Escaping a fixed term lease?

Angelene

So folks I come seeing advice, any help offered being much appreciated.

I'm under a 12 month lease which expires in May, I've been told by the management company that they won't accept 35 days notice given the nature of the lease and that if we leave before the twelve months has passed that we forgo the €1500 deposit and we're liable to pay any rent on the premises until May or until they can find someone else to take the lease, whichever comes first.

The only way by which we're allowed leave without being so liable is if we can find tenants to take over the lease ourselves (practically impossible at the moment in current climate and given rate of rent).

I've been doing a little research on the subject and it seems that the deposit is probably a lost cause given that we're breaching the terms of the contract, but I can't see anything anywhere about our being liable for rent?

brianthebard

Its possible that they would go after you for the rest of the rent but I've heard it never or barely ever happens. As you say the current climate is different to the norm and more companies and landlords might start to consider such actions. You can talk to threshold about it if you haven't but really you have all the information there is I think.

Victor

Angelene wrote: »

I'm under a 12 month lease which expires in May

...

I've been doing a little research on the subject and it seems that the deposit is probably a lost cause given that we're breaching the terms of the contract, but I can't see anything anywhere about our being liable for rent?

You have agreed to pay a year's rent to the landlord. That they agreed to take it in monthly installments is merely a matter of convenience. Its the 12 month lease bit that makes you liable.

sharpsuit

There is a relatively straightforward for OP to escape the fixed-term lease. This is provided to tenants by section 186 of the Residential Tenancies Act.

The first step for the tenant is to offer to the agent to sub-let or assign the lease, i.e. find somebody else to replace them for the remainder of the lease period.

Under section 186, if the agent refuses to allow the tenant find a replacement, the tenant can serve notice of termination according to the Act and giving 35 days notice.

If the agent allows the tenant to replace themselves, they can go ahead and find replacement tenants. If the agent refuses to accept the replacments without good reason, this would amount to a refusal under section 186.

If a tenant follow these steps, they are entitled to their deposit back and their is no prospect of a landlord being able to chase them for the remaining rent. It is important to have a paper trail to prove your case in a future PRTB case.

Victor

sharpsuit, the landlord has already accepted this in principal, but the OP fears not being able to find a replacement.

sharpsuit

Fair enough Victor

brianthebard

Out of interest what sort of good reason could a landlord/agent give for keeping a person in their lease?

Angelene

You mean apart from the law? Signing a lease makes one contractually obliged to fulfill the terms therein.

The_Conductor

brianthebard wrote: »

Out of interest what sort of good reason could a landlord/agent give for keeping a person in their lease?

A contractual obligation to pay a particular level of rent, which they are not obliged to revise until a year has elapsed. Were they to go back to the open market at this point- they would be obliged to take a very large discount on what they previously agreed. Its also why the OP is extremely unlikely to manage to find tenants to replace them at the same rent.........

People are slowly becoming cognisant of the vast amount of property which is entering the rental market (number of people renting is falling 2-3% month on month- while the supply of rental property has increased by 10-12% month on month for the past 4-5 months, and looks to be continuing to trend in this manner...... Simple economics- law of supply and demand

brianthebard

smccarrick wrote: »

A contractual obligation to pay a particular level of rent, which they are not obliged to revise until a year has elapsed. Were they to go back to the open market at this point- they would be obliged to take a very large discount on what they previously agreed. Its also why the OP is extremely unlikely to manage to find tenants to replace them at the same rent.........

Seems like a rather raw deal for the tenant? Do you think landlords and agencies are going to start going after tenants who want to leave for the remainder of the lease soon? I heard that its not something that has happened before, is that the case?

Arianna

sharpsuit wrote: »

There is a relatively straightforward for OP to escape the fixed-term lease. This is provided to tenants by section 186 of the Residential Tenancies Act.

The first step for the tenant is to offer to the agent to sub-let or assign the lease, i.e. find somebody else to replace them for the remainder of the lease period.

Under section 186, if the agent refuses to allow the tenant find a replacement, the tenant can serve notice of termination according to the Act and giving 35 days notice.

If the agent allows the tenant to replace themselves, they can go ahead and find replacement tenants. If the agent refuses to accept the replacments without good reason, this would amount to a refusal under section 186.

If a tenant follow these steps, they are entitled to their deposit back and their is no prospect of a landlord being able to chase them for the remaining rent. It is important to have a paper trail to prove your case in a future PRTB case.

what about a lease that has a clause saying tenants cannot assign or sub-let?

professore

brianthebard wrote: »

Seems like a rather raw deal for the tenant? Do you think landlords and agencies are going to start going after tenants who want to leave for the remainder of the lease soon? I heard that its not something that has happened before, is that the case?

No I don't think they will ... it would cost more than it's worth in legal fees. OP if you want to break this lease then just walk away and let him keep your deposit. In this climate you will have no difficulties in getting another one.

Emerald Lass

brianthebard wrote:

Seems like a rather raw deal for the tenant?

what about the raw deal for the LL? If a tenant breaks a lease in the current climate, chances are even if the LL allows the tenant to reassign the lease they probably won't get anyone in time before they move out. If LL allows the tenant to find a new tenant at a cheaper rent, then even this is no guarantee. The LL is almost certainly facing a vacant period, advertising costs and having to take the time again to find a tenant when they only recently did this and thought that they had a tenant for a year. Hardly an ideal situation. I am not talking about rip off LL's when I say this - I mean the decent ones who are good to their tenants and don't charge extortionate rent, and who are just trying to make a living - and before anyone makes coments that no such LL exists, they do and I am one of them!

Emerald Lass

sharpsuit wrote: »

If a tenant follow these steps, they are entitled to their deposit back and their is no prospect of a landlord being able to chase them for the remaining rent.

Sharpsuit following the steps would not be enough to get your deposit back would it? I'm assuming that you would actually have to find a new tenant to get your depsoit back? otherwise you could just throw an ad on daft, not actually let anyone view the property and then claim that you followed the steps and deserve your deposit back. that hardle seems right. AFAIK the tenant actually has to get a new tenant to reassign the lease to and that person needs to reasonably be acceptable to the LL. And if the potential new tenant could not provide references or met the same screening process that the LL employed for the original tenant then the LL is entitled to refuse the potential new tenant and keep the deposit. Otherwise the currnt tenant could offer the house to anyone they meet on the street just to get out of the lease.

Victor

Arianna wrote: »

what about a lease that has a clause saying tenants cannot assign or sub-let?

In such a case this Act supercedes the lease.

http://www.irishstatutebook.ie/2004/en/act/pub/0027/sec0186.html

useruser

Emerald Lass wrote: »

Sharpsuit following the steps would not be enough to get your deposit back would it? I'm assuming that you would actually have to find a new tenant to get your depsoit back? otherwise you could just throw an ad on daft, not actually let anyone view the property and then claim that you followed the steps and deserve your deposit back. that hardle seems right. AFAIK the tenant actually has to get a new tenant to reassign the lease to and that person needs to reasonably be acceptable to the LL. And if the potential new tenant could not provide references or met the same screening process that the LL employed for the original tenant then the LL is entitled to refuse the potential new tenant and keep the deposit. Otherwise the currnt tenant could offer the house to anyone they meet on the street just to get out of the lease.

Partially correct. The tenant must find a new tenant willing to take over the remainder of the lease, the landlord may not refuse to accept this tenant. The landlord can of course decide not to offer the lease to the new tenant but the original tenant has met the conditions of the act by providing someone willing to take over the lease and is entitled to the return of their deposit (subject to the usual Ts & Cs of course).

Emerald Lass

just some information I found in relation to the sub-tenancy.

A sub-tenancy usually arises where the tenant does not wish to occupy the tenancy for the entire term and lets the property to another person. The tenant in these circumstances is referred to as the head-tenant and the party allowed into occupation is the sub-tenant. The head-tenant will generally remain legally liable for the payment of the rent to the landlord, whether or not the head-tenant receives this from the sub-tenant.

The tenant can only create a sub-tenancy with the landlord’s written consent, which can be refused for no stated reason. Where a landlord refuses consent to sub-let a fixed term tenancy, the tenant may terminate the tenancy before the expiry of the fixed term.

So while it appears that the head-tenant can in fact just let anyone into the property, they are actually still liable for the lease and tenancy, and should the sub-tenant fall into arrears with rent, cause damage or leave the property without notice, then the head tenant appears to be liable to the LL for these actions.

I am glad to hear this, otherwise all and sundry could get out of a fixed term lease simply by offering the house to anyone they meet on the street, and the LL could end up with all sorts of trouble.

so to anyone considering breaking a fixed term lease by getting a sub-tenant in, make sure you get a decent tenant otherwise the LL would be within their rights to come after you for any damage or rent arrears the caused by the sub-tenant.

Also according to the residential tenancies act 2004:

The Tenant is responsible for the payment of the agreed rent for the entire agreed term.

so while the LL cannot keep your deposit arbitrarily, if you insist on getting it back despite breaking the lease, he/she could well go after you for the remaining rent. they have a legal right to do so and in the current market I believe this will become more common.

antoinolachtnai

Is that a direct quote from the RTA? I don't think it is.

After the sixth month, there is a possibility that the tenant can terminate by giving statutory notice. This is quite a complicated area. There is no clarity.

Comments about subtenancies are correct. There was a discussion on here about whether the landlord or the tenant had discretion over whether the new tenant would be a subtenant or an assignee. My view is that the landlord has discretion in this regard, but there is certainly ambiguity. In general, you should not sublet.

The act is very ambiguous and very difficult to apply in many common circumstances.

In general, I would say that it is not in the interest of landlords to keep people in property if they don't want to stay.

321654

professore wrote: »

No I don't think they will ... it would cost more than it's worth in legal fees. OP if you want to break this lease then just walk away and let him keep your deposit. In this climate you will have no difficulties in getting another one.

I the was taken to court and lost, could there be costs involved?

It looks to me that if the letter of the law is applied here the OP will continue to pay the landlord the rent, while receiving the rent from the subby themselves.

Emerald Lass

321654 wrote: »

It looks to me that if the letter of the law is applied here the OP will continue to pay the landlord the rent, while receiving the rent from the subby themselves.

yes but there is no guarantee for the head-tenant that the subby will pay the rent, or adhere to the existing lease. If for any reason the subby didn;t pay rent the the head-tenant would be the one the LL comes after, likewise if the subby causes any damage etc. The head-tenant remains liable for the lease, so it seems to me that it is not in the head-tenants interests to sublet. If the subby stops paying rent, the head-tenant will be liable to the LL plus to the LL of their new property. And given that the head-tenant had no qualms about breaking a lease which they were tied to, then what is to say that the subby with no ties to a lease will not walk out after a month, or stop paying rent or whatever?

I can't see any benefit to a tenant to sublet their lease - other than to keep a deposit, which in the long run may not have been worth it if the subby leaves a rent arrears bill of a couple of grand.

useruser

Emerald Lass wrote: »

yes but there is no guarantee for the head-tenant that the subby will pay the rent, or adhere to the existing lease. If for any reason the subby didn;t pay rent the the head-tenant would be the one the LL comes after, likewise if the subby causes any damage etc. The head-tenant remains liable for the lease, so it seems to me that it is not in the head-tenants interests to sublet. If the subby stops paying rent, the head-tenant will be liable to the LL plus to the LL of their new property. And given that the head-tenant had no qualms about breaking a lease which they were tied to, then what is to say that the subby with no ties to a lease will not walk out after a month, or stop paying rent or whatever?

I can't see any benefit to a tenant to sublet their lease - other than to keep a deposit, which in the long run may not have been worth it if the subby leaves a rent arrears bill of a couple of grand.

I'm not sure you are correct in your assumption that the act maintains that that this is a sub-tenancy (when a fixed term lease is transferred in order to break it). Can you quote the sections you are drawing this conclusion from? I'm not saying you are necessarily wrong, and as Antoin points out above it is not clear cut, Threshold certainly disagree with you on this point.

Ste.phen

Surely a sub-tenancy would only be in any way a workable option if:
- the original tenant can't find a replacement at the rate they're contracted to pay in the lease
- they find someone willing to pay a lower rent
- that new person moves in, pays rent to the original tenant, who supplements it with their own money and sends it to the landlord
Even then the amounts of money involved may make that financially unworkable

I suppose, if there's only a few months to run on the lease, maybe a sublet or series of short-term sublets would be easier for the original tenant to arrange than a reassignment of the lease.

I don't think anything Emerald Lass said was incompatible with my understanding of the act, either. The *preferred* option for all concerned is to reassign the lease, which the act clearly allows for. EL was talking about the case where a sublet has to exist for some reason, and saying that it's the less preferable option

Emerald Lass

Hi all - it does appear to be a grey area as to whether the lease can be reassigned or sublet and who can decide which it is. As I understand it, when a tenant wants to break a tenancy they can either
a) just move out and forfeit their deposit against costs incurred by the LL and know that the LL is within their rights to pursue the remaining rents due on the lease
or
b) they can find someone to sub-let or reassign the lease to. if they can do this then the LL must return the deposit.

From what I have seen, read and been told by others in the know, it appears that the discretion to allow the tenant to reassign or sublet is in the hands of the LL. This interpretation makes sense, as otherwise as I have already said before a tenant who doesn't want to loose their dep could let literally just anyone into the property and the LL would either have to accept it or give back the deposit. This hardly makes sense - surely the PRTB would not accept that a tenant can let someone totally unsuitable into the house and take over the lease and the LL has no say in this? or that the tenant has no responsibility to try to find a good tenant?

It appears that the place where the LL can retain some control is whether they allow the new tenant to be a sub-tenant or if they allow the lease to be reassigned. If the LL was totally happy with the new tenant then reassignment would be preferable. But if the LL had any doubts then they could agree to only allow a sub-let. The hope would be that the head (original) tenant would not want anyone unsuitable in the house as they would still be liable, and therefore would go to reasonable lengths to assure the new sub-tenant is decent. Of course the subtenacy section of theoriginal lease would play a factor - my lease states clearly that the head-tenant remains liable for any breach of the lease. If this is not in the lease then it may be different.

Threshold's site says:

If a tenant wants to end of fixed-term tenancy early, they should inform the landlord in writing of their wish to assign or sublet the lease.

so even Threshold seem to accept that there are two options - reassign or sublet.

Neither is really preferable to either the tenant or the LL, but given the length of time it is taking to find new tenants in some areas, it may wel be the case that many LL's will now play to the letter to keep the deposit, and may well chase after the other rent. As long as they agree to allow a sub-let then if tenant finds no one they keep the dep. By allowing only a sub-let they are sending the message to the tenant that they should find a good quality tenant or they will remain liable.

So from what we are all saying it is a very grey area as to interpretation of the reassignment of a lease. This discussion shows one thing for sure - that the powers that be haven't provided sufficient legislation or advice for either the tenant or the LL in many areas of the rental process.

Calina

It is in both parties interest to negotiate a break clause in a fixed term lease.

I have one for two months. I cannot understand why landlords consider this a problem - but then in my past experience, it is the landlords who have been trying to break cast iron leases, not me.

321654

Calina wrote: »

It is in both parties interest to negotiate a break clause in a fixed term lease.

I have one for two months. I cannot understand why landlords consider this a problem - but then in my past experience, it is the landlords who have been trying to break cast iron leases, not me.

I can see reasons from bith sides why you would not want a break clause.

from the LLs side i think the less he has to pay out in PRTB registration fees and advertising the better.

from the renters side i think that they really dont want to be at risk of being dumped out on to the street if the LL felt like getting rid of them.

useruser

Emerald Lass wrote: »

Hi all - it does appear to be a grey area as to whether the lease can be reassigned or sublet and who can decide which it is. As I understand it, when a tenant wants to break a tenancy they can either
a) just move out and forfeit their deposit against costs incurred by the LL and know that the LL is within their rights to pursue the remaining rents due on the lease
or
b) they can find someone to sub-let or reassign the lease to. if they can do this then the LL must return the deposit.

I certainly agree with you on these points, however:

From what I have seen, read and been told by others in the know it appears that the discretion to allow the tenant to reassign or sublet is in the hands of the LL.

This is not my reading of the act, nor does it make sense to me, why would a landlord ever accept a re-assignment if this were the case?

Can you please quote the section of the act you are referring to?

Emerald Lass

useruser wrote:

This is not my reading of the act, nor does it make sense to me, why would a landlord ever accept a re-assignment if this were the case?

a LL would accept a re-assignment if the new tenant found was meeting the same criteria as the original tenant (i.e reference checks, proof of ability to cover rent etc) and he/she was happy with the new tenant - it saves them the trouble and cost of advertising and arranging viewings. The original tenant has found a good replacement which the LL also deems to be a good choice - no problem, re-assign. However, the old tenant doesn't bother to find a decent tenant, can provide no references etc - tell old tenant you will only allow a sub-let not a re-assignment. Old tenant now has to decide if they are prepared to allow this messer into the property and remain liable for any rent arrears or damage.

If my tenant wanted to break the lease, in the current situation I would be reluctant to readily agree. If my tenant could find a good quality replacement, then I would be willing to re-assign the lease - it saves me a lot of trouble. And by agreeing to this, if she cannot find a replacement I am within my rights to withold her deposit to cover the cost of finding a new tenant myself.

The_Conductor

Emerald Lass wrote: »

if she cannot find a replacement I am within my rights to withold her deposit to cover the cost of finding a new tenant myself.

Sorry- but you're factually incorrect here.
The 2004 Residential Tenancies Act specifies precisely what the purpose of the deposit is- and it most certainly does not cover a landlords costs of finding a new tenant. Irrespective of the existence, or lack thereof, of a lease, the provisions of the 2004 Act have legal precedence in all matters- including notifiable terms to vacate a property- on the parts of both parties.

If you withold the deposit, or purloin it in whole or part, in order to cover the costs of finding a replacement tenant, you are in breach of the Act, and liable to a fine, or if convicted, to other sanctions.

If you believe that it is indeed at the discretion of a landlord to allow a tenant to reassign a lease- which you have alluded to twice thus far in this thread- please point out precisely where in the Act this is provided for.

By the way- I disagree vehemently with many of the provisions of the Act- the pendulum has swung far too far in favour of tenants, and away from protecting the rights of the owner of the property. While this fact may have been acknowledged by several politicians- unfortunately there are no remedial orders or acts planned at this stage.

S.

The_Conductor

Emerald Lass wrote: »

while the LL cannot keep your deposit arbitrarily, if you insist on getting it back despite breaking the lease, he/she could well go after you for the remaining rent. they have a legal right to do so and in the current market I believe this will become more common.

The lease is a separate instrument, and is subordinate to the terms of the Act. If the tenant breaks the lease- without satisfactorily subletting or reassigning the lease in accordance with the terms of the Act- the breach of the lease is actually a civil matter between the landlord and the tenant. I believe there have been instances where the deposit was lodged with the district court, along with remittances on the part of the tenant to cover the legal costs of the action (which would be in keeping with the terms outlined in the Act). In these cases the deposit would not be purloined by the landlord- simply lodged with the court, until such time as a decision regarding the costs associated with breaking of the lease were arrived at.

Multiples instances of precedence exist for enumerating a 'break-out' cost on a fixed term lease- mostly regarding commercial or business lettings, including 2 recent high profile cases in Galway. I think its highly probable that similar actions are on the cards for residential leases- particularly as the Act does not sufficiently protect the rights of landlords. While it may be a pain to chase people- if a few sufficiently high profile cases end up in the courts- it would certainly send a message out to tenants that when they sign a lease that there are implications associated with the lease, and they cannot simply walk away from their obligations- as they have hereto been doing........

useruser

Emerald Lass wrote: »

a LL would accept a re-assignment if the new tenant found was meeting the same criteria as the original tenant (i.e reference checks, proof of ability to cover rent etc) and he/she was happy with the new tenant - it saves them the trouble and cost of advertising and arranging viewings. The original tenant has found a good replacement which the LL also deems to be a good choice - no problem, re-assign. However, the old tenant doesn't bother to find a decent tenant, can provide no references etc - tell old tenant you will only allow a sub-let not a re-assignment. Old tenant now has to decide if they are prepared to allow this messer into the property and remain liable for any rent arrears or damage.
If my tenant wanted to break the lease, in the current situation I would be reluctant to readily agree. If my tenant could find a good quality replacement, then I would be willing to re-assign the lease - it saves me a lot of trouble. And by agreeing to this, if she cannot find a replacement I am within my rights to withold her deposit to cover the cost of finding a new tenant myself.

Sounds lovely. I would be surprised if landlords would not be more likely simply to insist on a sub-let. However, I disagree with your reading of the act which seems like conjecture to me, can you please quote the section that permits the scenario you describe?