Co-Tenant Trying to Leave Lease Early

Lamygdala on 18/08/2020 - 15:37
Last edited 18/08/2020 - 15:39

Hi guys, long-term lurker, first time poster here!

TLDR: Is a co-tenant allowed to just leave and opt of paying rent even if he's on the lease and hasn't found a replacement by paying a 4 week "break fee"?

I currently live in a share-house in Sydney where a co-tenant is trying to leave the lease early as he has signed a lease to live with his friends. Granted, he has tried hard to find someone to replace him for the past month however he can't find anyone to live in the house as our rent is quite high relative to the current economy because we haven't been able to get a rent reduction (the household hasn't lost more than 50% of our income so we haven't been able to secure this from the real estate agent/landlord). The real estate agent has said they won't reduce rent and has basically said we are on our own.

He's now said he'll pay 4 weeks of rent upfront as a break fee and won't do anything to help beyond this as he can't afford to pay rent for both places. We've said he can't do this as he is still on the lease and hasn't found a replacement however he's said as a co-tenant, he shares the responsibility to pay the rent with the other co-tenants and his decision to not pay rent just means us (the other co-tenants) have to step up and cover his share if we can't find someone beyond that.

Home & Garden

Comments

  • soan papdi on 18/08/2020 - 15:44

    You look to be in NSW. Does this page help? https://www.tenants.org.au/factsheet-15-share-housing

    Also what's in the contract that they signed regarding lease break?

    • amygdala on 18/08/2020 - 15:51

      Thanks for sending the link, we've had a look at before and it wasn't very helpful unfortunately. From the sounds of it, they're obliged to pay for rent until the end of the lease but it doesn't seem definitive either way.

      The contract has a Break Fee clause that states that if the lease is broken "the tenant" much pay 4 weeks rent upfront as a fee however it doesn't specify what will happen if one co-tenant leaves. None of the other housemates want to leave so we wouldn't be looking to break the lease.

    • dizzle on 18/08/2020 - 16:06

      Unfortunately that fact sheet seems to say what happens if co-tenants want to boot someone out, or if the co-tenant wants to leave under a periodic release (21 days notice) not on the fixed lease.

  • whooah1979 on 18/08/2020 - 15:51
    +2

    You guys have three options. Find a new tenant before they leave, all of you break the lease so that everyone have pay or split the rent with the tenants that are staying and sue the one that is leaving for their share.

    • amygdala on 18/08/2020 - 15:53

      A bit of a vague question but do you happen to know how expensive/timeconsuming it would be if we chose to sue? Don't want to go down this route if possible but it looks like it might end up like this :/

      • DemocracyManifest on 18/08/2020 - 15:55

        You would have to take them to a tribunal and after all that wasted time they would only have to pay the share of their cost as they have already offered you, plus they have already moved

      • DemocracyManifest on 18/08/2020 - 16:04
        +1

        Costs in rentals re breaking leases etc are more of a scare tactic, TrIbunals often end in no penalty lease breakages etc. Lots of REs try to pass on all sorts of bullshit fees

      • ozbjunkie on 20/08/2020 - 03:37

        I would think small claims court might be better than going to a rental tribunal. (Edit, others below seem to indicate that state CAT is more appropriate than small claims court).

        Person co-signed lease, failed to pay their share of the rent.

        The fact they moved their stuff out is not relevant to their signing the lease which is an agreement to pay XX dollars for XX timeframe, with no conditions like "unless I decide to move my stuff into my mates place and sign another lease with them".

        Even threatening/explaining this to them might help them rededicate their efforts to find a new tenant, or to agree in writing to pay their part of the rent until a new tenant is found.

    • DemocracyManifest on 18/08/2020 - 15:53

      Why would you sue, this is ozbargain. Just find another tenant and split the cost till then

      • dizzle on 18/08/2020 - 16:52
        +3

        The trouble is they've tried finding a new tenant, and in a time when there are more vacancies at low rents, people aren't wanting to pay higher rents to take over the tenancy.

    • Typical16-bitEnjoyer on 18/08/2020 - 16:06
      +2

      Spot on whooah1979.

      OP, you can use this as a negotiating tactic. Tell the LL/Agent you're all considering leaving for a cheaper place unless they agree to cheaper rent on a new Lease.

      • amygdala on 18/08/2020 - 17:39

        We’ve tried this and they basically said go ahead and told us that we would have to pay the break fee. So it wasn’t very successful to say the least

        • Whisper Quiet on 19/08/2020 - 08:42

          Did you pay separately for the bond? if you didn't keep his share too

        • kiitos on 19/08/2020 - 08:43
          +1

          Are you really really keen to stay there? Can the remaining tenants cover the rent comfortably? If not, sounds like being the lease and moving on would be best, as others have said, you may be able to pick up a cheaper/better place. Inconvenient, sure.

  • DemocracyManifest on 18/08/2020 - 15:52

    Take his 4 weeks rent paid upfront and look for a housemates yourselves, the majority want to stay. You can sign people on and off the lease with the real estate, that is possible - but with the next person maybe just don’t get them to sign on and leave it as it is. If it’s too expensive start looking for another place with the housemates you like. You can’t force someone to stay at the premises

    • amygdala on 18/08/2020 - 15:54

      The issue is that he's already been searching for a month and hasn't found anyone who is happy to stay as our rent is high relative to what's on the market in the same area as we haven't been able to get a rent reduction. So we're worried we won't be able to fill the room after he's left.

      • DemocracyManifest on 18/08/2020 - 15:57
        -2

        Put it on Airbnb as a short term room and let that soak up some of the cost? You’ve already answered your own question, perhaps you will have to make the rent of that particular room cheaper to make it more attractive to a tenant and increase the cost of the other rooms a fraction

      • thatonethere on 18/08/2020 - 15:59
        +7

        You may have to discount the rate for the replacement housemate. Give them the worst room.

        At least wont be 100% paying for the missing rent

  • djoz on 18/08/2020 - 15:56
    +1

    How has he arrived at the '4 weeks rent' break fee? Is it mentioned in your contract / Lease agreement?

    • amygdala on 18/08/2020 - 17:42
      +1

      Its not not on the contract for a single co-tenant leaving, but there is a break clause if everyone wants to break the lease. He seems to have interpreted that as his solution of getting out of his part of the lease.

  • DemocracyManifest on 18/08/2020 - 15:59
    +2

    The other you can do is, request a new lease as a tenant has left, and then bargain the price down a bit especially if rents have dropped - are you good tenants?

  • markathome on 18/08/2020 - 16:02
    +1

    Send the situation back to the landlord and ask again for a rent reduction.

  • dizzle on 18/08/2020 - 16:06
    +2

    he's said as a co-tenant, he shares the responsibility to pay the rent with the other co-tenants and his decision to not pay rent just means us (the other co-tenants) have to step up and cover his share if we can't find someone beyond that.

    My understanding means the opposite - That even if he leaves early he still shares responsibility for the rent/bills until you have the change of lease approved.

    Also consider that you may need approval from the real estate to transfer the co-lease to someone else, so it may not be as smooth as someone else moving in.
    And is he expecting you guys to reimburse him for the bond?

    • DemocracyManifest on 18/08/2020 - 16:09

      It’s going to fall on the other tenants to sort it, the RE won’t give a shit, they will just want their money and if they fall behind they will be in breach of their lease and will get threats of termination. Transferring the lease is normally not a hassle especially with smaller real estates

      • dizzle on 18/08/2020 - 18:18

        Understood, but what I'm trying to say is he can't use that as his excuse when it's the other way around. If this causes everyone to break the lease, it's on him just as much as them.

  • lunchbox99 on 18/08/2020 - 16:30
    +3

    Your flatmate is responsible. The fact they signed two overlapping leases just means they are responsible for paying in two places.

    The only option you have is taking them to NCAT/VCAT/QCAT for the loss. Filing is pretty cheap and doesn't require legal representation. Depends how much money you will be out of pocket.

    NCAT fees:
    https://www.ncat.nsw.gov.au/Pages/apply_to_ncat/fees_and_cha…

    Residential proceedings
    Includes matters about tenancy, social housing, residential communities, retirement villages and boarding houses.

    $52 standard, $13 reduced fee (not sure who qualifies).

  • netjock on 18/08/2020 - 17:04
    +1

    How much longer is your lease?

    Lets assume you have 6 of 12 months to go. They pay you 4 weeks. Try to use the 4 weeks to reduce the overall rent for next 6 months to attract a new co tenant, cut your losses and move on.

    • amygdala on 18/08/2020 - 17:43

      Its for another 6 months, but your idea of using it to discount rent is a great idea. Thanks for the suggestion!

  • Seraphin7 on 18/08/2020 - 17:05
    +3

    Assuming you are all co-tenants, my understanding is that during the period of the lease, you are all liable for the rent "jointly and severally".

    It seems you have a four week "break fee" in the lease, but that will only be applicable to the lease as a whole, not any individual.

    In short, you appear to have three options …

    1. Get the party who is leaving to continue to pay rent right the way up to the end of the lease (yes, this is their responsibility, but how realistic is this?)
    2. The remaining tenants all stump up extra to cover the shortfall (may not be possible with your circumstances, and obviously not desirable)
    3. You all move out and cop the break fee (again, probably not desirable, but all things considered this may be the cheapest and easiest way out of it for you all, although it obviously means you've got to go through the hassle of getting into another place)

    None of these are great, but unfortunately circumstances such as these are common in the sort of arrangement you have.

    • bohn on 18/08/2020 - 19:28
      +3

      This is basically the answer.

    • trustnoone on 18/08/2020 - 19:36
      +3

      You all move out and cop the break fee (again, probably not desirable, but all things considered this may be the cheapest and easiest way out of it for you all, although it obviously means you've got to go through the hassle of getting into another place)

      Just my 2c, might not be worth much, but for where I am the price of rent has changed dramatically. Its worth seeing whether you might end up finding a cheaper better place recouping that 4 weeks.

  • indium on 18/08/2020 - 17:11

    I have no idea when it comes to the law on this but my suggestion would be to tell the housemate they will need to continue paying rent until they find someone. If they can't find someone who will pay the full amount of their share then they need to just get someone for a discounted rate and continue to pay the difference for the remainder of the lease. If they don't agree to this then tell them you will take them to NCAT for any losses you experience from paying their share.

    It's not a fair situation as the housemate most likely signed the new lease at a cheaper than usual rate due to coronavirus.

  • lolz112 on 18/08/2020 - 17:44

    Could you take the 4 weeks rent and then advertise as a discount for the new person until the end of the lease. At the end of the lease either renegotiate at a lower rate or end the lease. At least this way you guys won't be out of pocket?

  • [Deactivated] on 18/08/2020 - 17:51
    -4

    🤦‍♂️🤣🤣🤣

    [Deactivated] on 18/08/2020 - 17:51 (Collapsed - Offtopic. Show)
  • Mulga Bill on 18/08/2020 - 18:11
    -3

    To me it sounds fair if he has offered to pay 4 weeks break fee - that's all it would cost if you all wanted to leave. So personally I feel you should break the lease (potentially renegotiate with the RE agent for better price) and resign for another 12 months - Worse that can happen is they try to increase the rent instead.

    Ultimately they can apply to the tribunal to be removed from the lease anyway and if they have offered to pay the fee to cancel I cant see why they would not allow it?

    • Whisper Quiet on 19/08/2020 - 08:40

      Doesn't work that way. He's signed a lease agreement so he's responsible for that time period. It's up to OP if he's decides to take it further in court or work out another deal with the housemate. If anything is unpaid then real estate will take them both to court. If they could find someone else to take over his share and swap lease over then everything would be fine but since they can't, housemate is still responsible.

      • Mulga Bill on 19/08/2020 - 13:29

        Ok, so lets look at the scenario with just one tenant. They can pay 4 weeks and cancel the tenancy agreement. So how is this different?

        • dizzle on 19/08/2020 - 13:57
          +1

          If you buy a house with a friend, 2 years later he wants to sell. He can't just get his money back and leave, either he finds a buyer to take over his section (which could be you if you can afford to), or you both have to sell.

          It's the same with a fixed lease. Either he finds someone to take over for the remaining part of the lease, or they both have to break it. Why should OP have to pay a break lease fee when it's the housemates choice. The housemate signed the lease, he has to live up to it.

          • Mulga Bill on 19/08/2020 - 14:14

            @dizzle: no-one is getting their money back but I do see your point with the house scenario…at the end of the day they can go through the courts and I would think it's likely the judge would ultimately allow the sale of a house with some sort of compensation.

            The OP is not paying a break fee though, the housemate is and I feel this is adequate compensation.

            Just my thoughts

            • dizzle on 19/08/2020 - 14:21

              @Mulga Bill: Yes, but if housemate leaves and they can't get anyone in (not surprising since Real estate is still charging high price) then they will have to break the lease. That's my point. Just because he's suggesting that paying 4 weeks and is out, doesn't mean he is done if they have to break the lease.

        • Whisper Quiet on 20/08/2020 - 00:22

          That's for the entire lease to stop. If the other housemate doesn't want it then it can't be recognised. They signed a legally binding contract for a year. So it's his responsibility to make sure it's covered in any event. You need both parties to agree to end it and pay it out, otherwise it's still a contract.

          • Mulga Bill on 20/08/2020 - 12:04

            @Whisper Quiet: …or simply go the the tenancy tribunal who will decide then compensation.

  • kazoomyn on 19/08/2020 - 08:16

    Don't know the answer personally but maybe contact tenant advisory: https://www.tenants.org.au/about

  • OzHunterNSW on 19/08/2020 - 09:48
    -4

    He owes you nothing… don't you understand, he has no obligations to you.

    He should have paid "share BOND" and "rent in advance"… did he not?

    If he tells you that he is leaving, so be it. You simply get someone else in.

    He has no obligation to pay you four weeks in advance. What are you trying to SCAM?

    • ozbjunkie on 20/08/2020 - 03:43

      Pretty sure signing as a cotenant on a lease comes with the obligation to pay ones share of the rent.

      Technically this means that the tenant who wants to leave owes the real estate agent, not his cotenants.

      Of course, if the cotenants have to cover his part of the lease and he refuses to pay, then they can chase him for that money in small claims of the state cat tenancy tribunal.

    • RecklessMonkeys on 20/08/2020 - 21:26

      Are you the tenant in question?

  • MontyMacaw on 19/08/2020 - 11:38

    I would check the lease to see if you both jointly and severally liable for the rent. If not then you may have a bluff to say that you are only responsible for your share. The best option would be a hearing where you can put your case. The most likely outcome would be a recommendation to come to an agreement with the owner as they like to have parties come to a mutually beneficial deal. Last resort if you are going to be blacklisted and given a bad credit record is to hunker down and pay no rent for as long as you can which will cost the owner a hell of a lot more than being reasonable in these unprecedented times. You could get 3 months free rent in that time which would give you time to find another place before you good record is destroyed by a property manager that is being a pig.

  • Wickz on 19/08/2020 - 12:02
    -1

    If you are all listed on the lease, then the break lease cause is for the lease as a whole, not for an individual tenant (unless specified in the lease).

    Have you called your agent to ask what the option are? They may surprise you but they might be able to:

    • help you and the other tenant find a new property on their books (very rare but might happen) then you can all break lease
    • be able to negotiate a new rent now that 33% of the house income has left
    • be able to come to an agreement where you are and the other tenant pay X amount to the agent directly, and agent chases ex-tenant through XCAT for the remainder

    How are you currently paying rent now? Do each of you have a direct debit with the agency? Has the ex-tenant given notice to the agent or just to you? We need more information on who is on the lease to provide accurate advice.

  • Ginag on 19/08/2020 - 12:58

    If they are on the lease with the Landord they should be paying rent until they are replaced with a new person the lease. May be 1 week, may take 10 weeks. There is also a fee you have to pay agency to replace the names on the lease, typically a little over $100 so the outgoing person should pay that or at least 50/50 with the new incoming person.

  • Ginag on 19/08/2020 - 13:00

    Oops I should have said, the outgoing person will also be on the bond, so you need to sort that out and get the new person's name on the lease. And check the outgoing person hasnt caused damage before they leave or else you will be liable for their damage at the end of the lease.

  • Euphemistic on 20/08/2020 - 07:38
    -1

    Assuming he can legally leave the lease by paying the break fee can you not talk to the agent about a reduction given you now have x-1 tenants and the household income has now dropped to (x-1)/x. Eg 4 housemates has dropped to 3 so you now have 3/4 income.

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