Breaking Rental Lease Early: Additional Fee

CheapSticks on 11/11/2017 - 11:21
Last edited 11/11/2017 - 11:50

Hi

We are 8 months into a 12 months lease in NSW and need to break it for personal reasons.

Our lease has Additional Term of "Break Fee" - says if tenant ends the tenancy agreement after half the term of the lease has expired, 4 weeks rent is payable. It further says that any compensation payable by the tenant for ending the residential tenancy agreement before end of fixed term is limited to Break Fee. As a result, the other compensations of advertising fee, rent until new tenant is found etc is not applicable.

What is not clear to me whether there is a notice period that is also applicable. Or we can find the new place, clear our stuff, get the carpet steam cleaned and walk into agent's office and give notice of termination and 4 weeks rent and walk off.

Will be great to know if anyone knows the specifics.

Home & Garden

Comments

  • NuclearWessels on 11/11/2017 - 11:31
    +2

    Your notice to leave is two weeks minimum, so I imagine they would probably require that and then the 4 weeks. I'd call the real estate agent and ask.

    • CheapSticks on 11/11/2017 - 11:33

      do you know this for a fact as i cannot seem to find it in the lease agreement?

      • NuclearWessels on 11/11/2017 - 11:46
        +2

        No I don't that's why I'd suggest you call your agent and ask. If your contract doesn't mention any notice period but requires a Form 13 (Notice of intention to leave) then I think they could potentially argue minimum time frames apply (https://www.rta.qld.gov.au/Forms-and-publications/Forms/Form…). Just call and explain your situation and see what they say.

        • CheapSticks on 11/11/2017 - 11:50
          -1

          I have just amended that I am in NSW

  • sparkles on 11/11/2017 - 11:49
    -3

    Speak to your agent as they know the contents of your lease. Chances are they won't care. Tenants that break leases make them money, provided they can re-let the property quickly, they'll get commission on an additional months rent, plus charge the landlord another two weeks rent to place another tenant.

    I would say if you want to "walk" now you will probably have to pay out the normal notice period as detailed in your lease, plus the additional four weeks rent. Breaking a lease is never cheap. However, your agreement with the 6 month caveat seems quite generous all things considered.

  • dazweeja on 11/11/2017 - 11:50

    The costs will depend on what state you are in. For example, in Victoria:

    https://www.tuv.org.au/advice/breaking-your-lease/

    I would contact the tenants union in whatever state you are in for advice. But, as others have said, contact the agent first because the terms might be acceptable to you already.

  • o53djz7qTPY4der on 11/11/2017 - 11:53

    No notice required. You could leave today. Presuming you pay the 4 weeks less anything you've paid pro-rata.

    • CheapSticks on 11/11/2017 - 11:54

      thanks.
      May I know pls if you have been through process of breaking lease in NSW or are certain of this?

      • o53djz7qTPY4der on 11/11/2017 - 12:27
        +1

        Yeah, I broke my lease in NSW in April.

        I was told by my agent that no notice was required and I also had the same break lease fee as you.

        Fortunately, I was lucky, my LL let me leave and only charged two weeks fee rather than the six… A very kind gesture on their part.

        • o53djz7qTPY4der on 11/11/2017 - 12:28

          Just to add, even though the agent informed me no notice was required I did provide 10-12 days notice in the end - but this was not necessary..

        • CheapSticks on 11/11/2017 - 13:06

          @Xiongmao:

          That’s nice of your landlord - don’t think mine will do that. Presumably you had a situation which mandated the landlord to consider that.

        • o53djz7qTPY4der on 11/11/2017 - 13:15

          @CheapSticks: Not really.. I was resigned to paying the six weeks and the day before I paid the REA sent me the invoice and attached a note explaining they only wanted two weeks. They had someone to move in immediately but that wasn't anything to do with me. Just a kind LL and REA - in fact can't speak higher of them.

        • CheapSticks on 11/11/2017 - 13:28
          +1

          @Xiongmao:

          thats nice of them !

  • urahara on 11/11/2017 - 12:09
    -4

    Rent it at cheap or transfer the lease.
    Don't waste your time on any other thing. Thank me later.

    • Cheap Charlie on 11/11/2017 - 12:13

      Rent it at cheap

      It’s unlikely the agreement would allow subletting.
      The lease and the property would still be the original tenants concern.

  • shinichiduy on 11/11/2017 - 16:13
    -3

    A lease is a civil contract and as such, no penalty clause could be imposed. You are, however, responsible for losses and damages incurred to the landlord. This could be loss of rent, agent fee…, unless the contract stipulates otherwise. The landlord is under the obligation to mitigate their losses.

    In this case, you are subject to the break fee clause. If you leave now, the landlord will have to take reasonable steps to find new people in and will claim losses or damages from you. I reckon this losses and damages will be up to the maximum of 4 weeks rent only as stipulated in the contract.

    You can, alternatively, find new people to transfer your lease. The landlord cannot unreasonably refuse. If there is no gap on the rent, you will not be required to pay anything, provided that there are no other losses or damages to the landlord, regardless of the 4-week rent break fee clause. In this situation, if the landlord insists on you paying 4-week rent as per the clause, it is likely that the clause will be interpreted as a penalty, which is not allowed legally.

  • Ocker on 11/11/2017 - 16:30

    Save the break fee - keep the premises for the remainder of the lease and turn the place into a grow house!

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