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Circumstances change so what can happen if you have to break your lease?

By Holly Darwon

IT’S hard to see the comparison between heart-throb and TV lawyer Harvey Specter and your average property manager.

But a part of managing rental properties means property managers attend court to represent their clients for various issues. Whether it be to recover lost rent, recover money for damage or to have someone evicted, your property manager dons their Sunday best, collates their evidence and swears on the bible all in the name of service.

It can be quite daunting.

For many years you had to attend the Magistrates Court but now you present your cases at the state based Civil and Administrative Tribunal.

I personally like to attend, it gives me the chance to channel my inner Denny Crane and also to stay current on Tribunal decisions.

The process that leads to these rooms is usually a conciliation conference call facilitated by a state-based government run organisation. In Queensland that is the Residential Tenancies Authority.

The outcome and decisions on these calls can be vastly different to the outcomes and decisions made at the Tribunal.

The most common current battle ground is around tenants breaking their leases. This is when a tenant decides they no longer want to occupy or pay rent at a property they have an existing lease on.

The tribunals have tightened up recently around this issue.

The reason a tenant wants to leave and the work of an agent to replace them have become vital in ensuring the lease is upheld. For example a tenant buying a property is a very weak reason to break the lease, but if the agent can’t demonstrate that they have actively tried to find a new tenant, then the courts may let the tenant out of their lease.

With vacancy rates currently peaking in Brisbane the agent must be able to show detailed evidence of activities to uphold the lease.

Tenants get quickly educated that the agent and owners must actively work to rent the property under the Act. Their dialogue can quickly change from initially asking ‘what happens now?’ to ‘what are you doing to mitigate my loss’.

The reality is it is also the tenant’s, as well as the owner’s responsibility, to mitigate the tenants loss.

Mitigating the tenant’s loss can mean reducing the rent. The tenant will be responsible for the discount during the time of their lease, but the ongoing loss is for the owner to bear.

This can be particularly frustrating for experienced landlords. Property rents peak seasonally, meaning a January lease start will attract a higher rent than an April start date. But unfortunately that’s just the way the cookie crumbles in the residential tenancy environment.

Here are some tips for tenants and landlords regarding a lease break:

— Inform the other party on the phone and confirm in writing of your intentions and what you plan to do to help rent the property.

— Whoever has the keys has possession. Tenants should return all keys and sign acknowledging all keys have been returned.

— Advertise the property. To avoid delays the tenant should pay for the cost of advertising

— Open for inspection twice weekly plus offer private inspections.

— Accept that a small price drop is cheaper than extended vacancy

— Presentation matters so good photos and a freshly presented property go along way

— Communicate regularly. My Dad once told me that intelligent people equally informed rarely disagree.

Circumstances change in everyone’s life and these situations can be easily managed if handled appropriately. Agents usually only charge a small fee, equivalent to a week’s rent, to help find a tenant. If handled correctly with enough notice a break lease can be an easily managed process.

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