I recently had an interesting scenario which took me through the realities of tenants and contracts, as well as landlord’s insurance.

One of my tenants broke lease on the basis of “hardship” due to the loss of a job.  He had been a pretty average tenant in terms of payment, but nevertheless with 2 weeks notice, I was still looking at some rent downtime which I was hoping to minimise.

First, I had a good luck at my landlord’s insurance.  Mmmm, only covers you in a break of lease situation after the first 4 weeks of being empty and does not include the rental agent fee for releasing.  They also need evidence that sufficient action has been taken to try and get the tenant to pay and secure a new tenanat.  So not too much help in this situation.

So, time to try and get the tenant to pay out the rest of his lease or at least until  a new tenant was secured.

Tenant goes legal and says he is not going to pay.

Next step is a mediation point prior to going to tribunal, at which point it could go either way.  Interestingly, the court can rule in favour of the tenant in the event of hardship…

Eventually I go with a compromise agreement to avoid going to court and end up keeping the bond which gives me a  net loss of 2 weeks rent.  I also negotiated with the rental agent to forego their rental lease fee as there were issues in the way they handled the breaking of lease.

So, there you go.  A few tips and insights if you find yourself in the situation of a tenant breaking lease.

Mark