In this article, we’ll share a real-life case we recently handled, involving an important release clause that many landlords in Australia might not be familiar with. We hope this story helps you feel more prepared when managing similar situations with tenants holding release clause from Defence Housing Australia (DHA) .
Real life case
Last week, one of our tenants informed us that they needed to terminate their lease early because they were joining the army.
Here’s a quick explanation: when renting to tenants who may serve in the military, there is often a release clause issued by Defence Housing Australia (DHA) in the lease agreement. According to an important provision in this clause, if a tenant breaks their lease early for any military-related reason, they are only required to pay one month’s rent before moving out. They won’t need to pay a break lease penalty or advertising fees. The landlord will need to cover any rent loss for the remaining lease term.
Since situations like this are relatively rare, many landlords may overlook this clause in the lease agreement.
Key Insights on Managing DHA Leases
To help protect our landlord’s interests, the Midas property management team immediately consulted multiple lawyers and professionals at the RTA department for advice. After obtaining professional guidance, we negotiated with the tenant and proposed a reasonable solution. Thanks to our efficient communication, the tenant agreed to pay the break lease penalty, which reduced the landlord’s losses and resolved the issue smoothly.
From our years of property management experience at Midas, we’ve found that DHA tenants are generally excellent. They pay rent on time, maintain the property well, and are easy to communicate with.
However, there are instances where tenants might not accept our proposed solutions. If this happens, we promptly inform the landlord, clearly explain the potential costs and next steps, and ensure they are fully prepared for any outcomes.
Using this case as an example, we’d like to remind landlords in Australia to pay attention to the release clause for DHA tenants in their lease agreements. Ignoring this clause could result in unexpected expenses.
Preventing Lease Disputes with Midas Team
At this point, you might be wondering: “How does Midas help prevent situations like this when finding tenants for us?”
In such cases, we add a special clause to the lease agreement. This clause states that DHA tenants breaking their lease early must pay the break lease fee and advertising fees. We explain this to the tenants during the lease signing process, ensuring they understand the landlord’s perspective and challenges. Most tenants are willing to agree to these terms.
Of course, tenants have the right to reject these additional clauses. If they do, as mentioned earlier, we communicate with the landlord immediately and adjust the approach based on their preferences. We always aim to balance the landlord’s interests while working toward a good agreement with the tenant.
Conclusion
In summary, understanding and paying attention to the release clause in lease agreements with DHA tenants is crucial to avoiding unexpected losses. Ignoring these details can lead to significant challenges, but with Midas’s professional support, we can help landlords navigate these situations smoothly and protect their interests. If you have any questions regarding to property management service, feel free to contact us at any time.
