How Breaking a Lease When Buying a Home Can Be Done

How Breaking a Lease When Buying a Home Can Be Done


Jayden, what are you doing?
– I’m breaking my lease. Well, that’s not how you do it but today,
we’re going to show you how you can break your lease easily and effectively
without getting penalized too many fees. So, what does breaking your lease look like?
Jayden, tell me more. Well, let’s say you bought a home
and you’re currently renting. You might have bought a home, you got to
settle it in say, 30 days, which is awesome. You get to move in but you still have
two months run on your lease. Why is that a problem? Well, as we know, when you sign a lease,
you usually locked into a contract from anywhere from six to 12 months, sometimes shorter.
Breaking that lease can mean penalties. But the good news is there are a few ways to
get around these and avoid paying those nasty fees and penalties and break your lease early. Jayden, how do you tell your property manager
that you’re going to be breaking your lease? Yeah, Nathan, it’s pretty easy.
The first tip really is to tell them ASAP. So you want to let them know as soon as possible
because with that lease, the fact is that you’ve locked into say, six or 12 months,
so they can expect the tenant to be there hanging the rent the whole time.
As soon as you can tell the property manager, the sooner they can start trying to find
a new tenant. So tell them as soon as possible.
Now, do I need to do anything like give it to them in writing, formalize it
or what’s it all look like? So you just go on the RTA website, in Queensland anyway
and you download the Form 13. So have a look at the link in description.
We’ve got a whole detail and actually, link to the Form 13, which you have to fill out
and you shoot back to your real estate agent, ASAP. So Jayden, I’ve told the real estate agent
I’m going to be cancelling my lease. I’m giving them the Form 13, what are the costs
now that are going to be involved with this? There are some costs. I hate to say but there are going to be some
costs to break your lease early because it comes back to- You know, you had landlord
that you’ve been paying with property and you’ve locked in for contract for six
to 12 months, so they’re going to expect to get their rent for those six to 12 months.
So there’s three main costs you have when you’re breaking your lease.
Number 1, is reasonable re-letting costs, so this is just the cost that cost them to
basically fill the tenant and get someone in there. Number 2 is reasonable advertising costs. So they’ve got to put it online, they got to
put it to RealEstate.com.au and you know, this can be just a few hundred dollars.
It shouldn’t be too much and Number 3, potential cost you pay is compensation for lost rent.
So in other words, if you move out, you got to keep paying until landlord
or the property manager finds another tenant. So Jayden, what are some ways you can break
your lease without penalties. Yeah, so let’s go through the first one:
reducing advertising costs. Now, reducing advertising cost is a couple of
hidden tricks and things you should know about this. If for example, you’ve got a 12-month lease,
if you’re halfway through that lease, when you want to break your term, the advertising costs
are usually disclosed upfront and they might be $400 or $500, right? You can pay only
proportional to what you’ve had of your lease, so if half of your lease is done, you only need to
pay half of the advertising costs that are outlined in your lease agreement. Oh, that’s brilliant.
So you can effectively get away with the percentage pro-rata of what you stayed — Pretty much. So if you’ve been there for
80% of your lease term, you know, you might have only one month left out of
six or something like that, you only need to pay 20% left on those advertising costs.
So you’re saving a bit of money there on the advertising costs. Another neat way is jump on Gumtree.
You’d be surprised about how many people are looking for a lease, to be able to rent,
that you might be able to find and leap, take over your lease. Yeah, it’s really good because that’s
the real secret here: if you find another tenant, you can ask a landlord to swap them over
or property manager. They got to do that check in consent
but it could mean you save money and you actually don’t pay anything to
break your lease. It’s really good. Jayden, what’s checking for a breach of contract? So, this is another way you can get out of your lease
and break it early is if the landlord hasn’t fulfilled duty as a landlord.
They called this checking for breach of contract. Now, it gets a bit technical and you don’t want to
be too cheeky here but let’s say for example, the landlord had- you know, there’s a toilet
that you wanted to get fixed and you haven’t been able to use your own toilet for five months,
they have given you a property that isn’t properly maintained
and on that grounds, you could look at you know, confirm that they breach the contract
and actually get out of that way. Like I said, this area is a bit tricky
and it really depends on the situation. If you got a normal property with
the reasonable landlord, it’s not easy way to get out of it but if you’re living some sort of
a den or like something terrible, then it could be a good way breaking that lease. So lastly, get moving as soon as possible.
Jayden, what does that look like? Ultimately, like we’ve shown here,
if you’re breaking your lease, you’re going to be responsible to find another tenant.
So the sooner you let your landlord know or the property manager know, the sooner
they can start working towards getting the property advertised, getting it cleaned up,
and getting it re-leased to save you as much money as possible. So lastly, let’s summarize the five steps
to break in your lease. So Jayden, Number 1 was Form 13. Yes, so that’s putting in your intention to leave
with the property manager or the landlord and let them know formally in writing
that you want to hit the road. Number 2, leave the property on
the proposed date in time. Yeah, that really just comes down to
being organized. You’re going to have to organize a bond claim,
the property going to have to put back into the shape that you got it in, assuming that you-
the gardens aren’t overgrown and you sort of fix up that stuff, so leaving on the date
that you proposed means if the landlord or the project manager can get
some else in there and replace them and get that rent rolling through to save you money. Number 3, take lots of photos. Oh, my gosh. I can’t stress this enough. The amount of times that we’ve heard stories of
people getting a little bit screwed over on bonds because they didn’t take photos and there are accused
of leaving dirty showers or bathrooms or grime under the sinks, take photos before you
move to the property, so you obviously know that it’s been cleaned up and even after,
if you clean stuff, if you clean up the backyard, it was all spotless and clean, take a photo,
so you got evidence in that because there could be a storm that comes overnight.
You don’t know and you could get blamed for the mess that you didn’t make. Number 4, fill up an exit report. So the exit report, it’s also called a Form 14a,
shows the condition of the property when you left it. So it’s stuff like, if there’s lights out,
if there’s holes in the carpet, if there’s little bits and pieces, again you get photos back up
but the Form 14a, the exit report shows that in detail and it really notes down again,
it’s legally binding if something goes wrong, how the property was when you left. And lastly, remember to fill in
your refund of bond form. Yes, so this is called the Form 4.
We’re going to attach it again underneath in the comments, check it out.
This is important because your bond can be thousands of dollars or a few grand.
It’s usually four to six weeks of rent, so you want to make sure you get all your money back
and they won’t release that until you put that form in post or simply, in RTA anyway,
to make sure you can get your lease cut quickly. So that’s it for today. Hope you liked the video.
If you did, leave some comments below. We’d love to hear from you and if you got a topic
you’d like us to cover in the future, hit us up at HunterGalloway.com.au.

3 thoughts on “How Breaking a Lease When Buying a Home Can Be Done

  1. Other ways to break your lease when you've bought a home https://www.huntergalloway.com.au/can-you-break-a-lease-when-you-buy-a-house/

  2. For free home buying resources, calculators and downloads check out the First Home Buyers Hub https://www.huntergalloway.com.au/hub

  3. For free home buying resources, calculators and downloads check out the First Home Buyers Hub https://www.huntergalloway.com.au/hub

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