Agreement for Termination of Fixed Term Tenancy

Every now and then a tenancy is unable to be carried through until the final date as per the signed tenancy agreement.

...now what?
You still have responsibilities as per the tenancy agreement including paying rent until a new renter is found or until the end of the lease agreement, whatever comes first, along with some of the leasing costs. When a renter wants to break a lease there is a process that needs to be followed to reduce their costs. You must advise your intentions in writing with signatures of all parties. You then need to sign the Lease Break assignment form (on the next page). Once this has been returned to our office, we will do everything possible to keep your costs to a minimum.

 

...who is responsible for what?
You are responsible for re-imbursing the owner for charges that they would not expect to have to pay until the end of their agreement.

The renter is responsible for:

● Pro rata of the letting fee (this is individual to each property)
● Rent until the property is re-leased
● Advertising - $350.00 plus GST
● Administration Fee - $55.00 incl GST
● Tenancy checks through national databases - $22.00 on each final applicant inc GST
● Property images - from $55.00 inc GST

 

what is the ‘pro rata leasing fee?
To find a new renter each rental provider is charged a % of the annual rental. This is individual for each property and we will advise of this fee upon request.

For Example: If the renter breaks their 12 month agreement by 6 months, then they would be responsible for reimbursing 1⁄2 of the new leasing fee to the owner. The owner would be responsible for the payment of the remainder of the fee as the renter has used that portion of their agreement.

 

what if the property cannot be re-leased?
The property needs to be advertised as if the owner was leasing the property. So, if the enquiry is low and the rent needs to be lowered, then you need to reimburse the owner the difference in the final rental achieved.

 

what if the owner wants to move in?
The owner would need to release you from your obligation to pay rent, advertising, renter checks and property images. You would still be responsible for paying the pro rata letting fee and rent until you vacate the premises.

 

what if the owner wants to renovate?
As above, the owner would need to release you from your obligation to pay rent until the property is ready to be renovated and vacated the premises. You would still be responsible for a pro rata of the letting fee, advertising, renter checks and property images.

what if the owner wants to put the property to the rental market at a higher rental?
The property has to be advertised at the same rent as your current rent, OR the owner would need to release you from your obligation to pay rent until the property is re-leased. The renter would still be responsible for a pro rata of the letting fee, advertising, renter checks and property images.

 

what if the property is left vacant?
If you have moved out of the property and it is still marketed for new renters, it is the your responsibility to make sure the property is presented the best it can be for
the inspections – this means the power must be left on and the property to be clean and tidy with maintained gardens. The better a property is presented the easier it is to find new renters for.

I/We acknowledge that in accordance with the provisions of the Act, we are liable to reimburse the rental provider for any fees, costs and charges incurred with the assignment of the lease and agree to the following terms;

a) pay the rent and continue to fulfil our obligations under the current tenancy agreement until a replacement renter commences tenancy under a new tenancy agreement with the rental provider for the premises, such agreement being for at least the term of the outstanding portion of the current fixed term tenancy agreement

b) inspections, at reasonable times, by prospective renters in the presence of an agent or agents’ representative

c) pay all amounts owing under this agreement within 7 days of receipt of the invoice

d) where a new renter is found, who wishes to enter into a tenancy agreement which is for a term that is shorter than the term of the outstanding portion of the current fixed term tenancy agreement, the rental provider orrental provider’s agent may negotiate a mutually agreeable compensation from the existing renters or waive further rent obligations under the current fixed term tenancy agreement

e) the parties agree that from the commencement of a new tenancy agreement, the renters will, subject to the requirements of the Residential Tenancies’ Act 1997, and any outstanding obligations under the current fixed term tenancy agreement and this agreement, be released from all its obligations in relation to the current fixed term tenancy agreement.

f) the agent remains the agent for the lessor.

g) by signing this agreement all parties agree to having given prior approval, in accordance with the Electronic Transactions Act, for electronic transmission of the agreement and any other related agreements for signing purposes or otherwise, by such means of communication as have been indicated in the item Schedule of this
document.

EXPENSES:
(note: the renters will be required to pay for expenses incurred as listed. The amounts listed are the MAXIMUM the renters will be required to reimburse to the rental provider/ rental provider’s agent. Letting fees will be calculated pro-rata once a new renter is secured).

Advertising	For Lease sign (if applicable) Website Advertising	$350.00 plus GST
Administration Costs	Administration fee to prepare paperwork	$55.00
Compensation to Landlord (for fees incurred)	Letting Fee	$pro-rata calculated
Entry Condition Report & Photos	Update ECR & Photos	$55.00
Tenancy Checks	Reference Checks through Veda Australia P/L	$16.50pp

 

I/We acknowledge that we are fully aware that if we do not agree to the payment of such fees and charges from the security bond paid by us, the rental provider is entitled to make a claim through the Victorian Civil and Administrative Tribunal (VCAT) to enforce payment; and we therefore agree to the agent retaining, such fees and charges as listed above from my/our security bond.

 

We acknowledge having received a copy of this agreement at the time of signing.