Breaking Lease- Agent Asking for All Sorts of Fees

Lak 27 on 06/02/2017 - 17:59
Last edited 07/02/2017 - 17:10

The good people of the community, please help me as this is the first time I have come across a situation while breaking fixed term lease.
I am breaking a fixed term 6 month lease in 3rd month due to work relocation out of WA. The agents have been informed in advance and they have come back asking for some weird fees like:

  1. Advertising cost
  2. Final bond inspection
  3. Property Condition Report
  4. Letting Fee – 1.5 weeks rent
  5. You will be required to pay rent until a new tenant is secured and moves into the property.

While I can understand #1, don't understand #2 and #3 at all. #4 I am trying to negotiate but no success.

Look to any guidance on how to dispute these charges/ anything I should throw back at agents to wriggle out.

Home & Garden

Comments

  • bobbified on 06/02/2017 - 18:13
    +15

    Read the lease document that YOU signed - any fee the agent wants to charge will be listed in there. End of story.

    Ask the agent to point out to you, in your lease, where any other additional fees are listed.

    • ak 27 on 06/02/2017 - 19:15
      +2

      The lease document is pretty vague, it says: "The tenant may be liable for losses incurred by lessor …" No mention of any such fees in it

      • bobbified on 07/02/2017 - 10:43
        +21

        To be honest, I'd dispute it anything that is not clearly written in the lease agreement. That's the nature of a contract.

      • AlanHB on 07/02/2017 - 12:47
        +1

        Wow yeah that's vague. But still for "losses" I'd expect the only loss incurred would be rent as the other fees would be incurred through a usual ending of the lease anyway.

        Doesn't put you in a great position though, as this could potentially mean paying the rest of your lease. I'd offer one month's rent to cover the loss and see what they say.

        • OzzyOzbourne on 07/02/2017 - 13:10
          +2

          They will expect you to pay the rent until they find a new tenant. And don't expect them to find a new tenant.

      • timbobjim on 08/02/2017 - 16:31

        Check out this great page for VIC: https://www.tuv.org.au/advice/breaking-your-lease/

        Note: You should only pay rent up until the day that you vacate. Once the new tenants move in, you can then pay the landlord compensation for any lost rent.

        It's a bit risky if the landlord does not find a tenant straight away however if it's a high traffic area and you think it will get leased quickly then they can only charge you for actual losses. Note your states rules might be different.

        So it's a gamble either accept the charges as they stand now which are fixed or take a risk that the actual costs once the tenant is found are less.

        Also note the part about: You should make sure the landlord or agent are taking steps to relet the property after you give notice

    • tomlikesbeetroot on 09/02/2017 - 11:00

      Not everything that agents put in a lease is legally binding, steam cleaning carpets for example a lot of agents put this on the lease when they legally cannot force you to do it.

      • Gnosh on 18/02/2017 - 09:06

        I'm interested in this. I've always thought you have to. could you provide a source? (please :))

        • tomlikesbeetroot on 18/02/2017 - 16:18
          +1

          Confirmed it by a phone call to bond administrator that clause in contract is not valid unless the landlord can prove they were steam cleaned when you moved in.

        • Gnosh on 26/02/2017 - 15:21

          Good to know. Thanks :)

    • Steptoe on 06/02/2017 - 18:32
      +12

      the landlords problem

      True if the lease had expired, but not in OP's case

      • ak 27 on 06/02/2017 - 19:16

        Yup I still have 2.5 months on lease :(

    • CurrentCalculations on 08/02/2017 - 15:27

      They are not the landlords problem when the agreement in the contract was for 6 months.

  • Steptoe on 06/02/2017 - 18:16
    +6

    Assuming you are in Victoria, here are you liabilities;

    https://www.consumer.vic.gov.au/housing-and-accommodation/re…

    Fees for breaking the lease

    If you break a lease, you may have to pay some of the following:

    Rent

    You may have to pay rent until the end of your lease or until a lease with a new tenant begins.

    Re-advertising costs

    You may have to pay reasonable costs for the landlord/agent to re-advertise the premises.

    Re-letting fees

    Re-letting fees are usually calculated on a pro-rata basis, whereby the number of months left on the lease will determine the pro-rata percentage applied to the payment.

    For example, if the re-letting fee is $450 and there are six months left on a 12-month fixed-term lease, you would have to pay a pro-rata amount of 50% of that fee ($225).

    Details about re-letting fees to be charged may be included in a lease agreement or in information provided at the start of a tenancy.

    You should check your individual lease agreement to see if it contains details on how these charges are calculated.

  • chinezejew on 06/02/2017 - 18:17
    +4

    Worst comes to worst.
    Do not pay more than the remaining cost of lease.
    Good luck

    • [Deactivated] on 08/02/2017 - 11:33

      Yeah 3 months into a 6 month lease, ouch. I'd just pay out the remainder of the lease or keep paying until they find a new tenant.

      You're lucky enough to be on a 6 month lease to begin with.

  • juventino on 06/02/2017 - 18:18
    +9

    1, 4 and 5 are pretty standard fee if you decide to break the lease. So they are to be expected. #4 can be pro rata, and should listed somewhere in the tenancy agreement.

    do not pay #2 and #3, those aren't enforceable, and against the law. Show the agents this link below.

    https://www.commerce.wa.gov.au/consumer-protection/additiona…

    Oh, if you think the agent is dodgy, apply Rental Bond Authority to get back your bond first. Let the agent chases you for it, so they will have to do the legwork of submitting evidence to the relevant tribunal

    • MITM on 06/02/2017 - 18:50
      +1

      How s/he going to get he bond back without the RE ok ?

      Maybe they slipped #2 & #3 into your lease. See if you can find it.
      #4 Re-let fee is usually 1 weeks rent. Again, check your lease.

      • juventino on 06/02/2017 - 19:24
        +2

        if the tenant applies for the bond release first…then RE would have to submit application, evidence and paperwork if they wish to deduct the bond for any repairs. Dodgy ones tend not to pursue further if tenant gets the application in first.

    • ak 27 on 06/02/2017 - 19:21

      Thanks for the link, there is no mention of #4 in the agreement.

      Not sure how the bonds can be claimed as it was processed through agents, if you have any links handy and help. Cheers

      • juventino on 06/02/2017 - 19:30
        +1

        again. it is all listed on the website I provided before

        https://www.commerce.wa.gov.au/consumer-protection/disputes-…

        Bond disposal can be started by either the agent or you as a tenant.

        Once you submit the application ( for full refund), REA has 7 days to reply or dispute otherwise full amount goes back to your account.

    • HeWhoKnows on 07/02/2017 - 22:13

      Not exactly correct.
      Firstly your link does NOT apply to Lease Break. There is a separate document outling the costs and they are as the agent has stated.
      Secondly agent will not release the bond and authority wont release it without agents signature. OP could also be listed on a tenancy database for dodging costs. Not good advise I'm afraid.

  • [Deactivated] on 06/02/2017 - 18:58

    Sounds like a familar property in Kedron QLD
    My lease expires in June and I can't wait to be out of here
    Having a drug dealer and his "thugs" does little to appease me everytime I come home
    Not to mention his girlfriend on the meth trying to smash the door down lol

    • ak 27 on 06/02/2017 - 19:24
      +3

      Sorry..feel for you

    • HeWhoKnows on 07/02/2017 - 22:15
      +3

      This gives you a legitimate reason to break your lease early. Firstly advise agent of this situation and ask them to do something about it. If nothing happens you have covered yourself.

  • spedohero on 06/02/2017 - 19:17
    +1

    Well, you can fix 1 and 5 by getting new tenant yourself. However please bear in mind, you are not allowed to advertise your rental property openly in the market.

    • ak 27 on 06/02/2017 - 19:24

      Yeah, had it much easier in VIC where I transferred my lease onto someone- no hassles and the agents were sweet.
      Was denied the transfer option straight away here saying it would be a new lease.
      Thanks for the tip though on advertising :)

    • Kevan2 on 06/02/2017 - 21:27

      But can you offer- break lease opportunity in Suburb .

      Has the agent got someone else lined up for a months time so you will need to pay lost revenue. Agent. Still gets commission, and lsndlird gets net rent.

      Stuff then and get suitable Tennant, you may have to do your own Tennant check.

      If you move out , the agent gets all your fees, and perhaps a new finders fee. Lol. Hate my phone will not let me correct spelling errors.

      Also can you sublet by adding another to lease for all trouble it may bring.

      • ak 27 on 07/02/2017 - 11:40

        Cant sublet- thats pretty clearly stated in the agreement. The agents don't seem to be in any hurry to find new tenants :(

        • [Deactivated] on 12/02/2017 - 20:32

          If they're not making reasonable efforts to find a new tenant, you are entitled to take them to the relevant magistrates court/civil administrative tribunal and the court will terminate the lease for you, and will look very dimly on the real estate agency. Chances are you will walk away with the full bond and no additional fees.

    • HeWhoKnows on 07/02/2017 - 22:16

      "you are not allowed to advertise your rental property openly in the market."
      Why not? Nothing prevents OP from doing so
      In fact the WA authority suggests this course of action to save costs!
      Check the WA Break lease fact Sheet

      • spedohero on 07/02/2017 - 22:37

        You can't advertise rented property in victoria because you don't own it hence don't have the rights, at least in victoria.

  • Findo on 06/02/2017 - 20:47
    +1

    Just pay out the remainder of the lease and sublet the apartment, or even put it on air bnb

    • try2bhelpful on 06/02/2017 - 21:19

      +1 on this, but make sure you get someone you can trust.

    • Kevan2 on 06/02/2017 - 21:28
      -2

      Air bnb may have some legal implications, see recent aca show.

    • ak 27 on 07/02/2017 - 11:42

      Cant sublet and I have to get an apartment in new place- pretty sure the rental databases would have my name. I guess the only reasonable way forward is to deal with agents

  • Gronk on 06/02/2017 - 21:54
    -2

    Not from WA so I'm not sure if this carries across, but I'd argue that items 2, 3 and 4 aren't reasonable.

    Items 2, 3 and 4 all look to be costs the owner would incur as part of the normal re-letting process, there's no 'loss' incurred by the owner there because they'd have to pay it anyway should you have decided to leave at the end of your tenancy agreement.

    I think you're only liable for #1 and #5, but having said that the agent is probably fully aware that fighting this is going to be more trouble than it's worth from your perspective given that you need to leave in a bit of a hurry due to your work situation.

    • ak 27 on 07/02/2017 - 11:43
      -3

      Agree 100%

    • ukmark on 07/02/2017 - 17:02
      +3

      Huh? 2, 3 and 4 are not one off fees, they are fees incurred for every tennant the property has. If the property has a six month lease, the landlord reasonably expects this cost at most twice a year. If you break a lease early, this potentially increases.

      Having said that, it is reasonable that if you stayed for half the lease, you should only have to pay half the costs. Also, if you pay rent until they get a new tennant, this should be adjusted. E.g. If you pay 4 months rent of the 6, you should only have to pay a third of the fees.

      • ak 27 on 07/02/2017 - 17:06

        Its a very good point to pro rata the fixed charges (if they are not waived in entirety) till the rent is paid or I would need to keep paying. Thanks @ukmark

  • Geewhizz on 07/02/2017 - 07:30
    +1

    Check with your state's housing authority. Work relocation may be considered a legitimate reason for ending your lease early, without penalty.

    • bobbified on 07/02/2017 - 12:10
      +1

      As far as I know, work relocation isn't a valid reason to end a lease early. That's a change in personal circumstances. I think the work relocation clause only applies in certain states in the US.

      The only change in personal circumstances I know of that can end a lease (in Victoria - not sure about other states) is if you're in financial hardship and you successfully apply to VCAT proving such.

  • Big Trev on 07/02/2017 - 08:01
    +2

    Look into whether fees should be pro-rata as well. For instance, if you're half way through a lease, any fees (eg advertising) should be be split 50/50.

    Be aware also that even if something is in the lease agreement, it doesn't necessarily make it enforceable.

    You should find some useful information here: http://www.tenancywa.org.au/

    • Big Trev on 07/02/2017 - 08:04
      +6

      Here you go: http://www.tenancywa.org.au/sites/default/files/Version%202%…

      "The Act states that, where a tenant abandons the premises, the lessor is entitled to compensation from
      the tenant for any loss (including loss of rent) caused as a result, but shall take all reasonable steps to
      mitigate that loss, and shall not be entitled to any loss that could have been avoided by taking all
      reasonable steps.

      The fixed costs (advertising, re-letting fee, final inspection and PCR) should be calculated pro-rata based
      on how long is left on the lease when the new tenant commences their agreement. For example, if you
      were in a 12 month fixed term agreement and the property is re-let 9 months into the agreement, you
      are only liable for 25% of the fixed costs. That is because those are not new costs, but costs that the lessor
      would have incurred at the end of the lease in any event, which have merely been brought forward as a
      result of the break lease."

      Also note that if they increase the rent when they readvertise it, or do anything to make it harder for it to be let (ie. advertising less than what they did when you leased it), then pretty much all bets are off as far as them trying to recover lost rent from you.

      Good luck with it.

      • ak 27 on 07/02/2017 - 11:44
        +2

        Thanks a bunch for this.. this looks like the most logical way forward

      • HeWhoKnows on 07/02/2017 - 22:21
        +1

        This document must be read in its entirety. There are both pros and cons explained for each course of action.

  • sd4f on 07/02/2017 - 13:09

    2.5 months, seriously, maintain the lease and airbnb the joint.

    • congo on 07/02/2017 - 15:43

      Sub letting would be against the contract, but I guess you don't have to tell the agent.

      • HeWhoKnows on 07/02/2017 - 22:22

        Not necessarily. Depends which lines have been crossed out (if any)

    • z0s0 on 08/02/2017 - 10:34

      Exactly; do something which contravenes the term of the lease, inviting them to terminate it. In VIC for example, subletting without written permission gives the landlord the right to terminate the tenancy with 14 days notice. It does not give them any other rights, so it would be an excellent way to recoup your costs or (if the landlord wants) terminate the lease early with no penalty to you.

      Might make getting a reference from them hard, though :-)

  • od810 on 07/02/2017 - 13:40
    +2

    Like someone already mention #1 #4 #5 are pretty standard however #4 should be pro-rata. Usually agents charge landlords letting fees between 1-2 weeks of rent for every time they sign new contract. So you have 2 months left on your contract, it makes no sense to pay the full letting fees. #2 & #3 are just agent trying to make money (although i'm not familiar with WA, i was in Vic and terminated the contract 6 months early)

  • jaimex2 on 07/02/2017 - 14:26
    +5

    Don't waste your time on online forums, give these guys a call (its free): http://www.tenancywa.org.au/

    Also here is a fact sheet on all your options: http://www.tenancywa.org.au/sites/default/files/Version%202%…

    • ak 27 on 07/02/2017 - 16:32
      +1

      Thank you and thank you !! Reading through it now.

    • HeWhoKnows on 07/02/2017 - 18:39

      Mate - you are just a trouble-maker. I hope you get what you deserve when you try this on.

    • bobbified on 07/02/2017 - 18:50
      +2

      Might as well burn the place down - can't pay rent on a home that doesn't exist! haha

      • theguyrules on 08/02/2017 - 10:20
        +2

        Just kill the landlord - can't pay rent to a person that doesn't exist! haha

  • HeWhoKnows on 07/02/2017 - 18:36
    +2

    Your work might reimburse such "relocation" costs.
    They are all valid.
    2 & 3 are a requirement for an end-of-lease inspection. Bond release is subject to a satisfactory inspection. Make sure place is sparkling clean.
    Fees 1 & 4 may be levied in full or pro-rata. This is explained in the Break lease fact Sheet here:
    http://www.tenancywa.org.au/sites/default/files/Version%202%…

    The letting fee (4) is usually only 1 weeks rent + GST. I would definitely query this one.
    The agent must actively seek a new tenant AT THE SAME RENT. You should assist by allowing for inspections as much access as possible. If you feel the agent is not acting promptly or actively seeking a new tenant you might be able to challenge this one.
    IMPORTANT !
    You can also take control by advertising and finding a tenant yourself. This way you avoid most if not all of these charges! This is clearly spelt out in my post below with the relevant forms/docs links

  • HeWhoKnows on 07/02/2017 - 19:01
    +1

    For everyone's information the standard form lease agreement for WA can be found here:
    https://www.commerce.wa.gov.au/sites/default/files/atoms/fil…

    Unfortunately there is no mention of break lease costs

    Also here is a FACT SHEET explaining all aspects of a BREAK LEASE.
    OP should refer to this rather than ask for peoples possibly uninformed opinions.
    http://www.tenancywa.org.au/sites/default/files/Version%202%…

    According to this document Break lease costs may include, but are not necessarily limited to:
    Compensation for loss of rent and
    Advertising costs and
    the cost of tenant database checks and
    Final vacate (Inspection/PCR) fee and
    Reimbursement of unused portion of the re-letting fee.

  • Candour on 07/02/2017 - 21:18

    check if there is a standard lease agreement with the REAWA or the dept of fair trading {NSW}. NSW has a flat 8 week notice clause on their standard lease which agents normally use. the dept in WA shd advise where to look for this and if the agent's lease is valid, and silent it cannot impose arbitrary clauses. I always say join the tenancy union in WA say, and ask them for help.
    they know their way and are on yoru side.

    • HeWhoKnows on 07/02/2017 - 22:25
      +1

      Have you read any of the posts here including mine (above) ????

      • Candour on 10/02/2017 - 22:28

        i read a few and found some general. sorry if I did not read all. I did not see your posts at the time I posted. I am in malaysia at the moment. not sure if my posts get on in real time. If I had seen your post I would not have posted the same vein comments

  • dodgydarji on 08/02/2017 - 09:11
    +3

    So we went through a similar process a couple of years back in Victoria.

    First thing I did was call to clarify with VCAT. As it turned out in my contract I would have had to pay for the rent until someone new was found.

    However an options which is not well know, but also the agency will try deny you is a Lease Transfer. We put our place on gumtree and said there was 3 months left to go on the contract and found someone to transfer the lease over to. I believe the official term is 'Assignment' .. we were lucky enough to find someone and only paid the grand total of $150 to complete the transfer form.

    Amazingly the agency said to me this was NOT an option. If this happen to you please copy and paste the below from the Residential Tenancies Act 1997. I would also be challenging them on any of the extra fee they have dropped in there .. I find when you reference legislation they play ball by saying you will take this case to the Tribunal. Furthermore iterate that this assignment means the assigned tenants take over the current lease. They will try get the new Tennant to sign up to another 12 months which again is not compulsory. They lied a lot to me!! My agency was Hocking Stuart

    Residential Tenancies Act 1997‏

    1. Assignment and sub-letting by a tenant

    (1) A tenant under a tenancy agreement must not assign or sub-let the whole or any part of the rented premises without the landlord's written consent.

    (2) A landlord must not unreasonably withhold consent to the assignment or sub-letting of the whole or any part of the rented premises.

    (3) An assignment or sub-letting of the whole or any part of the rented premises without the landlord's consent is invalid unless the Tribunal has determined that consent is not required.

    If the landlord does unreasonably withhold consent I have been advised to take my case to the Victorian Civil Administrative Tribunal who can grant permission for the assignment.

    1. Tenant may apply to Tribunal

    (1) A tenant may apply to the Tribunal for a determination that the consent of the landlord to the assignment or sub-letting of the whole or any part of the rented premises is not required if—

    (a) the landlord withholds consent; and

    (b) the tenant believes that the withholding of the consent is unreasonable.

    (2) If, after giving each party an opportunity to be heard, the Tribunal determines that consent is not required, the assignment or sub-letting may go ahead without the landlord's consent.

    There is no mention in the act of having to sign a new 12 month lease – furthermore section 5 confirms this according to the tenants union of Victoria.

    • djkelly69 on 08/02/2017 - 23:57
      +1

      The Victorian legislation means nothing in WA…

  • mreddie on 08/02/2017 - 11:04
    -4

    Pay up buttercup

  • stirlo on 08/02/2017 - 12:05
    +3

    Pity you aren't living in the house I just bought :P

  • FirstWizard on 08/02/2017 - 15:42

    Maybe ask a friend to put it on AirBnB for the remaining months :D

  • jlogic on 08/02/2017 - 19:58

    Sounds cheaper just to see it out…

  • OG Puppy Banana on 08/02/2017 - 20:22

    A few of the costs listed are probably a given and to avoid them, you'll have to dedicate a lot of your own time to preventing them.

    Perhaps you should run a cost/benefit with a big emphasis on the cost of your time. You may find out that it's cheaper to simply pay the rest of the lease out and completely minimise any and all possible issues that you may face from a landlord, agency and/or tribunal.

    Given you're moving, it may also be more prudent to simply let the hassle go.

  • shinichiduy on 08/02/2017 - 22:32
    +4

    I have just recently gone through the same thing as you in Victoria with VCAT.

    Basically, BOTH advertising and re-letting fee are to be PRO-RATA, full stop, no BUT, no conditions whatsoever, regardless of what the contract says. The agent was extremely sneaky in demanding us a full amount initially and only backed out to prorata only reletting fee when we pointed out the law to them (i.e. they still demanded the advertising cost to be reimbursed in full, which was held to be wrong by VCAT).

    The amount to be prorata is the amount the landlord PAID to the agent at the beginning of your lease so ask them for the receipts.

    You will have to pay the rent until new tenants are found or until the end of your contract, whichever is sooner. However, note that the landlord will have duty to mitigate their loss so if you don't advertise the property yourself, the landlord will need to do it. If the landlord tries to make it difficult for you (i.e. demanding a new lease, increase the rent…), document it and bring evidence to the tribunal)

    Last note, dont be afraid to go to the tribunal. Our experience was extremely pleasant as the tribunal member handling our case was extremely knowledgeable. We did not need to prove to/convince her any principles.

  • iamapineapple on 09/02/2017 - 08:32
    +2

    I have little knowledge in an area like this, but if you are going to be paying rent until the 6m mark anyway, what is the point of then breaking the lease? Move to your new job, keep paying the lease, and then end the lease when 6m is finished, avoiding costs. Is this a too simplified way of looking at the situation?

  • [Deactivated] on 20/02/2017 - 19:36

    These are not weird fees, if you didn't find a new suitable tenant. If you have not paid them before, heed them. Leases are contracts and not for breaking willy nilly.

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