Collecting Lease Break Fee

[vargam3]

Hey everyone I am just wondering what the best way to collect a lease break fee for a tenant that is breaking there lease early.

I collect rent through an automatic debit from there account, if they are planning to vacate on May 1 would I just debit the fee from their account??

I have never had to collect a lease break fee before so i was just wondering how other people do it.

 

[Seeley]

Other people don't as there is no such thing as a "lease break fee" in the Ontario RTA.

 

[Thomas Beyer]

What province is this ? What rights do you have under provincial legislation ?

If you can, tell them they are in breach of the lease agreement and you will re-rent the suite/house and if you cannot then they are responsible for the difference. Most provinces do not have a "lease break fee", but some provinces give you the right to collect/demand payment on the difference between their rent and your new lease with a new tenant, say a month or 2 of vacancies.

Know the rules & laws of your business, or hire someone that does, such as a PM.

 

[vargam3]

Hello Thomas,

It is in ALberta, this is a new property I purchased and I inherited the tenants and the lease that was already signed by them prior to my purchase. When I had called into the RTDRS to ask about the lease break fee and if it is enforcable the person told me that there is nothing in the Residential Tenancy Act that states a lease break fee cannot be charge, that this was an agreement between the landlord and tenant.

So from my understanding this is acceptable in Alberta? Either way my thought is its better to try to work with the tenant to keep a good relationship as long as they keep the place very clean and are fexible with viewings so I can find a new tenant quicker.

 

[Thomas Beyer]

I'd say if it is in the contract then it is a valid contract, and as such you should work with tenant but also enforce it. It is always better, more enjoyable and usually more profitable to work with someone than against them, but you have to be prepared to enforce a contract.

 

[vargam3]

Thank you for your help Thomas.

I will approach the situation with a win-win mentality.