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Navigating the break lease process is a challenge that puts even the best property managers to the test.
Samara Bedwell, a property manager and business owner with over 20 years of real estate experience, shared her top tips for managing the break lease process for the Real Estate Institute of Queensland (REIQ).
“A break lease occurs when a tenant prematurely terminates their lease agreement before the fixed term ends,” Bedwell explained.
“Throughout the break lease process, it’s vital to maintain professionalism and empathy,” she stated. “By approaching the process with understanding and empathy, you can foster positive relationships and preserve the reputation of both the lessor and your agency.”
For property managers navigating this complex situation, Bedwell stressed that it is crucial to maintain open lines of communication with the tenant from start to finish.
When the tenant first expresses their intention to break the lease, Bedwell advised property managers to “promptly respond to their request ad arrange a meeting to discuss the situation”.
“It’s important to understand the tenant’s reasons for breaking the lease and address any concerns they may have,” Bedwell said. “Open dialogue can often lead to mutually beneficial solutions, such as finding a suitable replacement tenant or negotiating a compromise that satisfies both parties.”
Bedwell also advised property advisers to review the tenancy agreement and promptly communicate to the tenant any provisions relating to breaking the lease.
“In Queensland, tenants who wish to break their lease are generally responsible for compensating the lessor for any financial losses incurred due to the early termination,” she said.
“This may include paying rent until a new tenant is secured, advertising costs and reasonable reletting fees.”
Once the tenant has expressed their desire to break the lease, Bedwell recommended that property managers act quickly in marketing the property for a new tenant.
“By actively seeking a replacement tenant, you can mitigate the financial impact on both the lessor and the outgoing tenant,” Bedwell noted.
Despite the feelings of urgency that can arise during the advertising period, Bedwell reminded property managers that it is crucial not to cut corners in screening new tenants.
“Perform background checks, contact references, and assess their suitability as tenants,” she said. “Keep all parties informed about the progress to instil confidence and transparency throughout the process.”
Finally, once a new tenant has been secured and the break lease process is nearing its close, it is time to formally terminate the existing lease agreement with the original tenant and manage the return of the tenant’s bond.
“Handling the break lease process in Queensland necessitates knowledge, organisation and effective communication,” Bedwell said. “By following these simple steps, property managers can navigate this process with confidence, minimising financial impact and maintaining strong relationships with both tenants and lessors.”
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