What were they thinking with this new ‘break lease’ legislation?
A ‘break lease’ is when a tenant can’t or doesn’t want to complete the agreed term of their lease.
Previously the tenant was responsible for the lost rent and expenses occurred until a new tenant was found.
It was the owners responsibility to proactively look for a new tenant to mitigate any loss the tenant would suffer.
Obviously some tenants have valid grounds to break a lease and are suffering hardship.
An easy example of this are victims of domestic violence looking to escape their tenancy.
In these situations, severing a tenancy with no/low penalty for these victims is a no-brainer.
But those changes were made about a year ago!
These new changes now limit the amount of money an owner can claim from any tenant who breaks their lease.
It’s a sliding scale: four weeks if they’ve completed only 25 per cent of their lease down to one week if the tenant has been in the property for over 75 per cent.
This is the total amount the tenant has to pay, including advertising, rental leasing expenses and lost rent.
What’s the point of even having a lease one might ask.
Currently the main reason tenants are breaking their leases is due to purchasing a property.
Which is a completely avoidable reason or at least a foreseeable expense for a tenant.
This is just a transfer of hardship from one party to another.
Not all landlords are rich and not all tenants are leaving properties because they are poor or suffering hardship.
We operate on a 3-5 day turnaround with vacates, so if it all works out seamlessly – the landlord would only be liable for 2-3 days rent from the tenant.
This new statutory formula is only applicable for tenancies entered into from 30 September 2024 onwards (not existing tenancies).
Last week when I read my column to my wife Aleesha (I force the entire family to hear them under duress) she made a very accurate observation. “It sounds like traffic calming” she said. “What do you mean?” I asked back, annoyed that she wasn’t glowing in adoring feedback about … Read more
Most sellers lose money in the same three places. Here’s how to avoid them. Ideally, start preparing 4–6 weeks before you list. A little effort before your property hits the market can make a significant difference to both the sale price and how quickly it sells. Start with a fresh … Read more
Cush for Comment: Why New Break Lease Rules Make No Sense
What were they thinking with this new ‘break lease’ legislation?
A ‘break lease’ is when a tenant can’t or doesn’t want to complete the agreed term of their lease.
Previously the tenant was responsible for the lost rent and expenses occurred until a new tenant was found.
It was the owners responsibility to proactively look for a new tenant to mitigate any loss the tenant would suffer.
Obviously some tenants have valid grounds to break a lease and are suffering hardship.
An easy example of this are victims of domestic violence looking to escape their tenancy.
In these situations, severing a tenancy with no/low penalty for these victims is a no-brainer.
But those changes were made about a year ago!
These new changes now limit the amount of money an owner can claim from any tenant who breaks their lease.
It’s a sliding scale: four weeks if they’ve completed only 25 per cent of their lease down to one week if the tenant has been in the property for over 75 per cent.
This is the total amount the tenant has to pay, including advertising, rental leasing expenses and lost rent.
What’s the point of even having a lease one might ask.
Currently the main reason tenants are breaking their leases is due to purchasing a property.
Which is a completely avoidable reason or at least a foreseeable expense for a tenant.
This is just a transfer of hardship from one party to another.
Not all landlords are rich and not all tenants are leaving properties because they are poor or suffering hardship.
We operate on a 3-5 day turnaround with vacates, so if it all works out seamlessly – the landlord would only be liable for 2-3 days rent from the tenant.
This new statutory formula is only applicable for tenancies entered into from 30 September 2024 onwards (not existing tenancies).
Latest News
WHY SUPPLY CHAIN DELAYS SHOULD SEND SHIVERS DOWN SPINES
Last week when I read my column to my wife Aleesha (I force the entire family to hear them under duress) she made a very accurate observation. “It sounds like traffic calming” she said. “What do you mean?” I asked back, annoyed that she wasn’t glowing in adoring feedback about … Read more
Read Full Post
How to Prepare Your Home for Sale: A Practical Guide
Most sellers lose money in the same three places. Here’s how to avoid them. Ideally, start preparing 4–6 weeks before you list. A little effort before your property hits the market can make a significant difference to both the sale price and how quickly it sells. Start with a fresh … Read more
Read Full Post