A tenancy agreement protects both the landlords and tenants whereby there are terms and conditions that both parties must abide to during the rental period. This is to prevent any disputes from both parties.
When you sign a tenancy agreement, you have an interest in the property giving you exclusive possession for a fixed period of a certain duration, usually in consideration of a payment termed 'rent'.
The essential features of the tenancy are as follows:
- Tenant has exclusive possession of the property.
- Tenancy runs for a certain or fixed period of time.
- Landlord’s rights are subject to the tenancy.
- Landlord has reversionary interest of the property upon termination of the tenancy.
A landlord is bounded by the following covenants to a tenant:
1. Quiet enjoyment of the premises, which means tenant can enjoy the use of the premises without interference.
2. Non-derogation from the grant, landlord must observe all the terms granted to tenant.
3. Property must be fit for habitation at the start of the lease term;
4. Structure and facilities must be in good repair.
5. Good title. He is the owner and has the right to rent.
6. Pay property tax and quit rent if any
7. Exclusive possession of the premises for the fixed term, so long as the fixed term given has not expired.
8. If landlord has sold or transferred his interest, buyer or successor-in-title is bound to observe the terms of the lease granted
When a tenant signs a Tenancy Agreement with a landlord, he/she is bounded by the following covenants:
1. To pay rent
2. Keep the premises in good repair
3. No unauthorised alterations
4. Not to commit waste
5. Not to sublet
6. Allow access to landlord or potential tenant or buyer to view premises.
7. Pay all other rates, utilities etc.
8. Not to cause nuisance; and
9. Use the premises for its permitted purpose;
If the Tenancy Agreement includes you as a tenant, you must compensate the landlord for the unused lease term. What you and your landlord can do is to do a novation whereby you find another tenant. In this case, a new contract is substituted for an existing contract by agreement of the parties. This can happen between the original parties themselves only and it may also happen between the original parties (existing tenant) and a third party (new tenant). Since you still have 3 months more before your tenancy agreement expires, then the new tenant may take over the lease. If you have been paying $2,500 and the new tenant takes over the lease at $2,400, you have to pay the difference of $100 to the landlord. You will have to pay for all marketing costs, agent's fee and so on.
Our advice is for both parties to resolve any issues in an amicable manner as breaking a lease will be a costly affair.
Hope this answers your question.
Team PropertyGuru Read More