Forums / Property Investing / General Property / Advice on tenant breaking fixed term rental contract

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  • Profile photo of rickylim33rickylim33
    Participant
    @rickylim33
    Join Date: 2010
    Post Count: 3

    Hallo all,

    Just want to know your thoughts. If a tenant has broken a 1 year fixed term contract, leaving in less than 5 months, stating she has medical reason, hence she has to quit her job and relocate back to Melbourne to be closer to family. She also state that is experiencing extreme financial difficulties and have been struggling for some time.

    Instead of continuing to pay us rent until we find a replacement tenant, she has offered to pay us one payment of $400 for the next few fortnights rather than the agreed $480 per week. She moved out on Sunday 30th June, and a fortnight rental payment was suppose to be due on tonight, and payment has not come through.

    She also couldn't pay for the readvertising costs, and asked us to pay upfront, which we did.

    She apologised for the impact this has caused us, and have tried to seek alternatives to assist with payments, but state that there is nothing else she can further do.

    In the situation above, what would you do? The apartment is currently vacant, and one month prior to her leaving, we commenced advertising and open the apartment twice a week (mid week and weekend), and there has been no one turning up. The asking rent is also advertised for less than what she is currently paying. It seems there it is a quiet time for fully furnished rentals at the moment.

    Your thoughts/suggestion would be greatly appreciated.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    What state is the property in?  Is there a rental agreement?  Do you have landlord insurance that covers rental default?  Did you take a bond on the property?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of rickylim33rickylim33
    Participant
    @rickylim33
    Join Date: 2010
    Post Count: 3

    The property is in Canberra. Yes, we do have a signed tenancy agreement in place. Unfortunately, we don't have landlord insurance on this investment. Yes, we have lodged the bond with the rental boards.

    Profile photo of jenni_nextplace.com.aujenni_nextplace.com.au
    Member
    @jenni_nextplace.com.au
    Join Date: 2013
    Post Count: 36

    If it went to court she has set herself up with the hardship claim and most likely the courts will allow her out of the lease. You also probably don't want to go through the drama of the court process.

    It sounds like she has done the right thing and left the property ready to re-let again. I think take her offer is all you can do, cut your losses and move on. 

    Landlord insurance from now on in though. LOL 

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Agreed. The courts won't worry about your mortgage hardship. This is why you need landlord insurance.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

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