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 Feral 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 Feral 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

 

Special offer: The Baby & Toddler Show 2014

At The Baby & Toddler Show, you?ll find everything you need to get ready for your new arrival and guide you through the early weeks and years of parenting.

An open letter to Tony Abbott: please salvage our super

We face financial ruin, but most of us don?t realise it. If we don?t act together to salvage our superannuation, I have no doubt the new GFC will be the Girls? Financial Crisis.

'I'm happy to know I'm changing lives': surrogate mum of two

I know that once the baby is born, I will focus on the gift I have given, and watch the parents with their new child. I can't wait for that day.

Birth trauma and the issue of informed consent

There is a perception that women should just be happy they have a healthy baby in their arms. But for women who experienced birth trauma, there's a lot more to it.

Tips for managing pollen allergies and hayfever

They're simple tips, but they can have a big impact on those who suffer from hayfever and pollen allergies.

Ada Nicodemou shares tribute to her stillborn baby

Just over one month since Ada Nicodemou and her husband lost their second son, the Home and Away star has shared a touching poem for her baby.

Mum causes stir breastfeeding on train

?To the woman breastfeeding her kid on the train. Seriously! On the train?" began the letter of complaint.

10 things they don?t tell you about being pregnant

As I slowly waddle my ever-changing pregnant body towards the finishing line of my due date, it?s becoming increasingly clear there are a lot of things they just don?t tell you about pregnancy.

Overcoming a fear of the dark

A toddler's fear of the dark is very normal, but there are ways parents can help children through this stage in their development.

Kids, TV and movies: how young is too young?

It seems you don't have to throw the TV and iPad out the window - it all boils down to moderation, supervision and interaction.

Video: Baby's first birthday is a special day for mum, too

?A baby?s first birthday is also mum?s first birthday.?

The day Supernanny came to tea

Prince William's favourite celebrity child trainer Jo Frost puts Bryony Gordon and her toddler through their paces.

The words I hated hearing as new mum

It was less than a week after my son was born that I first heard it - from my mother.

To the pharmacist who sold me baby formula

On the rare occasion I catch sight of you at school, or around town, I think back to our earliest exchange. I?m sure you have no recollection of it at all.

Babies may benefit from autism therapy

Children showing signs of autism don't usually receive early intervention until well into toddlerhood or later, but a new study suggests infants with symptoms of the developmental disorder might benefit from therapy from as early as six months.

Knatalye and Adeline born with an everlasting bond

Knatalye Hope and Adeline Faith are a lot like any other identical twin girls, but there is one dramatic difference: they're joined at the chest and shares several internal organs.

The question this dad wishes he'd asked his wife

I should have seen that my wife wasn't the same person I'd fallen in love with, but we were both too focused on simply trying to get by.

Why we should talk about the deaths of the Hunt children

The deaths are too horrible even to think about. Yet we owe it to the children - Fletcher, Mia and Phoebe Hunt - to think long and hard about it all.

Baby dies of meningococcal weeks after vaccine application denied

A six-month-old girl has died from meningococcal disease just weeks after an application for government funding of a vaccine for the most deadly strain of the virus was rejected.

Finding the right balance when playing with your kids

Being too involved in our children?s play and not allowing our kids enough free time for unstructured activities can mean our kids miss out on the value that play offers.

Creative DIY light shades

The Pop Light light shade comes in a flat pack already made - it's up to you to design it as you'd like.

The battle of iParenting versus imagination

Have we forgotten how to be imaginative, resourceful parents?

Why movement is so important for your baby's growth

Letting your child move as much as possible in the early years ? using all senses, engaging in the real world, preferably outside ? will help them grow up healthier, smarter, calmer and stronger.

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

Special offer: The Baby & Toddler Show 2014

At The Baby & Toddler Show, you?ll find everything you need to get ready for your new arrival and guide you through the early weeks and years of parenting.

Losing yourself to motherhood

While watching your baby grow into a unique little person is exciting and wondrous, the intensity of meeting everyone else?s needs can ever so sneakily overtake your own needs for self-care.

Tearing during delivery: the facts

Almost all women will experience bruising, grazing or tearing after a vaginal birth. Depending on the degree of tearing, there are various treatments available.

6 tips for a day out with a baby and toddler

Outings can be lots of fun with the kids, but there are inevitable challenges. Here's some information about days out to help you be a little more prepared.

Why I invited a dozen people to watch my son's birth

I sent invitations on burgundy scrapbooking paper stamped with a field of poppies, and told each person why I wanted him or her there. I warned that there would be nudity.

Getting labour started: tips for a natural induction

When your baby?s due date comes and goes without so much as a pop - let alone a bang - it can be disheartening. Mums and a doula share their stories of natural inductions.

7 mistakes old hands make with new babies

As I sat across the table from my friend ? me, a seasoned mother of three; her, a brand new mum ? I thought of all the mistakes an old-hand parent can make when visiting a newborn baby.

That's my boy: a dad's diary of the first 4 months

Unbearable anxiety, unspeakable joy, constant exhaustion and bouts of frustration ... The many shocks of first-time fatherhood resound in a dad's diary of his son's early months.

One of the most important things a new mum can do

Finances may not be as cute as a newborn, but with many women?s working arrangements changing post-baby, monetary matters need attention too.

Dying mum saves baby with last breath

Dying from a gunshot wound, Jessica Arrendale used the last of her energy to hide her baby from her killer.

Personalised baby gifts

We've scoured the internet to find gorgeous personalised keepsakes and nursery decor to record baby name and dates. They make great gifts for christenings, name days and birthdays! (All prices in AU.)

 

Reader offer

2 FOR 1 TICKET OFFER

For Shopping, For Advice, For Baby & You. Enjoy a special day out with fabulous shopping from over 200 brands, leading parenting experts offering advice on a range of topics, and amazing children?s entertainment

 
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.