Breaking Lease Before Leaving

[Bumblebee]

Hi, 

I'm going to speak to my Real Estate agency today about 'hypothetically' breaking my lease to come home - I'm waiting on UK passports for the children so cannot book anything till they come through. It will all be quite a last minute rush I feel. Ideally I need to be home before Jan 15 to apply for my youngests school place. 

Has anyone broken a lease over xmas/new year? Can I literally hand keys in and get on the plane or do I need to be in the country for anything? I will leave a good friend with helping tie up any loose ends but I'm thinking if the house is clean and empty I can just go?  So like Jan 2nd hand keys, 3rd get on a plane? Obviously I will let them know in say November officially so we can find another tenant.

If I have to give house back before xmas to have it all done and dusted I'd be spending my last xmas in Oz on peoples floors etc, not too fun. Its all a bit stressful as it is I'd like to somewhat rest before I travel back with two young kids!

If anyone has any advice that's be great, 

Thanks!

[Marisawright]

1 hour ago, Bumblebee said:

Has anyone broken a lease over xmas/new year? Can I literally hand keys in and get on the plane or do I need to be in the country for anything?

Breaking a lease over Xmas/New Year is no different to breaking a lease at any other time of year.   Once you've handed over the keys, you don't need to be in the country for anything.  I'm assuming you'll leave your Australian bank account open for a while to receive the bond refund.

There are a couple of hitches about moving at Xmas/New Year though. 

One is that real estate agents sometimes close for that first week in January so you won't be able to hand back the keys - and until they've got the keys back, they can't issue them to the new tenant. So check that - worst case scenario is you have to leave the keys with your friend and they hand them in once the office re-opens.

The other hitch is that because it's holiday time, when fewer people will want to move house, you may end up paying rent for longer.  It depends what your lease says. The usual clause says that you pay for the advertising, plus you have to go on paying rent until a new tenant is found. So for instance, you might give them notice that you'll vacate on 2nd January, but if the new tenant isn't ready to move in until the 25th, you'll have to go on paying rent until the 25th.

However, your lease may have a break clause instead, which says you have to pay a fixed penalty (usually 4 weeks' rent) if you want to break the lease. That penalty applies even if they find a new tenant to replace you early - but by the same token, you're not liable if the property lies empty for weeks after you leave.

If your lease has a fixed penalty, then I would just give them notice on 1st December that you're breaking the lease and that's that. Why should you put yourself out to allow them to do inspections etc at such a busy time, if it's of no benefit to you?

Check what your lease says about breaking the lease (don't rely on what the agent says - as @Fisher1 found, they don't always know what they're talking about).   

[Bumblebee]

Thanks for the reply...

So I spoke to agent, she has said I'd have to pay one weeks rent ($340), $270 for advertising, $100 board check? And then rent until its let. 

She said lots if people look aver Xmas when they're off work so as soon as I can let her know the better. They're closed till Jan 7 so can get a friend to hand in keys for me perhaps. 

Yes I'll keep a bank account open. 

Hoping passports don't take too long, I've read 6-8wks, so its all cutting it fine. Ideally I tell them in November and someone snaps it up and confirms before Xmas that  they'll take it early Jan. 

The lease also says I could find someone to take over the lease, although of course they'll still need to be approved. I might shout out in Nov on our local village favebook page to see if there's any interest??

 

[Guest]

Is there a way you can break lease earlier outside the Christmas/New Year period? Find a few cheapish bnb's or house sit or with a friend/family? Might mean moving around a bit but the bonus would be more time to find a tenant and you could send your household items on a container/movecube etc. beforehand to give a head's start. The earlier you can do this before Christmas/New Year the better. Yes there are people who look to move house in this period (we were such people a while ago) but there were slim pickings for the type of place we were looking for (which could be a good thing in your circumstance but it's a risk).

[Marisawright]

5 hours ago, Bumblebee said:

Thanks for the reply...

So I spoke to agent, she has said I'd have to pay one weeks rent ($340), $270 for advertising, $100 board check? And then rent until its let. 

 

Okay.  But please, do read the lease and make sure the lease says the same thing.  Fisher1 got caught out recently because her agent told her that - but then, after they'd moved out, she discovered there was a penalty clause in the lease so the agent had got it wrong.

[Fisher1]

6 hours ago, Marisawright said:

Breaking a lease over Xmas/New Year is no different to breaking a lease at any other time of year.   Once you've handed over the keys, you don't need to be in the country for anything.  I'm assuming you'll leave your Australian bank account open for a while to receive the bond refund.

There are a couple of hitches about moving at Xmas/New Year though. 

One is that real estate agents sometimes close for that first week in January so you won't be able to hand back the keys - and until they've got the keys back, they can't issue them to the new tenant. So check that - worst case scenario is you have to leave the keys with your friend and they hand them in once the office re-opens.

The other hitch is that because it's holiday time, when fewer people will want to move house, you may end up paying rent for longer.  It depends what your lease says. The usual clause says that you pay for the advertising, plus you have to go on paying rent until a new tenant is found. So for instance, you might give them notice that you'll vacate on 2nd January, but if the new tenant isn't ready to move in until the 25th, you'll have to go on paying rent until the 25th.

However, your lease may have a break clause instead, which says you have to pay a fixed penalty (usually 4 weeks' rent) if you want to break the lease. That penalty applies even if they find a new tenant to replace you early - but by the same token, you're not liable if the property lies empty for weeks after you leave.

If your lease has a fixed penalty, then I would just give them notice on 1st December that you're breaking the lease and that's that. Why should you put yourself out to allow them to do inspections etc at such a busy time, if it's of no benefit to you?

Check what your lease says about breaking the lease (don't rely on what the agent says - as @Fisher1 found, they don't always know what they're talking about).   

And make sure that if they do agree to anything, you get it in writing, preferably signed!

[Fisher1]

18 minutes ago, Marisawright said:

Okay.  But please, do read the lease and make sure the lease says the same thing.  Fisher1 got caught out recently because her agent told her that - but then, after they'd moved out, she discovered there was a penalty clause in the lease so the agent had got it wrong.

Good news today! We had sent a FB message to the boss of the agency via their facebook page, pointing out thwt we hwd been waiting patiently for a reply to our three requests for a breakdown of the figures cited in their recent invoice. We actually got a response, saying that he would hand our message to his property managers. 

We went to the agency office a planned and asked to speak to our agent. Incredible response ... Ushered into her office and very pleasantly she explained that she had been "looking at the options." Incredible. I told her that we had been advised that an agent represented the landlord and any agreement made by the agent could not be subsequently overuled by the landlord.

Well there was a bit more waffling and then we got down to the nitty gritty of her strange credit balances. Eventually we agreed to leave the figures  that I had taken along with her and she would call us.  They caved. Text this afternoon agreeing to charge one weeks rent, new lease fee and gst plus advertising. We are now getting a substantial refund on top of our bond.

IWe even got an apology. 

So bumblebee, keep everything, and get them to sign any agreement. Be prepared to get nasty if it all goes pear shaped and dont trust a word any of them say. Good luck!

 

Edited August 27, 2018 by Fisher1

[Marisawright]

Yippee!

[Bumblebee]

Interesting, I cant see anything written in my lease thatblooks like a lease break fee rather than costs etc. But she did say the same things you did Fisher1, one weeks rent, advertising and the other small fee. I haveva friend in real estate, I'll ask her to also look at it for me.

 

Ozzie I'm starting to think I'll have to, but it'll still be mid Dec earliest tbay anyobe could move in...here's hoping! 

[Fisher1]

On 27/08/2018 at 22:27, Bumblebee said:

Interesting, I cant see anything written in my lease thatblooks like a lease break fee rather than costs etc. But she did say the same things you did Fisher1, one weeks rent, advertising and the other small fee. I haveva friend in real estate, I'll ask her to also look at it for me.

 

Ozzie I'm starting to think I'll have to, but it'll still be mid Dec earliest tbay anyobe could move in...here's hoping! 

Yes our agent did quote the same sort f thing,  then backtracked after we had handed back the keys. I knew about the lease break fee (its clause 41 in your agreement) but thought that if the tenancy ends by mutual agreement and a new tenant has been found then it would not apply, which is why i believed the agent.  

We were advised that if the agent makes an agreement (and you can prove it) the landlord cant just over rule it because the agent was acting on their behalf. In the email agreeing costs the agent also said that the landlord was in agreement so I think thats what helped us most.

I think the lease break fee is a bit of a grey area ... in the past, tenants who had to leave early were charged rent until a new tenant was found or until the end of the lease. I read that the lease break fee  was supposed to protect the tenant by limiting ongoing rental charges to four weeks. Our lease contained the lease break clause but also contained a second clause about paying rent until a new tenant moved in. I thought it would be one ir the other but they seemed to want both! 

Our agency also questioned :- the day we left; the total number if days we had paid in advance and the day the new tenant moved in. Luckily I could prove my own dates and figures from emails and bank statements.

No matter how nice they seem, dont rely on anything that isnt written down!

Edited August 28, 2018 by Fisher1

[Marisawright]

1 hour ago, Fisher1 said:

Yes our agent did quote the same sort f thing,  then backtracked after we had handed back the keys. I knew about the lease break fee (its clause 41 in your agreement)

Many leases still don't include a lease break fee clause.  It depends where the property is.

If it's in an area where properties rent quickly, the lease is more likely to have a lease break clause because it's a nice earner for the landlord - he is guaranteed to collect 4 weeks' rent from the departing tenant, plus he knows he'll get a new tenant quickly.

If it's in an area where properties can lie empty for weeks before finding a tenant, the agent won't use a lease break fee, because then the departing tenant has to keep on paying the rent until a new tenant is found - no matter how long that takes.  

[Bumblebee]

7 hours ago, Marisawright said:

Many leases still don't include a lease break fee clause.  It depends where the property is.

If it's in an area where properties rent quickly, the lease is more likely to have a lease break clause because it's a nice earner for the landlord - he is guaranteed to collect 4 weeks' rent from the departing tenant, plus he knows he'll get a new tenant quickly.

If it's in an area where properties can lie empty for weeks before finding a tenant, the agent won't use a lease break fee, because then the departing tenant has to keep on paying the rent until a new tenant is found - no matter how long that takes.  

yes I had another look - no break lease clause and just the fees as mentioned above. Really hoping that my kids passports come super quick and we can start looking from November. I think its a great little spot, nice unit in a sought after village near the train station, we're northern suburbs of Melbourne. I will do all I can to find someone too - I'll ask everyone!

[Fisher1]

1 hour ago, Bumblebee said:

yes I had another look - no break lease clause and just the fees as mentioned above. Really hoping that my kids passports come super quick and we can start looking from November. I think its a great little spot, nice unit in a sought after village near the train station, we're northern suburbs of Melbourne. I will do all I can to find someone too - I'll ask everyone!

good luck, hope you find someone quickly.