A Guide to Breaking A Rental Lease
Sometimes, life happens, and there might come a time when you have to consider breaking your rental lease early. For example, you might need to move interstate for a job or have broken up with a partner with whom you share a rental property.
Unfortunately, breaking a rental lease isn’t always straightforward, and there are many things you need to consider before and after.
In this easy guide, Jacaranda breaks down everything there is to know about breaking a lease: the costs involved, the implications of doing so, and tips to make the process go smoothly.
Originally published 11 June 2021.
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What is a rental lease?
A rental lease is a binding agreement between a landlord and a tenant outlining the terms and conditions for renting a property. Typically, a lease specifies the duration of the rental period, the amount of rent to be paid, and the rights and responsibilities of both parties.
A rental lease protects the landlord’s interest in their property and the tenant’s right to use and enjoy it without undue interference.
Fixed-term lease vs. periodic lease: What’s the difference?
There are two (technically three) different types of lease agreements in Australia: periodic leases and fixed leases (short and long).
Periodic leases, also known as month-to-month leases, mean that you can terminate the lease at any time by giving written notice within the required period. These types of leases can offer flexibility to tenants and property owners as they require no set end date, but can also come with a lack of certainty.
However, breaking a fixed-term lease is more challenging. A fixed-term lease has a specific start and end date. Once you've signed this lease, you're committing to stay for that period and are bound by its terms and conditions.
Short-fixed-term agreements are usually six months or fewer leases, while a long-fixed-term lease tends to be for a year or more.
Can you break a rental lease?
You absolutely can break a rental lease, whether you’re a tenant or the owner. Sometimes, life throws a curveball, necessitating the early termination of a lease.
However, breaking a lease isn’t a decision that should be made lightly. It can accompany a number of fees, costs and even implications for your future rental applications.
How do you break a rental lease in each state?
The laws around breaking a lease vary between states or territories. There are also several legally specified reasons for early termination of a lease, which we discuss in detail later.
We've broken down the general rules for breaking a rental lease in each Australian state or territory below.
In NSW, tenants can be charged a 'break lease fee' if specified in the agreement. If you decide to terminate early, you must:
- Give at least 14 days written notice for a fixed lease (21 days for a periodic lease).
- Apply to the NSW Civil and Administrative Tribunal (NCAT) for a termination order if required.
In Victoria, landlords can charge tenants up to one month's rent for each year remaining on the lease, capping at six months.
Victorian renters must give their landlord or property manager 28 days' written notice if they want to leave at the end of a rental agreement.
As of 1 September 2023, new rental laws will be in effect in Queensland. For general tenancies, termination requirements now include:
- Providing written notice at least 14 days before vacating (both periodic and fixed agreements)
- Applying to respective legal bodies if necessary.
The minimum time required for written notice from tenants in South Australia is 28 days for a fixed agreement and 21 days for a periodic agreement.
When a tenant vacates a property early in South Australia, it is considered to be abandonment. If the rent hasn't been paid in full, the owner can claim re-letting costs for the property.
Despite this, the tenant has the right to ask the following questions:
- Has the property been advertised properly?
- Has the demand in the area dropped, and, therefore, should the rent have been reduced?
- Is the property being shown to prospective tenants?
In WA, tenants on periodic agreements must give at least 21 days' notice in writing with their intention to break the lease. For fixed-term agreements, that notice period jumps to 30 days.
In addition, there are special considerations for people suffering from family violence, reducing this timeframe to seven days.
Tasmanian tenants must give at least 14 days written notice for periodic and fixed-term leases. After vacating in Tasmania, tenants aren't responsible for tasks like cleaning or gardening, unlike in other states.
As with Tasmania, breaking a lease in the ACT requires 14 days of written notice for both leases. There's no fixed break-lease fee in the ACT, but the compensation you may be required to pay for rental losses and other associated costs are capped:
- Loss of rent is limited to 25 weeks of rent or until the end of the agreement (whichever is less).
- Re-letting and advertising costs are capped at a maximum of one week's rent.
Tenants in the Northern Territory must also give a minimum of 14 days written notice to their landlord. If early termination is rejected in NT, the security deposit might cover lost rent or re-letting costs. The tenant may be liable for the difference if costs exceed the deposit.
What are the legal reasons for breaking a lease?
Without a reasonable legal reason for breaking your lease, your early vacate could be considered abandoning the tenancy. Common legal reasons for breaking a lease generally include the following.
Sometimes, remaining in a tenancy can result in ‘undue financial or personal hardship’. Examples of this may include losing your job and being unable to afford the rent or facing a severe medical condition that makes the location or nature of the property unsuitable for your needs.
Many states and territories allow tenants to break a lease under these circumstances, although evidence may be required, and compensation might still be on the table.
Breach (or repeated breaches) of the agreement by the landlord
The landlord failing to uphold their end of the lease agreement might provide grounds for a tenant to terminate the lease early. Examples of such breaches include not attending to critical repairs, failing to maintain security by providing working locks or violating the tenant's right to privacy by dropping in unannounced.
In some areas, a single breach might not be enough; repeated breaches might be required to break the lease without legal penalties.
The premises become uninhabitable
A rental property must be safe and fit for living. Suppose conditions arise that make the property uninhabitable – think severe water damage, electrical hazards, or infestation – and the landlord doesn't rectify the situation promptly. In that case, a tenant might have grounds to terminate the lease.
Documenting these conditions and communicating with the landlord or property management regarding any concerns is essential here.
Laws in many regions recognise the need for victims of domestic violence to be able to break their leases without financial penalty. If a tenant is experiencing domestic violence, they might be able to provide evidence (such as a restraining order or a letter from a supporting professional) to break the lease without facing the standard financial consequences.
It's crucial for victims to know their rights and to seek support when making decisions related to housing and safety.
What are not legal reasons for breaking a lease?
Personal preferences, minor disputes, or changes in personal circumstances usually don't qualify as legal reasons for lease termination.
The usual terms of your lease - and the associated costs - will likely still apply if, for example, you need to move for work or have a falling out with your housemate.
Does it cost anything to break a lease?
Terminating a lease agreement early comes with a range of costs. There is no set fee for breaking a lease in Australia, but some costs you can typically expect include:
- Reasonable re-letting costs (the cost of finding a new tenant);
- Reasonable advertising costs;
- Compensation for loss of rent (until a new tenant starts paying or the original lease ends).
If you live in New South Wales (NSW), you may be required to pay a ‘break lease fee’ if this is specified in the lease. For leases under three years, the set fee payable is:
- Four weeks’ rent if less than 25% of the agreement has expired.
- Three weeks’ rent if 25% or more but less than 50% of the agreement has expired.
- Two weeks’ rent if 50% or more but less than 75% of the agreement has expired.
- One week’s rent if 75% or more of the agreement has expired.
In line with these costs, the landlord must take reasonable steps to re-let the property and cannot continue to claim on these once the property has been rented.
Does breaking a lease affect my future rental applications?
Unfortunately, a future landlord can find out if you break a lease through rental references and history. However, if you had a reasonable reason for breaking your lease and have an otherwise pristine rental history and good references, it might not cause any real problems.
To ensure that you remain on good terms with a landlord, even after breaking a lease, it’s important to ensure that you follow the correct procedures for breaking the lease. Specifically, ensuring you continue to keep up-to-date on rental payments and other costs associated with breaking the lease is important.
Not doing so is considered a breach of contract and can cause you to be listed on a tenancy blacklist. This will make finding a new rental extremely difficult, as it is a site used by most property managers (like a credit check for lenders) to verify the viability of a rental tenancy application.
Tips for breaking a lease smoothly
There are a few things you can do to ensure the process of breaking your lease is as pain-free as possible.
Read your lease carefully
Your tenancy agreement outlines all the rules of your lease, so you should check for any “early termination” clauses. Keep an eye out for terms like “early release”, “sub-let”, and “re-let”, as these are common terms used when referring to breaking a lease. This clause will outline any costs of breaking the lease and any rules regarding renting your room or property to another person.
Communicate openly and clearly with your landlord
At the end of the day, breaking a lease happens. When it does, it’s important to give your written notice as soon as possible so they can begin finding a new tenant.
A lease can sometimes be broken without penalty if a mutual agreement is reached. If you reach a mutual agreement with your landlord or property manager, make sure you get this in writing.
Each state and territory has suggested templates or forms you can use when writing to your landlord to break the lease. These templates will generally include information such as your reasons for breaking the lease, the date you intend to vacate the property, the full address, and more.
You can access these templates by clicking the links below:
Find a new tenant as soon as possible
In most cases, finding a new tenant to move into the property will be your responsibility, and you could be on the hook for the rent until a new one signs the lease.
You could save money and time by finding a new tenant to take over your lease. It's even better if you have someone lined up already! If you haven’t, sites like Flatmates.com.au are your friend.
Check your state or territory legislation around finding a new tenant, specifically in updating tenancy agreements, transferring bonds, and the period that you’re liable for covering the rent.
Know your rights as a renter
Knowledge is power, and in the realm of rentals, understanding your rights as a tenant can greatly assist you in breaking your lease.
It sounds basic, but thoroughly reading and understanding your lease before making any major decisions is essential. If there's anything you don't understand, seek further clarification.
Each state or territory has a tenants’ support service available, which we’ve linked to below if you need advice or advocacy:
- QLD: Tenants Queensland
- NSW: Tenants’ Union of NSW
- ACT: Tenants’ Union ACT or Tenancy Advice Service ACT
- VIC: Tenants Victoria
- TAS: Tenants’ Union of Tasmania
- SA: RentRight SA
- WA: Circle Green Community Legal
- NT: Tenants’ Advice Service
Need help paying a rental bond?
You could be on the hook for additional costs if you break your lease. That’s on top of likely having to pay a new rental bond at your next property, which can be hundreds if not thousands of dollars!
While you can get this money back at the end of your next lease, it’s often a lot of money to part with at once. That’s where we come in.
Instead of dipping into your hard-earned savings, a rental bond loan with Jacaranda Finance lets you repay that money over manageable instalments starting from 9 months!
See below for more detailed information on rental bonds in each state/territory, or click here if you’re ready to apply. An application only takes a few minutes!1
|NSW Rental Bond Loans||VIC Rental Bond Loans|
|QLD Rental Bond Loans||TAS Rental Bond Loans|
|WA Rental Bond Loans||SA Rental Bond Loans|
|NT Rental Bond Loans||ACT Rental Bond Loans|
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