Breaking lease with Defence Housing - please advise!

Hi everyone!
We have to go overseas and meanwhile would like to rent our property to the DHA (Defense Housing Australia)
They did inspection on our property and gave us an offer with the minimum term for DHA lease is 6 years. As we have to lodge DHA caveat to our property we will be bounded by law to DHA.
We asked DHA what if something happened and we need to come back in Australia earlier (reasonably) or we could not settle overseas, and they answered that it is possible to break lease if circumstances such as financial hardship are demonstrated, each circumstance is examined and decided by management.

Has anyone had an experience or know something about breaking lease or terminating contract with DHA?

Thanks in advance for your help!

It may be to your advantage to just rent a place if you need to come back early.

The DHA leases are essentially commercial contracts. I don't recall what they say about this sort of thing, but looking to regular residental real estate law may not apply.

I have a friend who was in this situation. When he came back from overseas he had to buy a new house. The lease with DHA is very strong.

Its pretty much impossible to break them. Also beware of the 'Option' period (usually 3 years). In our area they nearly always take up the option and there is sweet FA you can do about it.

like my mate who signed up a 10 year GEHA lease on his 4x2 karratha property at $650 a week indexed to CPI... ouch! comparable rent now $2100pw

On the +ve side, you don't need to worry about any tennant issues or REA issues. Especially if you are going overseas!

Ausprop said:

like my mate who signed up a 10 year GEHA lease on his 4x2 karratha property at $650 a week indexed to CPI... ouch! comparable rent now $2100pw

Click to expand...

Trap for young players - sure the cashflow and long-term lease look good but unless you have a market rent review clause in there every 3-5 years you can be left way behind. Of course, the trick is knowing how to draft the clause and whether or not to impose the market review or allow it to lapse (esp if market has gone down).

I understand DHA rents are marked to market each year ... An independent valuer is meant to establish the market rent at the end of each year. Whether it's err on side of conservatism may be another issue tho

Cheers
T

Why enter into a 6 year contract when you think you may want to break it?

What about leasing your property out normally and then when you get settled approach DHA.