[whoisme]

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.

[Fossy]

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.

This post has been edited by Fossy: 07/01/2013, 09:41 AM

[elizabethany]

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.

[Grrrumbles]

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.

[amoral lemur]

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

[BJBubbles]

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.

[whoisme]

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.

[Bluenomi]

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.

[Grrrumbles]

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.

[whoisme]

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.