses on the property until the lessor finds a new tenant or the original tenancy period expires. The tenant/s may also be asked to pay other reasonable costs incurred by the lessor as a result of the tenant/s ending the tenancy agreement early.

If the tenant/s need to end the agreement early, they should try to give as much notice as possible so the lessor can take all reasonable steps to find a replacement tenant as soon as possible.


As a lessor - I definitely take all reasonable steps, do things at our own expense and quite often far more proactive and concerned than the outgoing tenants (again...age group tenanting to are very "fast and loose" and focussing on their next shiny thing).
Again, for situations like this, having built a good relationship with tenants comes into its own and makes the whole process easier and calmer for us all. However, end of day - a contract has been signed.
@emza , please let me know if you have different information? While I know state by state things vary but would really appreciate your input if I am missing crucial information and not complying in any way.

 

So whats the point in having a contract?

Someone can sign a 12 month lease but then walk out after a month and have no obligation to pay anything? bar the bond being taken

 

Perhaps in other states but not in WA.
They can choose not to follow their obligations about paying it and then you would have to chase through courts etc but they are liable for the full amount of rent until a new tenant is found in WA.
The property needs to be advertised at the same current rent as the lease and if no tenant can be found at that price then permission needs to be given from the ex tenant to reduce it as they are also liable for the difference between the new rent and old rent. For example if current rent was $300 pw and after 3 weeks of advertising no tenant could be found the owner and current tenant need to agree on new rate which might be $280pw. The breaklease tenant is then liable for a lump sum of $20 x the remaining weeks left.

 

As you are self managing, you MUST understand the all leglislation applicable to rentals in your state.

Sounds as if you are in for a bit of reading. Make sure you fully understand your rights and obligations. There are penalties that can be applied if you get it wrong.
Marg

 

Most recurring contracts have a clause on how to end them. Expecting tenants to lease for the full term is unwise. You have 30 days to find another tenant which should be more than enough.

 

It would be good if i can pointed in the right direction as to what to read?

 

All the rights for tenants and landlords are on the Commerce WA website. If you want to be successful as a self managed landlord then you need to know these back to front. Knowing your rights and your tenants rights will put you in good stead. Otherwise you should go get a PM.

Renting a home

 

If there was no penalty or responsibility at all for one party, then it cant be a contract.....

So you have something wrong, and fair contract means both parties have responsibilities, it must be reasonable.

Maybe you are saying you cannot force them to payout the remaining part, which is true, but they must be responsible for a period until a suitable tenant is found, unless you have some weird laws made up by a despot over there ?

 

+1 for the link Westminster has provided. This is the same place I linked to in my first reply (if you open that link - it is the page specific to ending a lease). That is the place for the right direction - they are the policy controllers for WA. This is also the same place you got the 1AA form and their details should be on the bottom of that.

You can sign up to their email alerts that will let you know what is happening in the industry. They also have an information line that you can call.

+1 for Marg4000 and Westminster's suggestion to read up. A few years ago things changed. What use to be "best practice" is now law in WA. Even if you do have a property manager at any stage, knowing your rights and the tenants rights puts you in a good position.

All the best in finding new tenants - hoping it is a nice, neat and quick turn around for you.

 

The short answer is yes, they are allowed to. But you as the lessor would also be entitled to claim any reasonable losses arising from the "break lease". Which usually includes things like the rent that would have been paid until you are able to find a replacement tenant.

You should generally just be treating the vacating of the tenant as you normally would, but then claim any losses from them after you have found a new tenant and are able to fully calculate the total losses.

Let me know if there was anything else you needed to know.

 

Thanks

Have since spoken to a property manager who has outlined the rights of lessor and tenant.

Thanks to all

 

Wrong

Wrong

Absolutely pay pro rata of letting and advertising costs, calculated slightly differently in each state. Also rent til new tenant begins.

 

ha, lol, it's so funny what agents think.

Perhaps you can find some VCAT or QCAT etc cases that are published online that show the Magistrate ordering the tenant to pay the rent until the landlord found a new tenant?

The actual law is compensation may be owed and at the same time the agent/landlord have an obligation to minimise costs.

So, they take a week to list the property online again... nope, the magistrate won't put up with that ****. That's not taking steps to minimise costs.

If they list for the same price knowing prices have dropped. Nope, won't get by VCAT etc either.

If they list for price X and then drop to price Y in a month... that's just proof they weren't trying to minimise cost.

This is the actual reality. Magistrates will award some costs, but only reasonable costs. If a tenant breaks a lease and that property is vacant for eight weeks before being leased, the magistrate is going to have a lot of questions about that. Why wasn't the price reduced? What advertising was done? How many visits and opens were there?

You need to check the actual cases at VCAT and other tribunals. Tenants do not pay rent until a new tenant is found.

 

From Tenants Union Victoria

Breaking a lease on the grounds of hardship or by giving up possession can be costly. The landlord can claim compensation for any reasonable costs they have to pay as a result of you breaking the lease.

The costs you could be liable for include:

• a reletting fee (usually one or two weeks’ rent). This must be based on the fee that the agent charged the landlord so it is a good idea to ask for a copy of the invoice
• reasonable advertising costs
• rent until new tenants move in or until the end of the fixed term (whichever happens first)

You should only pay rent up until the day that you vacate. Once the new tenants move in, you can then pay the landlord compensation for any lost rent.

Breaking a lease - Tenants Victoria