Complications around a lease break – VIC

Hi,

First time poster long time lurker. Am wondering if anyone can help me with a dilemma here.

My wife and I have a house in Melbourne we rent out as I relocated to Sydney for work. We had tenants in the property who were on a 12 month lease than expired 30 June 2011.

In April I asked the agent to speak to them about renewing the lease. It was at the time $420. I wanted to put the rent up to $440 to cover higher mortgage costs plus in the prior year I had incurred around $1300 in maintenance costs (higher than expected).

Before he had the chance to ask the tenants informed him they were pregnant and expecting a baby within 4 weeks so had secured another property and would be leaving the house in early May. On May 1 they paid the May rent and vacated the second weekend in May. They signed an acknowledgment of lease break and committed to paying the June rent if required.

From the week the house was vacated the PM advertised the house and has had weekly inspections. So far as at June 10 the property is vacant. Last week I placed the requested rent down to $420. According to the PM the place is immaculate with no damage and the only reason he says the house is unfilled is due to a 'cool' market in Melbourne right now.

I was told today by the PM that the tenants (well – ex tenants but current leaseholders) have refused point blank to pay the June rent and have said we have 'dtragged out heels' finding another tenant and they shouldn't have to pay for this. On top of this they are a 'new family' and we were told that going to tribunal to get the June rent would make us look bad as we'd be taking a 'battling family' to tribunal unfairly.

What's more, the agent has told us we should roll over as we could lose at tribunal due to sympathy issues – despite the fact we have technically not done one thing wrong in this whole instance. For me, I am staring down the barrel of losing $1800 and I'm not in a position where absorbing that is something I can do with a straight face.

Should I take the PM's advice and not take this to Tribunal and just cop the rental loss? The tenants chose to vacate of their own will – they signed a 12 month lease and at no time once they knew they were pregnant did they try and find a way to break lease but also not disadvantage us. We were flexible with them – they had a cat they failed to inform us about when signing the lease and we were fine with that. Every maintenance request they made we fixed within 48 hours of the PM asking for approval. I honestly felt we were good landlords.

Any help would be appreciated. My wife isn't keen on the stress of tribunal but at the same time I'm not keen on the stress of losing $1800.

Thanks, Ben