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Moving Overseas - Breaking Rental Agreement?

Discussion in 'Property Law Forum' started by Maggie52, 28 July 2014.

  1. Maggie52

    Maggie52 Member

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    Hi, I'm hoping to get some help. Our current lease is until April 2015. My husband is being relocated to the USA for work and we are moving in August. We gave our letting agency 4+ week's notice that we would be leaving and have put a lot of effort into trying to find new tenants, but with no luck. We cannot afford to continue to pay rent here until the end of our tenancy agreement, as well as paying rent overseas and with only 1 income as I won't be working initially.

    I hate asking this, but I'd like to know what legal authority our current letting agents/landlord has to obtain payment from us once we leave Australia? Neither of us are Australian citizens, and we won't have any assets here. I know we will likely be listed on the tenancy database which could make it hard to rent in the future should we return to Australia.

    Thanks.
     
  2. AnnaLJ

    AnnaLJ Well-Known Member

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    Hi Maggie

    If I can just take it a step back first, does this mean the agent/landlord is not allowing you to break your lease?

    Before you look into the potential of leaving the country while still in a contract with the landlord and risking potential future legal action or a strike against your name, I wanted to double check you have thoroughly discussed a lease break with your agent?

    While on one hand, the lease does constitute a contract for which you have payment and other obligations up until expiry, it would very much surprise me if the agent were not willing to work with you to negotiate terms of a lease break. I would suggest going back to them again and discussing, offering to pay for the advertising for a new tenant and an agreed notice period (even increasing it to 8 weeks' notice) and seeing if you can reach a resolution there.

    You should be aware though, that if the agent can't lease the property for what you have been paying then you may legally be required to pay the shortfall. Regardless, I would see this as a better option over just leaving the country and having to potentially face consequences upon your return.

    For what it's worth, I have broken several leases before and all I was ever required was to give 2 months' notice and pay their advertising fees.

    Best of luck!
     
  3. Maggie52

    Maggie52 Member

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    Hi Anna, thanks for your reply.

    We gave the agent notice 4 weeks ago that we would need to break our lease due to needing to move overseas. We then offered our bond as payment for breaking our lease (equivalent to a month's rent) which would take the notice to 8 weeks but they declined, saying we would be required to pay the remainder of the lease (8 months) or until they find new tenants. I don't have faith that they will continue to try and get new tenants in if we leave and keep paying rent, because their support has been lackluster to say the least throughout our tenancy. I understand we are required to pay advertising and re-leasing costs and that's fine. They're not willing to negotiate the lease break, which is why I'm considering this option and wanted to know the potential legal ramifications.


     
  4. AnnaLJ

    AnnaLJ Well-Known Member

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    Hi Maggie

    Okay I completely understand and that's disappointing that they weren't willing to agree to the lease break! In consideration of that, your obligations under the lease do continue for the duration of the lease term.

    Depending on the state you reside in, the landlord will still have a right to claim the unpaid debt (ie unpaid rent for the remainder of the lease term) for 6 years from the date you miss your first rental payment. The landlord is statute barred from claiming the debt once the 6 years has passed (unless a court judgement is handed down in his/her favour but that's a separate matter).

    So, unless you plan on staying out of the country for more than 6 years then I don't see that there are many avenues for escaping payment of the rent unfortunately.

    On a more pragmatic level, I would continue to seek out a new tenant and even be prepared to offer the lease at a reduced rent to try to secure someone. You would then need to either assign the lease to them (with the landlord's approval of tenant) or (if you cannot get approval) you could sub-lease to the new tenant. Subletting is not always allowed under leases, so I would check the terms of your lease. Also, generally, if you sub-lease you continue to be responsible for the obligations under the lease until it expires. In other words, if the new tenant defaults on their rental payments or damages the property then you are ultimately responsible to the landlord.

    Another avenue you could try, is calling the rental tenancies authority or consumer affairs in your state. They may have a suggestion I have not thought of.

    Best of luck and keep us all posted with how you go!
     

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