Hahn & Hahn

Cancelling Lease Agreements – Can My Landlord Charge Me Penalties?

Posted in: Consumer Protection Law
Written By: Isabella Mazzone

Firstly, how can I cancel my lease agreement early if there is no termination clause?

 

What does the law say about a tenant terminating their lease agreement early?


What exactly is a reasonable penalty fee?

“(2) For purposes of section 14(3), a reasonable credit or charge as contemplated in section 14(4)(c) may not exceed a reasonable amount, taking into account -

(a) the amount which the consumer is still liable for to the supplier up to the date of cancellation;

(b) the value of the transaction up to cancellation;

(c) the value of the goods which will remain in the possession of the consumer after cancellation;

(d) the value of the goods that are returned to the supplier;

(e) the duration of the consumer agreement as initially agreed;

(f) losses suffered or benefits accrued by consumer as a result of the consumer entering into the consumer agreement;

(g) the nature of the goods or services that were reserved or booked;

(h) the length of notice of cancellation provided by the consumer;

(i) the reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the cancelled reservation; and

(j) the general practice of the relevant industry.

(3) Notwithstanding subregulation (2) above, the supplier may not charge a charge which would have the effect of negating the consumer’s right to cancel a fixed term consumer agreement as afforded to the consumer by the Act.”

In general practice, the factors that are considered greatly include:

It is really important to note that the landlord must prove that they attempted to mitigate their damages and took positive steps to find a new tenant. In general, an amount equal to 2 months rental is awarded if the landlord is unable to find a new tenant.

What should I do if a dispute arises between myself and the landlord due to the early cancellation?