5 Months in to 12 Month Lease and Want to Break It - Should I Ask LJ Hooker About Fees?

nickyd84 on 14/02/2017 - 22:22
Last edited 15/02/2017 - 10:49 by 1 other user

Hi,

We've been renting here for a few years (Sydney) and have found somewhere we would like to buy. Trouble is, we still have 6.5 months left on a 12 month lease! In the contract it states various fees:

Advertising Fee
Rent until tenant found etc.

My question is, do you think it's risky being upfront with the agent and asking what the potential costs might be? We're concerned they may see alarm bells and somehow make life difficult for us if we intend to stay. We certainly don't want a black mark against our name or double paying for too long!! We're in Surry Hills and I don't think it would take long to fill this apartment, but it's risky…

Keen to hear your thoughts

Cheers

Poll Options

• 21
  Ask them upfront and be honest
• 0
  Don't ask them, that would be stupid.

• 

  HardQuiz on 14/02/2017 - 22:39

  Surry Hills will get rented easily.

  Probably one week $$ for advertising and hopefully a new tenant moves in within 1-2 week.

  The real problem is REA who are lazy and unmotivated.

  • 

    nickyd84 on 15/02/2017 - 10:10

    Yeah we don't think it would be long on the market. I did read on fair trading that if they aren't trying hard enough to lease your place then you can follow up, tribunal etc. That sounds like a lot of time and effort thought! Thanks for your reply

• 

  vinni9284 on 14/02/2017 - 22:43

  Have you purchased the property yet or are you going through the purchase? If not then buying a house can take a while and even after a purchase there is usually a 30 settlement hence more delays. I broke a lease many years ago and the Landlord was OK with it. I cannot remember how much I had to pay for re-advertisement etc however I felt good as I did the right thing.

  There was a cost however a contract is a contract and the landlord is also paying for his/her mortgage of the property. Normally, a background history of a previous tenant goes into a registry and future landlords can do a search if they wish.

  Here is a link:

  http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…

  I would do the right thing.

  Good luck.

  Cheers

  • 

    nickyd84 on 15/02/2017 - 10:13

    No expression of interest closes in 3 weeks, it's our first purchase so unaware of the timeline so thanks for that. Sounds like it could be inn to mid April by the time all is complete and we'd look to move.

    We've never skipped a beat in rental payments etc and have always had perfect condition reports etc, I would hope that would outweigh a strategic lease break (rather than being evicted or a short notice dash and run)

    Thanks for your input, much appreciated

    • 

      vinni9284 on 15/02/2017 - 10:32

      +1

      You're welcome.

      As you're at your expression of interest stage, therefore it is not definitive that you are purchasing the property.

      Therefore, when everything is 100% concrete (that is the vendor has accepted your offer in writing and the bank has formally approved your loan in writing), then you can get an approximate forecast of when you can move into your new property.

      After all this occurs then it will be a good time to inform your current agent to notify of intent to vacate/break your lease imo.

      Ensure you have all the bases covered first.

      The worst thing is to notify the landlord of intent and then it all this falls through … then you'll be left to rent out another place and more stuffing around.

      Cheers

      • 

        nickyd84 on 15/02/2017 - 16:12

        Yeah I need to research the whole process and each step. We're just looking at pre-approval now, so won't be confirming anything for a while! We'd want to give them a month notice too, I think that's fair. Would that fit in a typical time line?

        So you'd suggest against the floating of the 'idea' to the agent? I'm thinking of an email along the lines of 'so we're looking at buying this year, we would just like a breakdown of potential costs and are they negotiable, just incase we find our dream place prior to end of lease'… We've been good tenants, I'd like to think we could discuss it. What do you think?

      • 

        vinni9284 on 15/02/2017 - 18:37

        @nickyd84:

        OK. It seems that you're at the early stages of looking for a house.

        There are many many many … yes .. many planning/researching steps that you have to undertake first before throwing in a deal to buy a home. You don't just walk in to a Home and just buy it (unless you have done extensive research of the area, finances etc) …

        Google is your friend for FAQ's.

        To answer your question, in my view I would not mention anything to the agent as your are at very early stages now.

        Going by your first thread, I thought that you were just about to make an offer and seal the deal however your are at the start. (Good luck :-))

        This is what I would do (not in sequence and may not be complete) however its an overview:

        • Know how much you can borrow first.
        • Find a location and place that you can afford.
        • Research location, street, crime rate, future expansions in the next Ten years (Yes, even fully established areas can be acquired by the government, have a new flight path were a 787 will rattle your roof hence your house price will plummet … a new Prison can be erected - Like in Werribee Vic)
        • Find a house that you like.
        • See if you can get a pest and building inspection prior.
        • Make an offer (if not yet in Auction) and ensure everything is in writing (accepted by the Vendor and finance from the bank)
        • Negotiate a settlement period with your vendor (e.g 90 days) hence creating a lead time/buffer that suits you to get out of the lease without any (or very minimal)costs.
        • Notify agent of intention to leave.
        • Enjoy your new home :-)

        Buying the right house is your utmost priority. Second is your lease.
        If you have achieved that then what is a few hundred bucks to get out of the lease :-)

        Don't let your lease control your purchase.
        If you do the right thing then you'll have nothing to worry about.

        Correct timing/alignment is the essence.

        It may take you a year …

        Cheers

• 

  hell0 on 14/02/2017 - 23:12

  +1

  Happy Valentines day to you, first of all.

  Next, the fees will be pro-rata, so 6 months into a 12 month contract = 50% of the fees.

  Your option, as I have done once before is to tell agency you will pay for 2 weeks free rent, as moving is expensive and people will get on board to save even bigger start-up fees.

  Vinni also makes a very good point. Thanks vinni. Happy Valentines Day to you, too!

  • 

    vinni9284 on 15/02/2017 - 07:46

    @ hell0

    Thank you very much for your kind wishes!
    I hope you have had a great Valentines day.

    Cheers

  • 

    nickyd84 on 15/02/2017 - 10:15

    Thanks, we are willing to pay what is reasonable, even the 4 weeks bond is something we could forefit, I'm just really scared at the though of paying double rent/mortgage for an extended period of time! I did read the advertising fees would be pro rata, they shouldnt be too much :) Cheers

    • 

      hell0 on 15/02/2017 - 10:33

      I think if you tell the agent to do this, or even 2 weeks… I think you will be very very surprised and people who want to move will be keen for this property as most people live week-to-week, so paying one month rent & one month bond up front is a huuuge deal.

• 

  xssive on 14/02/2017 - 23:19

  Check inbox

  • 

    hell0 on 15/02/2017 - 09:49

    …nothing there…

• 

  bobbified on 14/02/2017 - 23:22

  +1

  Whatever the fees/costs are to break the lease, it's going to be peanuts compared to what you're spending on your new home.
  When you negotiate on the place you intend to buy, factor those costs and negotiate harder to try cover it.

  If you wait, the price of a similar home to purchase in 6.5months time might be more than those termination costs. Or the amount of time you spend looking for a place to buy at the end of the lease could be months! which would see you renting even longer.

  I say, if you've really found the right place, go for it!

  BTW, 5.5 months ago, the thought of buying didn't cross your mind?

  • 

    nickyd84 on 15/02/2017 - 10:18

    Some good advice there, and that first line echoes my thoughts. In the grand scheme it's minimal, however if it drags on for a month or two then that's a pretty hefty weekly price. I agree that in 6 months time the property may appreciate a few $1000, which indeed would negate the loss incurred breaking lease…

    In October when we signed we knew we'd be looking this year, we just started going to viewings to get a feel and found an awesome opportunity! We were supposed to get serious Aug/Sept time, where at least we knew if we broke lease the costs would be capped at 1-2 months. Plans rarely work out in reality hey (or should I say, realty!)

    Appreciate the comments, cheers!

• 

  ms_caz on 15/02/2017 - 17:21

  So - you haven't yet made an offer on the property? Even if you did that tomorrow, you could look at a 90 day settlement (3 months) and only have to worry about breaking your contract for the remaining 3 months. On top of that, even if you are at the purchase stage now, you will still have a few weeks of back and forward before you get to the final signing of the contract - so i think you will have very little of the contract to actually break.