Lease break fee
Question from Jason updated on 10th October 2014:
Hi there, I purchased a property and have broken my fixed-term lease early. In doing this I incurred a lease break fee. My property manager has advertised the property for a shorter term than my lease term and at a higher price, this has made the property unattractive to rent. Are they able to do this or should the terms be the same as my remaining lease?
Our expert Alan Bruce responded:
When a fixed-term tenancy is ended early, the terms and conditions of the original agreement will determine what options are available to the party who wishes to be released from the fixed term. Where a landlord and tenant mutually agree to end a fixed term tenancy earlier than the initial end date, the terms and conditions of that release should be clearly outlined and documented in writing (e.g. if any costs will apply). Once the terms of ending the fixed term agreement have been met, the tenant’s responsibilities would generally cease on the date the parties have agreed that the tenancy will end. Another way of being released from a fixed term tenancy is a process called Assignment. Assigning a tenancy is where a tenant’s interest in a tenancy agreement is passed to another person. In this case the tenancy would continue, but the tenant’s interest in the tenancy agreement ends when a new tenant takes over. If assigning has not been prohibited on the original tenancy agreement, a landlord cannot unreasonably withhold their consent to assign the tenancy, and the landlord cannot attach unreasonable conditions to that assignment. If a landlord agrees to the tenancy being assigned, they can recover from the tenant any expenses they reasonably incur. Tenants in this situation can only be held responsible until the day immediately before a new tenant takes over (as agreed to by all parties), where generally the terms and conditions of the original tenancy would continue. It is unclear if either of these examples applies specifically to your situation. If you would like to discuss your situation further, I would suggest you contact our Tenancy Advice team on 0800 TENANCY (0800 836 262) Monday to Friday between 8.00am and 5.30pm.The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.