Lease breaks and how they can save you money
Lease breaks happen for any number of reasons – family illness, job transfers, relationship breakdowns.
It can be easy to feel panic if you have just been told that your tenant is breaking their lease however it’s very similar to having a normal vacancy only you won’t have the fees to pay and there will be no gap between tenants. That said, there are a couple of things you need to know:
- The rent cannot increase until the current tenant’s lease has expired. For eg, if your tenant signed a 12 month lease at $300 per week from 1 January 2016 and broke the lease in April, the rent must remain at $300 per week until 1 January 2017
- Property investors must be reasonable when considering rental applications as they also have an obligation to mitigate the tenant’s losses.
- Tenants can apply to QCAT to have the lease agreement terminated due to reasons of hardship. This often means that the tenants do not have to pay any fees and are released from their legal obligations.
How can you protect yourself from losing money over a lease break?
The only way you can completely protect yourself from losses incurred in a lease break situation is to ensure you have a good landlord insurance policy like Terri Scheer or EBM Insurance. Need some info? Click on the button below to request a brochure on what you can be covered for.