Hi
A friend of mine has just broken their lease to move into a PPOR. The agent has advertised the place at a higher rent, it was already a very expensive apartment, lots of viewings but no takers so far. My question is, is the agent taking the piss looking for over market rent while they have continued guaranteed rental income? Are they aloud to do this? Property is in Qld.
Thanks
S
Hi Simon,
looking for over market rent while they have continued guaranteed rental income?
By that, I presume you mean that your friend is bound to pay rent in lieu of the broken lease? i.e. they are “in the gun” for rent until it is leased anew to another tenant.
At first glance, and in my opinion, this wouldn’t pass the “pub test” (or the “reasonable man test”). I would have thought the agent must make every endeavour to “replace” the rent, but not to exceed it, thus perhaps making re-renting more difficult because of the higher rate.
Wait up though – if that rental uplift is minor (a few %), this could be understandable. e.g. If the lease your friend had first signed was about to expire anyway, then uplifting the rent by a small amount would make sense – otherwise they are locking in “last year’s rent rate” for a further year with a new tenant. But if the uplift is excessive, then I would think your friend might have grounds to oppose what the agent is doing.
Good question, and I too would love to hear what others think of this – maybe some have “been there, done that” and can add more,
Benny
Hi Benny
By that, I presume you mean that your friend is bound to pay rent in lieu of the broken lease? i.e. they are “in the gun” for rent until it is leased anew to another tenant
Correct.
Wait up though – if that rental uplift is minor (a few %), this could be understandable. e.g. If the lease your friend had first signed was about to expire anyway, then uplifting the rent by a small amount would make sense – otherwise they are locking in “last year’s rent rate” for a further year with a new tenant. But if the uplift is excessive, then I would think your friend might have grounds to oppose what the agent is doing.
They have been living in the property four months of a six month lease in a brand new 3 bed apartment (small block) in Southport paying $620pw. My opinion, it is an expensive average apartment. The agent put it on the market at $650pw once notice was given three weeks ago. There is a lot of interest but no one is signing at that price. It has just been doped back down to $620.
Perhaps the moral of the story is don’t break your lease? Do agents use situations like this to test the waters for rent increases when the is no loss of rental income?
Thanks
S
Simon,
so the contract is king! also there are legal ways to end leases early, although I am not suggesting anything at all and you can read them on QLD.gov.
https://www.rta.qld.gov.au/Renting/Ending-a-tenancySo there are generally clauses in a QLD rental agreement and on top of that landlord insurance would of covered the owners if they put it in place.
But first and last point, dont break leases and if you have to, midigate the risk, they could of advertised it or done a few things to try get out. but sounds like it resolved itself.
Kind regards
Jaxon Avery
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
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