How To: Break a Lease Early

By Joshua Chadwick March 12th
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In the real estate world, attempting to break a lease is often seen as taboo and is generally frowned upon, but many individuals will agree that sometimes it’s unavoidable.

While applying for early termination of a rental property can cost you a fair bit of money, there are ways to soften the blow and minimise the stress and expense of breaking a lease.

With a bit of transparency and an understanding of state-by-state rules for breaking a fixed-term lease, you’ll be able to terminate your fixed-term tenancy and keep all parties happy whilst doing so.

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Am I Able to Break Lease Early?

Yes, it is possible to break your lease early, as many situations could arise where tenants need to leave the property before the end of the tenancy agreement.

While possible, it is considered a grey area as you’re attempting to break a fixed-term agreement, but through cooperation and understanding, the process should be quite simple in theory.

To start, prepare a written letter of intention that you’re leaving the property, notifying the landlord/property manager that you’re intending on leaving the property before the end date mentioned on the lease agreement.

Ultimately, the decision is yours on how you approach the letter, as the relationship you have with your landlord can differentiate from a stock-standard situation. 

There are a few key points universally that you can touch on. The notice letter should always feature the official address written on the lease, as well as the date of the letter, ensuring you are providing an ample notice period for leaving.

Be sure to also state the reason you’re putting this letter together and the date on which you will be moving out (For more information on preparing a letter to the landlord for ending a lease, check out our blog here).

What Fees Will I Pay?

Unfortunately, there’s no set fee that Australians need to pay for breaking a lease, but instead, it differentiates between circumstances and the state you reside in.

Typically, the soon-to-be-former tenant will need to bear the cost of reletting fees, advertising costs for a new tenant, and any amount of compensation for loss of rent (either until a new tenant resides in the property or when the end of the fixed term agreement occurs).

There also must be reasonable grounds of pricing when the landlord/property manager requests payment, especially when it comes to re-letting costs where the landlord can no longer claim rent once the property is re-let.

If there are any details on fee payments that you’re unsure of, the tenancy agreement that was signed should provide some useful information when it comes to breaking your lease, including your renter’s rights as a tenant.

State Tenancy Law Differences

As mentioned earlier, each state in Australia falls under separate residential tenancies acts with individual break fees when it comes to breaking a lease.

While a majority of the states have similar laws, there are exceptions that all prospective tenants should be aware of before signing a new rental agreement.

Victoria

For victorian tenants, expect to pay one month’s rent based on every full year remaining on the lease (this is capped at six months’ worth of rent).

Should there be any payment issues between the tenant and the landlord, the tenant can apply to VCAT to attempt to break a lease without paying fees (for more information, see the Consumer Affairs website or the Tenants Victoria website).

New South Wales

Those in NSW can activate a fixed lease-breaking fee, however, it must be specified in the lease agreement as an added clause.

You must also include a written termination letter with 14 days notice prior to vacating the premises, along with a termination order.

A termination order will be deliberated to the NSW Civil and Administrative Tribunal (NCAT), which will end your tenancy should the tribunal pass the order.

For more information, see the Fair Trading website for a sample termination notice, or contact the Tenants’ Union of NSW.

Australian Capital Territory

ACT residents follow a similar structure to NSW, however, the lease-breaking fee can be a maximum amount summed up to six weeks’ rent for the first half of the tenancy agreement.

The second half of the agreement will incur a maximum of four weeks’ rent.

For more information, visit the ACAT website or alternatively, check out the Renting Book which highlights all rental laws and legal advice exclusive to the ACT.

South Australia

Those in SA that move out of property early are likely to be subjected to costs incurred for re-letting the property, as leaving property early is considered abandonment.

Landlords/property managers can claim loss of rent until the property is relet, as well as any reasonable advertising costs necessary.

Should there be a rent increase after reletting, the landlord will profit from the lease break and the result should be offset against the payment the former tenant owes for loss of rent.

For more information, check out the SA government website.

Queensland

Tenants in QLD are expected to compensate the owner/property manager for costs incurred due to lost rent.

This would include the usual reletting costs and advertising costs, but the landlord/property manager must mitigate any and all losses.

Should there be any undue hardship or request to terminate the agreement under domestic violence grounds, tenants can make an urgent application to QCAT here.

Western Australia

Any WA tenant is required to give notice of intention to break lease within a minimum notice period of 21 days.

This period, however, is shortened to 7 days for those suffering from family violence.

Fixed leases are also able to be terminated by mutual agreement between all parties without penalty or any issue notice. A written statement showing both the landlord/agent and tenant/co-tenant has come to terms with the amicable lease termination must be presented.

For more information, WA residents can visit the Consumer Protection website.

For any questions about moving home as a whole, we’ve put together the ultimate guide to moving house, which you can check out here. If you’re looking to get an early start on maintaining your new home, check out our home maintenance checklist here.

If you need help getting your utilities connected sorted, please call MyConnect on 1300 854 478 or use the Get Connected form here! All residents from Victoria (VIC), Queensland (QLD), New South Wales (NSW), Australian Capital Territory (ACT), and South Australia (SA) can get connected this very business day. If you’re a first home buyer and you’re unsure about using a utility connection company, this post here can assist you.

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Joshua Chadwick

Joshua Chadwick

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