Replacement Tenant during the lease term. Break Lease.
I am a Landlord and my tenant wants to break the lease early.
We have a Legal Binding Contract with the Stamp Duties done. What Should I do?
What are the things to look out for and Right Procedures?
Proper Documentation/Process between Tenant and Landlord.
- Novation Agreement between the 3 Parties which includes the Landlord, Original and Substitute Tenant or;
- Sign a Fresh New Tenancy Agreement with the Substitute Tenant with the same terms or Renegotiate or;
- Appoint an Agent to find a replacement to screen and qualify potential prospective tenants. This gives you more options/choices and not solely obliged to just take up the proposed Substitute Tenant.
Pros and Cons between a Novation vs a Fresh New Lease.
Novation is a takeover and involves more than 2 parties. There will have a lot complications.
Fresh New lease. Only release the original tenant when the substitute tenant is found. Do note that when signing a New Lease there is a chance that there will be some additional requests from the incoming tenant and to be discussed and agreed upon before signing the contract.
In both Scenarios, the Landlord should not suffer from any financial losses. However, for some cases, the Landlord is willing to do certain enhancement to the property when if the terms and condition have been improved.
There should be a Proper Handing Over and Taking Over between the Tenants and the Landlord or Landlord Representative to take note to redo the condition report of the Property.
We have been doing Property Management for more than a decade and we help Many Landlords and Tenants to undergo a Smooth Transition from Negotiation to Handing over.
Contact Us and Let me Provide you with Professional Advice.