Tenant wanting to break fixed lease

[olive]

Hello...I am a new landlord so would appreciate some help...we have a tenant who signed a fixed term lease until Feb...they called to say they are moving in November as they have another house through a family trust. I said I would appreciate if they moved in Jan rather than end of November but they said we will be moving regardless...they are good tenants and I understand peoples circumstances change, but I've also got a mortgage and cashflow to manage, and we've just rented another property, which took a good month to find tenants, as the rental market is very quiet at the moment. Please can someone answer these questions for me.

What is the rule around putting the house up for sale while tenants have a fixed term lease, when they are wanting to leave or will be leaving regardless of the lease.

Do the tenants pay to find other tenants to replace them from their fixed term lease, or do we?

Are we within our rights to say you signed up the lease until Feb, and shouldn't have committed to another property before you lease expiry date, you will have to continue to pay until we find a suitable tenant, and if that isn't until Feb so be it.

I would appreciate some advise from some old heads on how to handle this the best way for everyone.

Thanks
Olive

[AndrewK]

I might be reasonably soft some people will no doubt tell you to make them pay til the lease is over.

Me personally, I would tell them that until you have selected a new tenant they will continue to pay rent. Once you have a new tenant in then you will agree to let them out.

Im sure others might disagree but thats how i would handle it.

[whitt]

Agree.
Be nice and tell them that once you have secured a new tenant then you will let them off.

[mjmarketing]

What is the rule around putting the house up for sale while tenants have a fixed term lease, when they are wanting to leave or will be leaving regardless of the lease.

Do the tenants pay to find other tenants to replace them from their fixed term lease, or do we?

Are we within our rights to say you signed up the lease until Feb, and shouldn't have committed to another property before you lease expiry date, you will have to continue to pay until we find a suitable tenant, and if that isn't until Feb so be it.

There is nothing to stop you putting the house up for sale but of couse the settlement date cannot be before the end of the fixed tenancy date unless with their agreement it could be sooner which could suit both parties.

They are legally liable to pay till the end of the lease - but I also agree with the previous posts - when you find new tenants let them out of their contract. You could also ask them to find new tenants (which you approve of) to help themselves out of the contract.

Above all be nice to them - discuss the whole situation - put the alternatives to them and see if a win-win result can be reached. If you upset them then you run the very real risk of them doing damage to the place before they leave - situation to be avoided at all costs.

Cheers
Makaela

[AndrewK]

And whatever you do dont involve their bond money as a form of payment.

We recently had a tenant on Fixed Term who wanted out so our property manager kindly told them from the date they left until I had a new tenant the rent would come out of their bond.... needless to say the place was left in an absolute mess and I had to talk to the property manager about handling it better in the future. Fortunately it took less than a week to find a tenant and get her moved in and she cleaned the place she wanted it that much as if it had taken longer than I had bond I would have been out of pocket.

[essence]

Some hints

Ring Tenancy Services (0800836262) and explain what is happening and they'll give you some pointers.

Read this. It'll take a while. As a Landlord you should know this Act intimately. Many a tenant will try and baffle you with bull-dust, if you know the Act you'll know your and their rights.

[mjmarketing]

Yes agree that we all need to know the RTA - but isn't this a lease?

[drelly]

Hi Olive,

The tenant sounds like they're moving house to save money so there is no good reason for breaking the tenancy. Here's what I would do....

Option #1
Inform them that they will be held liable until the end of the fixed term but if they are able to supply you with a tenant (at their cost) that is acceptable to you under the same terms as the current tenancy, you will end the agreement early. THEY need to find a new tenant, not you. Chances are they will put it in the "too hard" basket and stay until the end of their FTT.

Option #2
However, if they stand firm and plan to leave anyway, then look for a new tenant yourself and make sure you record all your costs and time in doing so. Refuse to settle on the bond or allow them to use it to pay any rent. AFTER you have a new tenant in place, lodge a tribunal claim against the old tenants including all costs and rent to the start of the new tenancy including the bond of course. Do not tell the tenants that you will do this or they will probably stop paying rent even earlier!

Option #3
Explain that they are liable for rent until the end of the fixed term but as you are such a kind hearted landlord, you will allow them to *BUY* their way out of the tenancy early. They give at least 3 weeks notice, pay rent until the leaving date and then also sign the whole bond over to you. This could be to your advantage if you can get a new tenant easily. Note that I did this recently and ended up losing money even with the bond as the rent market had slowed so badly. Check this out first.

What ever option you take, remember that the tenants are the ones making life hard for you and that if you're soft, you lose money and sleep and gain stress and grey hairs. Don't take on board their problems as your own.

Good luck!