NB: There is an update at the end of this column.
QUESTION: Our lease expires at the end of this month. About 3 months ago our property manager sent us notice of a rental increase and asked us to sign a new lease.
We are keen to buy a property and don’t wish to sign a new fixed term lease with break fees for terminating early.
We are happy to pay the rent increase on a month-to-month lease, but our property manager is unhappy with this.
Our concern is that the property manager may send a notice to vacate before the end of the lease. Any advice? – Diver (via Forum).
ANSWER: The problem may be that if you just “roll over” your lease, the landlord then has to give you 90 days notice to quit, rather than 30 days on a fixed term.
They may accept a compromise of say a three-month lease bearing in mind that it takes six months on average to find the home you want.
By the way, the penalty for breaking fixed-term agreements of three years or less is six weeks’ rent, if you’re less than half way through, and four weeks’ rent if you are past the halfway mark.
Have a look at Fact Sheet 16 on www.tenants.org.au for more information.
UPDATE from Diver
Thankfully after explaining our situation to the property manager we have managed to reach a compromise with the landlord – we will pay the rental increase and give plenty of notice before we leave and they will allow us to go onto the continuing tenancy.
As you mentioned, the continuing tenancy is better for us, being more flexible and they would have to give us 90 days notice to leave while the landlord gets to retain good tenants who have looked after the place and always paid rent on time etc. It may well take us 6 months to find a property but at least now if we leave earlier we don’t have to pay weeks of rent and advertising etc…