Renting and defaulting

[Odendaal]

Hi all

 

So let me just say that this is not something we want to do and we know it's not ideal (it's inconvenient for the owners and it may give us a bad reference) BUT we have to move out of our apartment due to logistical reasons that I am sure any new migrant understands. We intend on doing this honestly and will only vacate once a new tenant is found however:

 

So our lease expires 15 April 2017.

 

This is what the contract says regarding defaulting:

 

Clause 27. Changes in occupation of the premises

                    27.1 If during the term of the tenancy the people in occupation of the premises change, the tenant must as soon as practicable

                             notify the landlord or the agent in writing and comply with clause 10.

                    27.2 If the tenant assigns the tenancy or sub-lets, contrary to clause 10, or if the tenant abandons the premises or cancels the

                            tenancy, the tenant may be required to reimburse the landlord ’s reletting expenses including -

                           27.2.1 a pro-rata letting fee;

                           27.2.2 advertising or marketing expenses incurred;

                           27.2.3 rental data base checks on applicants;

                    27.2.4 rent on the premises until such time as the lease is assigned or cancelled or the expiry of the tenancy, whichever first

                              occurs.

                    27.3 The tenant’s obligation to pay the landlord’s reletting expenses is dependent upon the landlord taking reasonable steps to

                             mitigate any loss arising from the tenant’s default.

 

Clause 10 says:

Assignment or sub-letting

(a) The TENANT must not assign or sub-let the whole or any part of the premises without the written consent of the

LANDLORD. The LANDLORD’s consent must not be unreasonably withheld.

(b) The LANDLORD must not demand or receive any fee or payment for the consent, except in respect of any fees, costs or

charges incurred by the landlord in relation to the preparation of a written assignment of the agreement.

 

I was hoping that someone with more experience (than me) can decipher this so that I can understand what is expected of us and what the implications of this are. 

 

Has anyone defaulted before and how did it go?

 

Thanks guys!

 

Mel and Leon

[Mara]

I cannot decipher legal speak, as I am not a lawyer, however, my past experience, in assisting others, was as follows:

 

1. You go to your agents and advise them that you would like to move out.

2. Hopefully you are prepared to stay, until such time as other tenants are found.

3. Hopefully you are happy to allow them to show the flat, to those keen to rent it.

4. If they then find somebody, they will then usually let you off the hook and allow you to leave, in good standing.

5. If all else fails, you would be liable for the rent until the end of your lease.

 

Hope this helps.

[Odendaal]

Thanks Mara

 

1. You go to your agents and advise them that you would like to move out.

      So should I let the agent know as soon as possible what our intentions are even though we are not sure when we will leave?

2. Hopefully you are prepared to stay, until such time as other tenants are found.

      Yes, more than happy

3. Hopefully you are happy to allow them to show the flat, to those keen to rent it.

      Yup, makes sense!

4. If they then find somebody, they will then usually let you off the hook and allow you to leave, in good standing.

       Oh this is what I am hoping for!

5. If all else fails, you would be liable for the rent until the end of your lease.

       This is not ideal haha. 

 

The place is brand new and there was a lot of competition to get in so I don't think that they would struggle to find someone.

 

 

 

[AlanRB]

Hi Mel and Leon,

 

Which state are you in and what is the reason for leaving?  This is important for me to know to give you some input.  If you would prefer discussing in private please feel free to PM me.

 

Important information for those following this thread.  

You definitely only want to terminate a lease early with the full consent of the landlord (whatever the reason) or by applying for an early termination at a tribunal on the grounds of hardship etc.  If you do not the landlord can add your name to the tenancy database known as TICA and you will have problems finding someone to lease a property to you for at least seven (7) years.  Be warned.

 

Cheers

Alan

Edited December 9, 2016 by AlanRB

[AFreshStart]

@Odendaal

 

I can only share my own personal experience. On arrival in Aus we took a 16-month lease on a property, 6-months in we realized that it was too expensive and we had to move on.

 

We had had dealings with the landlord in the past so wrote to her and explained our situation, it wasn't ideal and of course she wasn't all that happy, but understood our predicament. I assured her we would work with the letting agents in whatever way we could to support them in procuring new tenants. In terms of the lease we had similar terms attached, including a "break lease" clause which had an additional penalty associated with it.

 

We gave a months notice and I worked with the agents in arranging the open days, working around their schedules and also staged and styled the property to look its best (I'm an interior designer by trade) and photographed it for the agents, my photos were FAR better than the ones we had to go on in leasing it and it drew in much interest, we had 2 open days and it was leased.

 

In the end because I staged, styled and photographed it for them there were no advertising costs, but we still had to pay the agreed upon break lease, but we got our deposit back and moved on and all walked away happy with the resolution.

 

Hope that helps!

 

Matt

[ottg]

Sorry no good news

Don't say anything till you are sure about your own plans, otherwise it may just upset the applecart.

If you break lease you are responsible for all expenses till a new tenant is found (including advertising fees/letting fees). The landlord carries no costs, that is why there is a contract.

The sooner you give notice the sooner the letting agent can advertise - however, it may not tie in with your own departure dates

You can also do own advertising - with approval from the letting agent

Getting new tenants may take 1 day, 10 days 40 days - it depends on the demand in the market so be prepared to pay while empty

  

[bbop]

What you would like to do is break lease. You will be responsible for advertising cost and the unexpired portion of the letting fee if it is your first term lease  with that particular owner (max 2 weeks rent) . That you can only determine once the new tenant has signed the new lease  and a start date is agreed on. You will still be responsibile for the rent and upkeep of the property as if you were staying there in anyway until either a new tenant is found or your lease expires, which ever comes first. If there is a difference in rent price i.e you paid $450p/w and the new tenant makes an offer of $430p/w, your consent is required before the owner can accept the new lease, as you will be responsible to pay the rent difference of $20p/w up to the end of your lease as part of your break lease expenses.

 

Assigning your lease is when someone else takes over the remainder of your lease, with the owners consent. Sub-letting is when someone else stays in the dwelling and pays you for instance for a room and is not listed as an additional occupant on the lease, but you still pay the owner your normal rent. Owners permission required. An owner or agency cannot turn down a break lease request only an assignment of lease, but your agency may keep you on file as someone who breaks lease, potentially hindering future applications, but they may also do nothing especially if you were a good tenant to start off with. Break leases are never advised as they can be expensive, but sometimes ones circumstances changes and you have no choice.

 

Once a new tenant is secured your final bond inspection will take place as if your lease expired and you will get your bond back minus any deductions you may have incurred during the tenancy that has not been paid yet. Bond money cannot intentionally be left to pay outstanding debt, there is a $5,000 penalty if found guilty for what ever reason. Best discuss deductions upfront with your agent, if any. You can no longer be lodged on any database including TICA or NTD without a court order. All of the above applies to WA, it may differ between States/Territories. 

[rozellem]

We broke a year lease at 9 months, when we bought our place. I actually emailed the agent before buying to ask about the procedure. After buying I informed them, we set a date of departure and we had to pay for advertising and some admin. It came to $800. Because we are in a popular family area in Sydney, it rented immediately, so we luckily did not have to pay rent on it too. 

[Mara]

@Odendaal, I think you have had some wonderful input above, and many of them seem to know a lot more than what I do... I guess the best would be for you to make up your minds on what you would like to do and what is best in regards to timing for you, and then go and have a chat to your agent.