Skip to content Skip to main navigation

Business

The voice of business in Canberra

How do you break a lease in the ACT?

By lionelvioletguyandslingsby - 1 August 2008 14

We simply can’t stand our house any more. It’s overpriced and dull. There are gorgeous properties for lease in Bungendore, Gunning and towns like those for half the cost. The petrol sums add up. The only problem is that we’ve still got six months on the rental contract left to run.

None of us have ever done this before, so how do you get out of a lease in the ACT and does it leave you with a big black mark against your name?

What’s Your opinion?


Post a comment
Please login to post your comments, or connect with
14 Responses to
How do you break a lease in the ACT?
sepi 4:27 pm 02 Aug 08

Also – go and check out some of these gorgeous cheap cottages out at Gunning etc before you make any rash decisions.

We looked at a couple to buy, and while cute in parts (and very cute in the real estate photos) they were often very ramshackle and drafty in real life, and located right ont eh highway.

Skip 5:58 pm 01 Aug 08

Your prospective new landlord would be well advised to stay clear of you just in case.

sexynotsmart 5:46 pm 01 Aug 08

This isn’t advice, but it’s what happened to us in the late 90s (one house purchase ago).

We had about four months lease to run on a rental house in Greenway, and found an absolute corker of a place for sale in Calwell. The vendors were moving to Brisbane later in the year, and were looking for a sale-and-rent-back arrangement. We asked the agent how long that might be. They said six months while the vendors bought something in Brisbane. That was a bit longer than we wanted to not live in “our new place”. Later that night after some thinking music and a brainwave from LoveBumps…

… we ended out conference calling our landlord and the agent. The next day the vendors did an “onsite inspection” of our rental place, and thought it was an OK place to live. The day after that, everyone OK-ed a 30-day settlement followed by a “house swap”. The new lease (in the vendor’s name) was extended to 6 months from the settlement date.

The icing on the cake was the move itself. We split the hire on a Hertz truck and helped move each others stuff the Friday after settlement. It only took two there-and-back trips.

Everyone was happy! The landlord had a longer lease, we were in our new house ASAP, the vendors had a roof to sleep under, and their agent had her commission.

Now there are probably some lawyers who will mutter warnings about ‘vacant possession’ (the conveyancer certainly did), but that’s the kind of outcome you only get in a big country town.

Heavs 5:16 pm 01 Aug 08

In this market any letting agent which cannot have the place rented inside a week would have difficulty proving that they are mitigating their loss.

tylersmayhem 4:39 pm 01 Aug 08

You should not have to pay any “fee” or one months rent for breaking the lease in any case!

As mentioned by southeeplace, the advertising costs are limited to 1 weeks rent only. In our case, we had to advertise for 2 weekends at a cost of about $90 all up. That does not mean the landlord has a right to the remaining one weeks rent.

Also, make sure that the advertising method that your landlord is using is not extravagant – i.e. a double sized ad with a border at double the cost of a normal sized ad.

shauno 4:25 pm 01 Aug 08

In the past ive just had to pay one months rent plus advertising costs in the paper. Easy especially in a strong rental market where the place gets filled very fast.

southeeplace 4:24 pm 01 Aug 08

I agree with sepi and tyler.

You will be liable to pay the loss that your landlord suffers, limited to 25 weeks worth of rent plus another week’s worth for advertising expenses (unless of course there is less than 25 weeks to run on the lease – in that case, you’ll need to payout the remainder of the lease (plus an extra week for advertising expenses)).

If the landlord finds another tenant within that time, you will only be liable to pay rent while the property remains vacant (ie, the loss actually suffered by the landlord). Note that the landlord has a duty to mitigate his or her loss – ‘A person who, apart from this section, would be entitled to compensation under this Act is not entitled to the compensation, or part of it, if the loss, or part of the loss, to be compensated could have been reasonably avoided’ (section 38 of the Residential Tenancies Act). Accordingly, they have a duty to act reasonably in obtaining another tenant as quickly as possible.

harley 3:47 pm 01 Aug 08

a smart place to look is here:

http://www.fairtrading.act.gov.au/pdfs/Agents/RealEstate/Renting_book_2007.pdf

or here:

http://www.tenantsact.org.au

or here:

http://www.act.gov.au/CAP/accesspoint?takeSnapshot=true&action=browse&breadcrumbs=1^175^188&id=188&taxonomy=_i&sort_by=%2BADC.Title,AGLS.Availability.corporateName

tylersmayhem 3:45 pm 01 Aug 08

Hi lionelvioletguyandslingsby: check-out http://www.tenantsact.org.au/Advice/ending.html

This site has been brilliant during our recent breaking of our lease after we bought a property. I also spoke with the volunteers from the Tenants union who were were really great.

There are quite a lot of misconceptions about breaking leases, but hopefully this site can dispel a few.

We are happy to say that our landlord found an “appropriate” tenant and our obligations are now over (other than leaving the place in good condition).

At the end of the day, I think it has a lot to do with your landlord/agent. In our case it was a private letting, and we both feel it would have been much more cut-and-dry dealing with an agent.

Both the landlord AND the tenant must mitigate against losses to each other. In our case, the landlord upped the rent by $15 per week, which while is not too much, there was an identical property 2 doors down in much better condition and features for the amount we were currently paying. This could have possibly worked against our landlord had they not attracted any new tenants. Our landlord also lived out of town and was not always readily available for inspections, so we took on an added responsibility of showing interested people through. While this is not expected, we saw it in our interest to do so.

Some main points are:

You give your landlord notice (as much as possible, but minimum of 3 weeks)

You leave on the date you gave notice of regardless of if the landlord agrees or not.

You should not continue to pay rent if the landlord cannot find a “suitable” replacement

You are obliged to compensate the landlord for any loses should they not find a suitable tenant up to 25 weeks or until the end of the lease – whichever is less), but this is for the Tenants Tribunal to decide – NOT the landlord.

If your landlord increases the rent amount for the new tenants, take regular screenshots from Allhomes and evidence from similar type properties in your area to identify if the amount of the increase is putting off punters.

I have spoken to many Real Estate agents during this process, and all of them said if they were re-letting a property when a tenant has broken the lease, they would always recommend to the landlord against raising the rent – in order to mitigate against losses to the tenant.

Have a chat to the Tenants Union, do the right thing by your landlord, and you should be fine. Luckily, if you are a good tenant, you have quite a lot of rights here in the ACT.

Aurelius 3:41 pm 01 Aug 08

Every lease is different.
Whatever advice you get here is not gunna be worth much unless we’ve read your lease documents.

Gungahlin Al 3:34 pm 01 Aug 08

Just find an acceptable replacement tenant. You may have to cover an extra week’s rent as the agent pockets that for all their *hard work*. But that should be it.

sepi 3:26 pm 01 Aug 08

You have to continue to pay rent up to when someone else moves in.
This person must go through the proper real estate channels of application, not just be a friend of yours.

You also have to pay for all costs of advertising the property to get new tenants. And the real estate will be in no hurry, as they have you paying til they get someone they like the look of.

There may also be a fee associated with breaking your lease.

madman 3:23 pm 01 Aug 08

I heard… and am not willing to back this up as I’m unsure of the trueness – but you have to pay the lease out.

You should also check what the lease says. There should be an exit clause or a clause called termination as it is pretty standard in any contracting.
I don’t write lease contracts though but would think they’d be based around the same principles of any deed or agreement.

cmdwedge 3:23 pm 01 Aug 08

Whilst I’d normally side with the renter (rather than the landlord), in this case, you’re just being an ass. If you signed up for a certain period, then see it out. Just because you’ve changed your mind partway through doesn’t entitle you to bail on your landlord.

I’m not sure about the legalities of breaking a lease, but the moral implications of breaking it because it’s ‘dull’ would weigh heavily on me. Because it’s infested with rats? Sure. Because the landlord won’t fix the hot water after 3 months of asking politely? Sure. Because you’re bored with it?

Come on.

Related Articles

CBR Tweets

Sign up to our newsletter

Top
Copyright © 2017 Riot ACT Holdings Pty Ltd. All rights reserved.
www.the-riotact.com | www.b2bmagazine.com.au | www.thisiscanberra.com

Search across the site