Reader Question – Can I Break A New Lease?

August 21st, 2013 · 2 Comments · Buying or Selling Your Property

Wild Woman

I just got this email this evening about 10 minutes ago. There are times in the past I’ve expressed my frustration with the level of education present in most real estate agent’s handling of rental property. What they don’t know, should know or just ignore, CAN HURT YOU.

Reader Question

May I please request if you would be able to assist me on a clarification on a lease contract that I have with my tenant for my condo.

My husband and I put our condo on the market this year since we purchased a house. At first we had it for sale only. We then noticed we were not receiving interests so we decided to list it for lease as well. We decided whichever one came first we would take the offer.

We received the lease offer first. The tenants lease contract is to start Sept 1st. This tenant paid for the entire year to secure our suite due to competition.

Last week we received an offer from another person to purchase our condo with conditions. One is that we terminate the lease with the individual that is to move in with the lease in Sept.

We contacted the agent in charge of the client who will be leasing our condo. We let them know we have received an offer from another person to buy our condo and that we would have to re-locate his clients lease since they have not moved in and their lease has not started. We explained we would assist them on finding them another place in the same area with the same rent. We also explained if there was any difference in the lease costs, we would pay the difference.

The agent for the individual that is under the lease is rejecting this offer and says by law they don’t have to agree.

Our real-estate agent has explained to them if they do not agree, we would have to declare bankruptcy and the new owner would also be giving them the notice of lease termination.

What are our rights when it comes to this situation? The tenant has not moved in and their contact does not start until next month.

My Answer

First of all you real estate agent is a complete idiot. They should be sued and this inquiry is the exact reason why you are paying them a damn good commission to sell or rent your place. They haven’t done their damn job and this is why you find yourself emailing me in the middle of the night for clarification.

Collecting More Than Two Month’s Rent is Completely Illegal

In this transaction there are two agents involved and both of them are complicit. The law is clear and I for one, can’t wait till they start handing out hefty fines for this.  But you know the agents involved don’t give a flying hoot about you being liable for doing this. Shame on them for not knowing their ass from a hole in the ground. In Ontario you get first and last month’s rent and that’s it. If you don’t like it, don’t  be a landlord.


You signed a lease, collected 12 months of rent, and now you’d like to back out. You as the landlord do not have the right to terminate the lease. The new owner can terminate the lease but only next year in September 2014 (assuming it’s a one year lease). The only way out of the lease is to negotiate with the tenants and you have to pay whatever you can negotiate. One month’s rent for every month remaining in the lease is not unusual.

Bad Faith

As a real estate owner with assets, you absolutely cannot deal in bad faith. Dealing in bad faith is signing with one person and then making another deal with someone else.  Frankly, this is why tenants don’t go to the MLS to look for rental properties. These tenants have basically been thrown under the bus by this back stabbing double dealing agent. Why was the property even listed once it was rented? At some point deals were being signed. Who thought this was a good idea?

It can happen that an owner signs a lease with someone and they can’t give over the apartment because of a reason out of their control such as a flood or damage or even the old tenant not moving out. That’s not dealing in bad faith, that’s just life sucking.

Just Hope They Don’t Have A Lawyer

Honestly if this tenant lawyers up, you’re going to be in bad trouble, the tenant is not under any obligation to let you out of the lease and if you signed back an offer for sale you might even be reneging on that. I’d say make it your agent’s problem to deal with this. Call them tomorrow and tell them that they created this problem and now it’s their job to fix it. Let them do the squirming and scrambling.

This is completely unethical and illegal and a betrayal of their duty to you, their client.  Hopefully they  can fix this for you. You should not even be in this position.

Hope This Helps



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2 Comments so far ↓

  • devore

    I frequent several real estate related blogs, most of them as a lurker, and this kind of “advice” is sadly very common, much of it given by realtors and self-professed experts. Things like throwing tenants out, changing locks, etc. Completely illegal things.

    In BC, as a renter you only give first month rent and damage deposit. Damage deposit cannot exceed 1/2 monthly rent. It is illegal to request, or offer, to pay more than that. These are very simple and clear cut facts. And yet, is seems most realtors, and amateur landlords (oh that sweet “passive” income, eh?) are completely oblivious of them.

    A lease is a contract. It has very clear and we’ll defined exit conditions. You can’t just make stuff up. Best you can hope for is to offer a sweet deal, and obtain a mutual lease termination agreement. Worst case scenario, you’re either stuck with tenants for a year, or you have to buy the lease out. Figure out which will cost you more money.

    As for realtor advice, wouldn’t trust them any further than I can throw them. I think vast majority of them know nothing beyond what they learned in the evening realtor course, and probably forgot half of it anyways. Considering the kind of money they charge to “guide” you through a transaction, it borders on fraud. These people just know how to fill out forms given by their brokerage, and how to log into MLS.

  • Rachelle

    You’d think knowing about the way to terminate leases and tenancies would be required for being a real estate agent.