Jump to content

Terminating Lease / Landlords Insurance
ACT


  • Please log in to reply
16 replies to this topic

#1 whoisme

Posted 07 January 2013 - 09:34 AM

Hi,

Just wondering why a tenant would be responsible for rent up until such time a new tenant is found when Landlords have insurance to cover unpaid rent?

I am a tenant and a landlord (although just recently) and am in a position where we would like to break our lease to move to a much more affordable rental property (we have 6 months left of lease) the reason being when we had to relocate interstate this house was the only available/suitable one at $$$$$ above what we wanted/afford to pay.  

We would be able to give 3-4 weeks notice though and from my perspective as a landlord it got me thinking that what would the problem be if the tenant breaks the lease when you could claim on insurance for loss of rent????? Please tell me what I am missing, are there certain rules to claiming insurance, I know there was tenant hardship, tenant health problems etc and we are about to come under the tenant hardship bit.

Thanks.

#2 Fossy

Posted 07 January 2013 - 09:40 AM

Because then the landlord would have to go through the hassle of making the claim and then be financially disadvantaged by the increased premiums they'd be forced to pay in the future....?

Also as a tenant, it would whack a big fat 'do not rent to me' sticker on your rental history.

Edited by Fossy, 07 January 2013 - 09:41 AM.


#3 elizabethany

Posted 07 January 2013 - 09:47 AM

It is failry standard to have to pay until a new tenant is found.  However, so long as you are willing to have open homes in the notice period, the chances are that the rental will be filled, as there is a rental shortage in the ACT.  Also, you may be able to find tenants to apply, which may mean that it gets filled by the time you leave.

#4 Grrrumbles

Posted 07 January 2013 - 09:51 AM

Hi,
As a landlord in the ACT who had a tenant break a lease this year I think you are underestimating the impact of your plan on your landlord. I own one investment property, have a mortgage on my home and work part time.
When my tenant broke her lease it was a difficult time to find a new tenant so I was stuck paying all the expenses without any income to cover it. I took my tenant to the tribunal, you can't just claim on insurance without trying to get the money from the tenant.

#5 Ninja Lemur

Posted 07 January 2013 - 09:56 AM

You are assuming all landlords have such insurance.  Many don't.  With multiple properties for example it makes little financial sense.

#6 BJBubbles

Posted 07 January 2013 - 10:04 AM

I think it's mostly you have entered into a contract stating you will pay so much per week for a certain amount of time.  You are now dishonouring the contract by breaking the lease.  Why should it be on the landlord to do anything about this when it is you that is breaking the contract?    What would be the point of any contract if one party could just "claim it on insurance" if/when the contract was broken?

Also, pretty sure the terms for breaking the lease are actually IN the lease, so you have already agreed to them!

We've broken a lease before because we were moving interstate. We did all we could to accomodate the REA for open for inspections etc to get a new tenant in.  It cost us a weeks rent for advertising etc (as stipulated in the lease) and that was it because a new tenant was found and moved in the day after we moved out.

#7 whoisme

Posted 07 January 2013 - 10:06 AM

A landlord would be very negligent NOT to have Landlords Insurance.

We had no option but to take this rental property at a much higher cost in order to relocate here for my husbands work.  It is costing us over $200 per week than we can afford and to the point I'd rather advise the landlord now of us nearing financial hardship and being unable to pay the rent than waiting for that time to come.

We are also paying our own mortgage.

I just feel it is fair to advise the landlord now before it gets to the stage of not making the rental payments.



#8 Bluenomi

Posted 07 January 2013 - 10:06 AM

You only have to pay rent if they try to get new tenants and fail. If they decide to renovate thereby taking the place off the market or jack the price up way above market rent and fail to get tenants, you don't have to pay.

Be very careful, I've had real estate agents lie to me trying to get me to pay for rent after I left claming the owners couldn't get new tenants when really they hadn't even tried to get replacments.

#9 Grrrumbles

Posted 07 January 2013 - 10:19 AM

Just to note that there are many components to landlords insurance. Most will have coverage for fire and other damage but not all landlords will have coverage for rental defaults. You may not be able to get another landlord to rent to you if you declare financial distress to get out of a lease.

#10 whoisme

Posted 07 January 2013 - 10:23 AM

Grrrumbles, I was under the impression that Landlords Insurance was total coverage for everything.  Maybe it differs state to state as the insurance for my property in Queensland is total coverage damage, loss of rent etc.

Bluenomi that is also another worry for me, that the house we are renting is about $50 - $100 above market rent compared to similar homes in the area.

#11 InsertAwesomeHere

Posted 07 January 2013 - 10:29 AM

It can also add costs when trying to find a new tenant.

Agree with PP's though, they have to reasonably try to find someone and they can't just decline reasonable applications which would end up in you needing to pay anyway.

They have to advertise and look and accept reasonable applications.

Which state are you in as it varies slightly state to state.

www.tenants.org.au is a good site if you are in NSW for info.

#12 Grrrumbles

Posted 07 January 2013 - 10:30 AM

I can only go on my experience in the ACT but I use a broker and I have a policy that covers for damage and not defaults. I imagine this would be quite common as I have some understanding of the law and the need to mitigate your losses before claiming insurance means that in most cases legal action would be taken before an insurance claim would be paid.

#13 Ninja Lemur

Posted 07 January 2013 - 10:32 AM

whoisme I think that if you can't afford to continue to pay the rent and you think they would fail to rent at the rate you are currently paying I would go to the agent and sit down and have a talk.  And asap so that they can advertise sooner rather than later.

Has your financial situation changed from when you applied for your property?  At that time you would have to have proved ability to pay?



#14 JECJEC

Posted 07 January 2013 - 10:34 AM

QUOTE (whoisme @ 07/01/2013, 10:34 AM) <{POST_SNAPBACK}>
Just wondering why a tenant would be responsible for rent up until such time a new tenant is found when Landlords have insurance to cover unpaid rent?


Because a tenant signed a contract.

You will find that the insurance company would pursue the tenants for the loss of rent anyway so the tenants would be required to cover it either way.

Edited by JECJEC, 07 January 2013 - 10:35 AM.


#15 whoisme

Posted 07 January 2013 - 10:40 AM

QUOTE
amoral lemur Posted Today, 11:32 AM
  whoisme I think that if you can't afford to continue to pay the rent and you think they would fail to rent at the rate you are currently paying I would go to the agent and sit down and have a talk. And asap so that they can advertise sooner rather than later.

Has your financial situation changed from when you applied for your property? At that time you would have to have proved ability to pay?


What is making it difficult to stay and be able to pay the rent is that prior to myself and the kids moving down we had to pay for accommodation for my husband in a serviced apartment (for 2 months) and this ate up all our savings and then the money earned for the last 5 months has paid for the cost of relocating and the gap to meet our mortgage repayments.

In no way do I want to be unfair to the Landlord which is why I am well aware of future financial situation to give the Landlord as much time as possible without tarnishing our own selves for the next rental, previously to this rental we lived in our own home for 3 years so have no rental history.

#16 M1B2G

Posted 07 January 2013 - 10:42 AM

So a landlord should have to go through a claim because a tenant cannot make their part of the signed agreement.

I am sure if you have had any dealings with an insurance claim you will know that they will always easily pay out on a claim and of course they won't jack up the premiums..

A tenant signs a lease and they should be responsible for paying rent until an alternative tenant can be found.  There is also the fact that landlords have to pay our property managers additional letting fees and inspection fees when reletting a property...

I have investment properties and I rent at the moment.  The one time I have tried to claim for loss of rent because my outgoing tenants absolutely trashed the place and I had to repair it the insurance company I had made it difficult.  I have now changed companies because it was ridiculous but did not have the time to fight the insurance agency which I know I should have...

#17 LittleMissPink

Posted 07 January 2013 - 04:59 PM

Isnt there a break lease fee now? 6 weeks if lease is less than 50% served, 4 weeks if over 50% lease served.

Thats what it says on my lease




1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users

 

Teaching our son to say no to violence against women

Today, on White Ribbon Day - and every other day - we're teaching our son to say no to violence against women.

Mothers told to breastfeed in 'spacious' toilet

If there is one thing the owners of Tillings Cafe can be certain of, it is that the eatery won't win the award for Britain's best baby-friendly coffee shop any time soon.

Mother gives name to son dumped down drain

A woman who admitted to dumping her newborn baby down a Sydney drain has reportedly been allowed to give him a name.

Taking small steps to reduce stress

Are you feeling used up by life's stress, family problems and a demanding job you can't turn off? Many people are way beyond work-life exhaustion. They are functioning as robots.

Bad news: we're running out of chocolate

The world's biggest chocolate-maker says we're running out of chocolate.

Born at 23 weeks, 'Chopstick Baby' survives first week

A baby who was born at 23 weeks has survived her first week of life outside the womb.

Manic stations: the nesting instinct in pregnancy

It might sound like temporary insanity, but almost obsessive nesting as you near your due date isn’t uncommon – even if you’re not usually a particularly clean person.

How a baby can survive alone for days on end

The baby found abandoned in a Sydney drain may have been alone for up to six days without being fed, leaving many asking how he could have survived.

When it begins to look a lot like Christmas

A child's excitement at Christmas time is a beautiful thing, but one dad ponders whether his toddler daughter is getting into the festive mood a bit too soon.

Hospital lets dads the experience some of the pain of childbirth

A new experience is radically altering men's views of childbirth.

Italian doctors questioned over formula bribes

Italian police have placed 12 doctors under house arrest on suspicion of promoting baby milk formula over breastfeeding.

Heartwarming prank gives single mum the house she was hired to clean

Cara Simmons arrived at work to clean a large and beautiful house in time for a party planned for that evening. It was soon hers.

Those special moments of sibling bonding

Every now and then your child does or says something that is truly memorable.

Why we should stop telling new parents to 'enjoy every moment'

A few weeks ago, some dear friends of mine had their first baby. As the proud dad texted me a picture I had to fight the natural instinct to say “Enjoy every moment!”

Baby monitor footage posted online

Footage of Australian babies and children sleeping in their bedrooms are among the images on a Russian site showing live feeds from thousands of homes and businesses around the world.

Did this new dad really hit on his wife's midwife?

Was there really a man who was actually there by his wife’s side as she laboured and gave birth to his child, all while he was making what he perceived to be meaningful eye contact with a midwife?

Keep calm and ignore the Tantrum Trolls

Tantrum Trolls are a small but growing species of predatory bottom-feeders who delight in picking on parents at their most vulnerable.

It's okay to never 'get over' the death of a loved one

The death of children, siblings, and parents has long term impacts on the rest of our lives.

What Mark Latham needs to know about depression and motherhood

Love has nothing to do with mental illness. But love may drive a mother to do something about it.

'We're just trying to keep our child alive': life with FPIES

We have a beautiful seven-month-old son, and his allergy rules our life.

Transgender dad breastfeeds his babies

A transgender man who breastfed his first baby - despite having his breasts removed as part of his transformation from female to male - has now had a second child.

Couple face $1 million medical bill and bankruptcy after babymoon birth

A Canadian couple were slammed with a million dollar medical bill after their daughter was prematurely during their babymoon.

Cigarettes, junk food dominate supermarket sales growth

One in every five dollars spent at supermarkets goes on cigarettes or junk food, according to industry data.

Teacher under fire for breastfeeding in class

There is no doubt mums have a right to continue breastfeeding after they have returned to work, but one teacher in the US has taken it to the extreme.

Win a family pass to Disney Live!

We have 4 family passes to give away to see Disney Live! presents Three Classic Fairy Tales, touring Australia this December/January.

Download now: Essential Kids Activity Finder app

Got bored kids? Quickly find the best activities for kids wherever you are in Australia with the Essential Kids app.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

Join PADDINGTON on the red carpet!

To celebrate the release of PADDINGTON, we are giving five lucky winners the chance to win a family pass to the exclusive Australian Premiere in Sydney on December 7!

The tragedy of losing a favourite teddy bear

We were green and uninitiated, perhaps a little naïve when it came to the favourite toy responsibility.

Video: Baby sniffs beardless dad to make sure it's him

She looks him up and down and then touches his chin, but baby Lindsey still isn't sure this clean-shaven man is her dad.

It's possible to workout while pregnant

Medical experts say intense fitness routines can be done safely during pregnancy - if the mums-to-be follow some guidelines.

What parents really want for their kids

Are our hopes, dreams and expectations for our children what they really need?

'I had a feeling something was seriously wrong'

Before even giving birth, Katie Myers' maternal instincts warned her something was wrong with her baby.

When your pregnancy causes a relationship rift

Some dads-to-be don't miss a beat when their partner is pregnant; others struggle with a range of issues and can become withdrawn, right when their support is needed most.

Couple uses group photo trick to announce pregnancy to loved ones

Katharine and Kris Camilli devised a clever trick to immortalise their family and friends' reactions to their exciting pregnancy news.

Why Tracey Spicer has given up make-up

"After 30 years on television, I had become what I despised: a painted doll who spent an hour a day and close to $200 a week putting on a mask."

Knowing you are one of the lucky ones

I am secure, confident and strong, but the responsibility of protecting my children can almost bring me undone.

Why I am so emotional now I have kids?

There are so many ways in which parenthood changes us as women, but one of the most noticeable, for me, has been the changing state of my emotions.

Baby survives despite sharing womb with 'foreign body'

Baby Maia was conceived against the odds, only to find she was sharing a womb with an ominous "foreign body".

Video: Baby shows dog how to jump - or vice versa

They say dog is man's best friend, but this playful pooch seems to have chosen a jumping baby as her number one buddy.

10 ways to soothe a crying baby

New paernts can get frustrated when their newborn gets fussy and can't settle down. When you're feeling overwhelmed, try some of these simple tips to help soothe your baby.

20 baby names that are becoming more popular every year

The data-lovers at nameberry.com have been at it again – this time, they’ve discovered the names that are continually rising up the ranks, ready to take out some top spots in the next few years.

10 great meals to make for new parents

Ideally, you want to give food that isn’t expensive to make, isn't too difficult to create, and freezes well; stews, bakes, soups and pasta sauces are perfect.

Weird pregnancy products

Some pregnancy products come to market and are just awesome. Others just leave you scratching your head.

Carers admit to force-feeding children

Twin brothers have become dads on the same day ? with their partners giving birth in the same hospital, and even the same birthing pool.

 

How many weeks til Christmas?

On your To-Do list

Get the "Santa" shopping done without the kids in tow.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.