Real Estate

First year lease useless/pointless?

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  • Dec 16th, 2018 1:07 pm
[OP]
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Jun 26, 2005
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First year lease useless/pointless?

My friend (a landlord) just told me his tenant after 7 months has told (email) him that they are leaving, their job is sending them out of Toronto. So they can do assignment or let them just leave.

My friend says he'd rather search for a tenant himself rather than the tenant find someone. That new tenant could be bad, who knows. My agent also tells me, he knows from speaking with the board, that a landlord can only reject a tenant's assignment if the potential new tenant has HORRIBLE credit history. If not, the landlord has no grounds to reject the assignment's new tenant.

So, bascially, is this first year lease contract useless/pointless?
10 replies
Deal Addict
May 12, 2014
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Montreal
rfdrfd wrote: So, bascially, is this first year lease contract useless/pointless?
Going by your own post, I'd say it's not at all useless (it at least gives a higher chance of finding a replacement tenant). But it's just not "very good" protection.

Things are very different in Quebec. There, contracts are expected to be rigidly adhered to, by both sides.
Deal Addict
Dec 4, 2016
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Well, the tenant finds someone to take the lease, and even get a finder's fee from it. If the landlord chooses the reject the new tenant, a reason would have to be given. Remember the whole discussion on never giving a reason for not choosing a tenant?

If a tenant leaves, count your blessings that they don't assign it to some professional tenant from hell, and start looking for good tenants.
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Jul 14, 2008
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rfdrfd wrote: My friend (a landlord) just told me his tenant after 7 months has told (email) him that they are leaving, their job is sending them out of Toronto. So they can do assignment or let them just leave.

My friend says he'd rather search for a tenant himself rather than the tenant find someone. That new tenant could be bad, who knows. My agent also tells me, he knows from speaking with the board, that a landlord can only reject a tenant's assignment if the potential new tenant has HORRIBLE credit history. If not, the landlord has no grounds to reject the assignment's new tenant.

So, bascially, is this first year lease contract useless/pointless?
I’m still ok with a 1 year lease because for most people, they’ll at least consider their obligation to stay for the whole year. Provides some stability.

I would never tell a tenant, but I wouldn’t penalize them for leaving early because, as others mentioned, I don’t want them screening a tenant for me. And if you’re in a position of restricted rent control, it allows you to recoup any other costs that may have creeped up during the lease (or subsequent 1 year leases being limited to inflation increases only).

The tenant may consider your lack of penalty a kind gesture, wish them well, etc. It also allows you to evaluate if you should sell the property or not, which I would never do tenanted (or strongly avoid). And assuming it doesn’t change, you avoid having to pay them anything or run afoul with the Board with bogus excuses for eviction.
[OP]
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Jun 26, 2005
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Agreed.

So I sign a 2 year iPhoneXR contract with Rogers, then after 6 months I say to Rogers sorry I hate your plan, I'm leaving. Rogers says "ok, no problem, I thank you for being a customer, bye bye"

That's what I mean by this 1 yr contact is useless. May as well not have one.

onlineharvest wrote: I’m still ok with a 1 year lease because for most people, they’ll at least consider their obligation to stay for the whole year. Provides some stability.

I would never tell a tenant, but I wouldn’t penalize them for leaving early because, as others mentioned, I don’t want them screening a tenant for me. And if you’re in a position of restricted rent control, it allows you to recoup any other costs that may have creeped up during the lease (or subsequent 1 year leases being limited to inflation increases only).

The tenant may consider your lack of penalty a kind gesture, wish them well, etc. It also allows you to evaluate if you should sell the property or not, which I would never do tenanted (or strongly avoid). And assuming it doesn’t change, you avoid having to pay them anything or run afoul with the Board with bogus excuses for eviction.
Newbie
Dec 11, 2018
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FrancisBacon wrote: Things are very different in Quebec. There, contracts are expected to be rigidly adhered to, by both sides.
Actually you can assign the lease in QC. In fact due to BS nature of the QC system it is probably the only way to get out of lease at anytime. When I was leaving gave my landlord exactly the same choice: I will assign the lease or he will look for a new tenant (this was not the first year but in QC every year is the first year). Of course he wanted me to pay for the rest of the year, I said OK, I will find somebody and assign the lease. He agreed to break the lease.
Deal Fanatic
Jun 26, 2007
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???
rfdrfd wrote: Agreed.

So I sign a 2 year iPhoneXR contract with Rogers, then after 6 months I say to Rogers sorry I hate your plan, I'm leaving. Rogers says "ok, no problem, I thank you for being a customer, bye bye"

That's what I mean by this 1 yr contact is useless. May as well not have one.
Uhhh, what? Rogers subsidizes that phone you know. When you walk away they lose that money they spent to subsidize it. Plus you take with you the iPhone.
Deal Addict
May 12, 2014
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archxulin wrote: Actually you can assign the lease in QC. In fact due to BS nature of the QC system ..., I said OK, I will find somebody and assign the lease. He agreed to break the lease.
Yes, the lease can be assigned, but only with the consent of the landlord (can only refuse for valid reasons).

I don't see why he didn't want you to find an assignee, unless you were paying under market.

It's not as if you can pick anyone with terrible credit and he's stuck with your choice.

Overall I find it to be a better and fairer system than Ontario.
Newbie
Dec 11, 2018
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FrancisBacon wrote: Overall I find it to be a better and fairer system than Ontario.
Leases renewing for full 1 year term (technically not required but most leases are like that) is very limiting. Pretty much you should start a new job on July 1 only. I was on "normal" July 1 renewal, I think it was year 3 or 4. Got a job offer in August that required me to relocate. His idea was that I would pay for the remaining 9 months of the lease and he would take care of finding a new tenant. Yeah right. Well, he was a strange cookie: this was 4.5 (I think that is what you guys are calling it), he did not want any family, only white people (no kidding). I was very opened to work with him e.g. help find but give him some option to veto but he did not want any of it. But certainly I would not pay for 9 months and let him rent it out.

I've been tenant in ON, QC, and BC and QC was the worst (possibly I might be biased due to this specific landlord :-) ). I find it so much more common sense to have 1 year lease and renew with 2-3 month notice required. And the whole July 1 moving day non-sense on top of it. QC=stasis. That's why they need 13 billion dollars a year from the rest of Canada to keep afloat.

Talking about how the first year lease is useless/pointless: landlord can give you notice to occupy the property at any time and no lease will protect you. The thing is: no law can make people to be decent and act with consideration for other people . The house we were renting in BC went on market in month 8 of our 18 month lease. Only because landlord insistent and new owners agree to honour the lease (not really enforceable) we could stay until the end of the lease.
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May 12, 2014
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I think your perception of QC rules is tainted by your bad landlord. His conditions were illegal and unenforceable and could have been ignored.

The July 1st thing is not a law of course, just a habit. Like big sales on black Friday.

In QC a 1 (or 2 or 99) year lease would certainly protect you from being evicted even if the landlord wants to sell or live in the place.
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Oct 23, 2003
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I've broken off a lease after 10 months and it was fine BUT:

1. I gave the landlord something around 100 days heads up ahead of breaking said lease (i knew i had to leave way in advance)
2. I opened up my place for new tenants to come and see, pretty much whenever I was home
3. I was fairly well engaged with the landlord, talking to him once every couple of months, aka did not treat him as a total stranger

He was afraid he might not get another renter in time, I ended up selling up the place for him, and the new guy paid $100 more per month than me. (I have fairly nice furniture and collect art, which helps)

Recently checked online and i saw the landlord sold the place. My guess is he saw the market slow-down coming, and started cutting from his property portfolio. Also didnt have to deal with rent management anymore, after doing it for 4 years or so. Think he made a $150-200k or so profit on the place, in terms of price, no idea what it came down to after paying off transaction expenses.

So, a 1 year lease is still quite useful, but it comes down to the people involved. If you're a landlord and you're flexible, assuming you are dealing with a good tenant, there's nothing to lose, arguably, in most cases you gain; when someone leaves early. Based on personal experiences, it pays more to work with the tenant, than work against them, if they're actually reasonable people.

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