As a property investor, understanding the intricacies of tenancy agreements is crucial to maintaining a successful and compliant rental property. One aspect that often requires careful consideration is the termination of fixed-term tenancies. While these agreements provide stability for both property owners and tenants, unexpected circumstances may arise, necessitating a need for flexibility. Here's a short guide on breaking a tenancy agreement, whether initiated by the property owner or the tenant.
Property Owner-Initiated Termination: Approaching Undue Hardship
Fixed-term tenancies are legally binding contracts that typically cannot be terminated before the agreed-upon end date without mutual consent or a court order. However, life is unpredictable, and situations may arise where a property owner faces undue hardship, such as the death of a partner, serious illness, or redundancy.
In such cases, property owners are advised to approach the tenant and discuss the possibility of ending the tenancy earlier. This conversation should involve a transparent discussion of the property owner's circumstances and a proposal for compensation, such as covering relocation costs, connection charges, or other agreed-upon forms of support.
If the tenant does not agree, property owners can seek a court order to end the tenancy agreement, provided they can demonstrate undue hardship. It's important to note that attempting to force a tenant out unlawfully or changing locks without a court order is strictly prohibited and can result in severe penalties.
Tenant-Initiated Termination: Navigating Unforeseen Circumstances
Tenants may find themselves in situations where breaking a fixed-term tenancy agreement becomes necessary due to unforeseen circumstances such as job relocation, redundancy, or personal or family illness.
Should you wish to break your lease agreement, you should notify the lessor/agent you want to break lease in writing, as soon as possible. However, it is important to note that the lessor is not obligated to agree to you ending the tenancy early.
Besides lost rent, the lessor may incur some costs as a result of you breaking lease which may include but not be limited to the cost of advertising the property. You can be asked to pay these costs. Subject to the lessor/agent agreeing to a break lease, the lessor must do what they can to reduce their costs, including advertising the property quickly.
Property Owner Compliance and Tenant Rights
Property investors should always adhere to the terms of the tenancy agreement. Failing to meet obligations or refusing to address issues may empower the tenant to seek a court order to end the fixed-term agreement. Property owners should be aware that tenants affected by family and domestic violence have special provisions, allowing them to give at least seven days' notice and vacate immediately.
Navigating fixed-term tenancies doesn't have to be a daunting task. Whether you're a seasoned property investor or a new entrant to the real estate market, understanding the legal nuances of tenancy agreements is key to a successful rental experience. As the success of your investment will often sit at the feet of an agent; choosing the right agent is critical to you. Want to know how we approach property management? Then call us now (08 9144 2200).