BREAK A LEASE AT YOUR PERIL

ER­RANT TEN­ANTS FACE BE­ING HIT FOR RESID­UAL COSTS

Ellenbrook Advocate - - WHAT'S ON PLANNER -

FALL­ING rental rates, low house prices and eco­nomic un­cer­tainty are fu­elling a surge in Perth ten­ants break­ing their leases.

REIWA pres­i­dent Hay­den Groves said their ad­vice line had re­ceived a lot of calls about break lease sit­u­a­tions.

“At the mo­ment, both the rental and sales mar­kets are fac­ing down­ward pres­sure, which is un­usual,” he said.

“It could be that ten­ants are tak­ing the op­por­tu­nity to buy their own home but they are also tak­ing ad­van­tage of the lower rental prices.

“A lot more break leases are oc­cur­ring, es­pe­cially in the apart­ment sec­tor, where new apart­ments are com­ing to the mar­ket.

“A ten­ant liv­ing in an older apart­ment might find they can rent a brand new apart­ment for the same price as their old one and are break­ing their lease.”

While saving money on rent or buy­ing a home might be at­trac­tive, break­ing a lease could be risky and costly for the ten­ant.

The Res­i­den­tial Ten­ancy Agree­ment is a le­gal con­tract and the owner is en­ti­tled to en­sure their fi­nan­cial po­si­tion is no worse off as a re­sult of a ten­ant break­ing their ten­ancy agree­ment.

“Ten­ants may not re­alise that they are li­able for the rental pay­ment un­til the lease ends,” Mr Groves said. “And while the owner must at­tempt to mit­i­gate their losses, if they can­not find a new ten­ant at the same price, the for­mer ten­ant can be li­able for any dif­fer­ence.

“For ex­am­ple, if the ten­ant was pay­ing $400 per week and the new ten­ant is pay­ing $350 per week, the va­cat­ing ten­ant may have to pay the dif­fer­ence un­til their lease ends.”

Ten­ants may also be li­able for other costs, in­clud­ing up­keep on the premises, as well as any other rea­son­able costs in­curred by the owner un­til a new ten­ant is found or the orig­i­nal lease ends.

Ten­ants may not re­alise that they are li­able for the rental pay­ment un­til the lease ends. And while the owner must at­tempt to mit­i­gate their losses, if they can­not find a new ten­ant at the same price, the for­mer ten­ant can be li­able for any dif­fer­ence.

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