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Important announcement for Property Managers

14 May 14

What you need to know about break leases and showing tenants through a property.

The number one issue that REISA is receiving at the moment is the situation of showing tenants through a property when a tenant wishes to break their lease.

The amendments to the residential tenancies legislation removed the ‘consent of the tenant’ clause which has thrown this situation into disarray.

REISA will be strongly advocating for the need for the legislation to be amended as soon as possible to remedy this situation.

Example

Take the example of a fixed term tenancy that ends on 30 November 2014.  The tenant wishes to break the lease today – 13 May - and for the property manager to start showing tenants through the property immediately.  Is this possible under the new legislation?  It seems not.

The only legal solution at the moment is for the landlord and tenant to vary the lease to make a new end date.  However, this has issues relating to break lease costs (is the tenant responsible as they have not abandoned the property?) and the situation when the property manager still has not found a tenant by the agreed new date.

Solution

REISA has consulted extensively with Consumer and Business Services on this issue and has received the following advice:

The most practical solution we suggest is that a tenant should inform a landlord in writing that they will be vacating the property before the end of the lease.  The landlord/agent should respond by a letter of acknowledgement which confirms the vacate date, the fact that the tenant will be liable for break lease costs (if that is what is sought by the landlord) and that the landlord/agent will be showing prospective tenants through the property in the 28 days before that vacate date in accordance with Section 72(1)(f).

REISA will continue to work hard to bring the Bill back to Parliament to remedy this glaring deficiency in the legislation.

If you have any questions, please contact Paul at REISA on 8366 4362.

 

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