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Forced to move? The property management slant on breaking a lease
As the saying goes: “Life is what happens while we are making other plans”. It’s not always by choice that a tenant has to break a lease. But a lease is a binding legal contract, and there are repercussions for tenants as well as landlords if that contract is not carried through to full term. Here are the ‘ins and outs’ from Baxton Property Management in Hobart.
When tenants sign a lease, they agree to pay rent in monthly increments for the full lease period. They do so in good faith, and the landlord accepts the lease document in the same spirit. This underlines the importance of tenants reading and understanding a lease before they sign it – and of agents or property managers ensuring that tenants are aware of exactly what is contained in the tenancy agreement.
There are legally acceptable reasons why the tenant may terminate a lease in Tasmania, such as:
- The landlord has breached a provision of the residential tenancy agreement
- The owner fails to repair a fault within 28 days of being notified by the tenant.
- A court order is issued by the Magistrate’s court if physical injury could result from continuing to stay in the premises.
The consequences of breaking a lease for tenants
While it is not always the case, the tenant may be held responsible for rent payment up to the end of the lease. It is advisable for tenants to give written notice well in advance, and to speak to their landlord, or agent to solve the situation amicably.
The landlord is responsible for finding a new tenant, but tenants can also assist in the process, if they know of a suitable candidate that could apply.
Those landlords who claim the tenant is not allowed to advertise for another tenant to take over the rented premises, should be aware that this could lead to disputes. However, if tenants do advertise, experienced property managers warn that advertising on social media is not effective. These applicants seldom get accepted.
Once the unit is rented out and paid for, the tenant is off the hook. Up until such time, the tenant is responsible for the rent until the fixed term agreement ends.
How a broken lease affects the landlord
If the owner was satisfied with the outgoing tenant, and considers the reason for the termination to be valid, the tenant can be asked to refer someone they know to take over their lease, as their friends will probably be of the same living standard and lifestyle.
Otherwise, the landlord is required to find a new tenant by advertising. The landlord does not have to accept the first person that comes along, and will still go through the same screening process usually followed. However, according to regulations, the owner may not be unreasonable in refusing applications.
The landlord or owner may deduct advertising fees, together with any outstanding rent (or rent that accumulates before a tenant is found) from the security bond paid when the tenant moved in.
No need to meet in court
To sue a tenant is costly, and could lead to counter claims and making the situation messy. A landlord should rather simply inform the tenant they are still responsible for rent until the end of the term. This might resolve the issue, as often the tenant will decide to stay, rather than end up having to pay for two places. There are ways to solve the problem to the benefit of both parties, if they are prepared to meet halfway, and stick to the original agreement.
Lease termination can become an unpleasant situation, but it needn’t get to that. For more information on lease termination and other tips for tenants and owners, visit Baxton Property Management on-line.
- Tenants in Australia: The importance of the tenancy agreement
- Hobart Property Management Company: 11 questions to ask before leasing
- Property Investors: Is self-managing for you?
We hope you enjoyed this article
The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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