NSW Tenants can now walk with only 1 weeks 'cost' 25% of lease left?

I agree that's the current situation - however NSW FairTrading on +61 2 9895 0111 told me when i called is that in the future you wont have 2 options.

As of 2019 you will only have the break fix fee and you cant choose "option 2" as the tenants entire obligation with only 25% of the lease left is 1 weeks rent.

Mitigation of losses is an option no longer allowed as of 2019.

As I said before......this is really really bad for Landlords, basically any Tenant can just walk in the last 13 weeks of a 1 year lease and we are going to be left holding the bag for the time it takes to secure a new tenant (eg 2-3 weeks), you wont be able to "plan" for a new tenant/lease because at any time a tenant can just walk on you.

 

I really don't understand how this is even legal eg basic contract law.

eg currently a tenant signs a contract that says....im going to rent from you for 52 weeks at $X dollars.

Instead now its.....im going to rent from you for 52 weeks......but if I change my mind anytime from week 39 to 52 I can tell you get stuffed....here's 7 days rent and get lost.

lol can you imagine the public outcry if landlords could say to tenants......uhm sorry you didn't vacuum before the last inspection or your hair is too pink.....here is a weeks rent I'd like you to leave today and good luck securing a new apartment.

 

Realistically, even if the tenant walks early and owes 4 weeks of rent- it's not a lot. One to two weeks covers the letting and advertising costs, then you only have a couple of weeks to replace them. In the vast majority of cases a tenant should be able to be secured within two weeks, but there's no guarantee, and this only gets worse towards the end of the lease.

 

Sure but when this happens "every year" its going to add significant overheads to the cost of renting.....these overheads must be passed on to the tenant in the form of higher rents because the landlord is taking on much more risks.

In every business transaction its always who is wearing risk that determines need to manage risks.

Now that basic contract law (eg commitment for 52 weeks) no longer exists in a tenant/landlord relationship.....the investor MUST recoup these risks to cover the 2 weeks each year they 'could' be out if the tenant does the dirty on them and leaves before the 52 weeks date.

 

Who are you trying to convince though? Because unfortunately, residential rental prices don't really move in line with costs to the landlord.

 

Of course they do.

Ive never understood why people continue to insist rental prices aren't "market driven" as LL's get in or in this case out of the market there are less properties available for rent.....prices go up.

Likewise as more LL's understand the new NSW rules and get shafted one or two times by tenants walking out on them leaving LL holding the bag on empty properties.....prices go up.

At the end of the property is just an investment like any other (yes even equities are a market.....demand goes up prices go up, yields go down). Its just that some people don't understand investing is a zero sum game.

 

What about recovering costs under "Tort" law?

 

Break lease stuff has nothing to do with tort law really.

Plus the issue here is that it looks like the proposals are mandatory in that they replace the usual common law rules on break leases.

 

The secretive business of the Law.

I guess this is why we have the separation of powers. The Courts need to determine if legislation is fair and equitable?

 

So now its almost 2019 wonder if we will actually hear from @GladysB this year seeing she never actually responded in all of 2018 about how landlords are going to be left high and dry from proposed changes to rental laws by tenants only needing to give 7 days notice.

Its amazing that politicians talk about "community consultation" but never bothered to actually discuss with affected parties in all of 2018 and refuse to return any form of community contact I made to her and her office.

 

I'm sure there already has been lots of community consultation to get to this point. Probably years worth.

It would have been mostly with larger organisations or other groups with specialist residential tenancy experience. Like I said earlier, what's the point of extensively consulting with people or parties that don't even have enough knowledge of how the current laws work?

 

Sigh.....still trying to get a rise out of me I see. Seems 2019 will be the same as 2018.

As I've said before I understood the current situation, I was trying to say that its not going to be the same in the future....you keep insisting you will still be able to strike the clause from future contracts.....when NSW Fair Trading are saying you wont be able to as its going to be mandatory once the legislation is introduced.

And yes I will keep contacting GladysB office as technically I don't have a "state rep" due to being a non resident though I've also been in contact with my "previous local member" but lets face it I've been living in NY for over a decade so don't expect them to take it on as a cause to pursue.

As for "industry consultation" no one here seemed to know about it or have mentioned it previous to my post so don't understand why you think they "have done enough". In addition only 1 out of my 4 PM's bothered to tell me about it so I imagine I'm not the only one caught by surprise.

 

I'm not just here to troll you - I'm trying to educate you and anyone else reading this thread a little.

I personally don't think its good enough to have just a general complain to your MP about this sort of thing. While you might think its helpful, or at the very least, doesn't hurt - but my view is that it lowers the credibility of all private landlords everywhere, however slightly.

I've seen the legal and policy discussions that go into the consultation and law reform work. They are sometimes at a very high level for technical legal issues, which is what I would characterise break lease liability as. The average PM would not be consulted directly - it would be the state REA organisation - or more likely, the lawyers assisting them.

I can already say from my experience in WA that the state fair trading people running our own consultations had a very dismissive view of private landlord submissions. Basically they didn't get any credible ones and they couldn't even find a representative body for landlords either. I believe in the end it was only REIWA and then tenancy groups that had any meaningful input.

So the TL;DR of it all is that if you want to sway tenancy law reforms, then its best to do it properly. Either educate or organise yourself and other landlords to do it better.

 

I'm not a lawyer but the word "notice" does not exist on the page linked earlier at all, so I can't see how it can be interpreted to suggest that notice periods are changing. Nor does it suggest these mandatory break fees are the "only" fees that are able to be charged, only that these fees are payable no matter what. I don't see how this prevents other clauses like advertising costs from being put into a lease, only that these aren't "mandatory" clauses and therefore may be subject to negotiation.

 

@thatbum There used to be a landlords group in WA, this was many years back though...maybe Landlords Advisory ? I see now there's also PROPERTY OWNERS ASSOCIATION OF WA

 

Does anyone know if the new "mandatory set fees for breaking a fixed-term lease early" have been implemented yet?

- New residential tenancy laws

I've been searching on their website and cant find any updates apart from the article in 2018. Does this mean they still haven't been implemented yet?

 

not yet. they are drafting the regulations which will take a few more months. Only the Domestic Violence laws came in at the end of February. I am dealing with one of those atm and seeking legal advice to understand exactly where landlords stand.

 

Thanks Chris I appreciate the heads up, im super curious does the domestic violence laws state that because the remaining tenant only needs to give 2 weeks notice

Rights of remaining co-tenants
After a tenant gives a domestic violence termination notice, a co-tenant who remains in the tenancy:

• may apply to the Tribunal to end their tenancy
• is entitled to a 2-week period to only pay a portion of the rent and is not required to cover the departing victim’s share. This only applies if the remaining co-tenant is not the perpetrator of domestic violence.

listed on - Tenancy laws for victims of domestic violence have started

That if the landlord finds they hook up again and move into a new apartment.....that the landlord can sue for the difference between 2 weeks notice and the actual rent lost?

I know we all hope these new laws aren't abused and that they aren't "bad" per say. But it seems landlords are the ones going to get screwed over and bare the costs.....cause they are rich.


Please post here in the very near future once you find out the outcomes.

 

@Dean Collins I will let you know. Two things are for sure... 1. there is nothing good out of a situation like this for the landlord (best outcome is a small loss as opposed to a really big loss), and 2. When the perpetrator is a co-tenant, it is going to be VERY sticky indeed and I am sure the interpretation of the Act will be tested in Tribunals in coming months (just hope I am not the one testing them ).

My situation is a single occupancy tenant who told us to be the victim of DM and is awaiting for the AVO application to come through (no AVO produced yet). Our starting position is to assume this is a real issue they are dealing with, so we are doing all we can to help her whilst having to minimise loss for our landlord who is now losing money every day.

I've received one advice which said that because the perpetrator is not a co-tenant, the claim of DM legislation does not apply - which is not my interpretation based of what I've read. I am now waiting for a second legal opinion - hopefully tomorrow. If you have specific questions, please PM me because, as it is a police matter, I am worried with putting more details on a public forum.

 

@ChrisDim Let me know if you want me to give a pro bono opinion on it.

Somewhat unusually, I practise in both residential tenancy law and DV law.