Breaking a lease early

When you sign a fixed term tenancy lease you are committing to stay for the full term. If your circumstances change and you want to move out before the end of the fixed term, there could be potential costs involved.

Costs you may have to pay

If you need to end your agreement early, you should give as much notice as you can. The more you can do to help, the less you may have to pay. You should make it as easy as possible for the landlord or agent to show the premises to potential new tenants.

Should your tenancy agreement not include a Break Fee, a landlord may wish to seek compensation for financial loss due to you breaking your lease term early.

These costs may include, loss of rent, advertising and a letting fee (if your landlord uses an agent). If you are unable to mutually agree on the amount of compensation, the landlord may claim from your bond or apply to the NSW Civil and Administrative Tribunal.

Be aware that if you owe more money than the bond your name could be listed on a tenancy database. Such listings can make it difficult to rent again anywhere in Australia.

Break fee

The break fee is a penalty you agree to pay if you move out before the end of the fixed term.

If the fixed term of the agreement is for three years or less the break fee is:

  • Six weeks rent if you move out in the first half of the fixed term
  • Four weeks rent if you move out in the second half of the fixed term.

If the fixed term is for more than three years and you and the landlord agree to include a break fee clause, you can agree on the amount and write it into the agreement.

If your tenancy agreement does not include a break fee, a landlord may still seek compensation by applying to the NSW Civil and Administrative Tribunal. These costs may include, loss of rent, advertising and a letting fee if your landlord uses an agent. If you are unable to mutually agree on the amount of compensation, the landlord may claim from your bond or apply to the NSW Civil and Administrative Tribunal.

Breach by the landlord

If your landlord is not complying with the terms of your tenancy agreement, you may be able to end your lease early without penalty.

If you think the breach is serious enough to justify ending the tenancy, you can give 14 days written termination notice to the landlord. If they disagree, they can apply to the Tribunal.

Alternatively, you can apply to the Tribunal without giving notice. The Tribunal can refuse to make an order if the landlord remedies the breach. If you have already moved out, you may have to pay the costs of breaking the lease.

Breaking the agreement without penalty

In limited circumstances, you can break the agreement early without penalty. You can give 14 days written notice to end an agreement early if:

  • you have accepted an offer of social housing (eg. from Housing NSW)
  • you need to move into an aged care facility or nursing home (not a retirement village)
  • you have obtained a final apprehended violence order against somebody you were living with that excludes them from the property
  • the landlord has put the premises on the market for sale, and you were not told before signing the lease that the property would be sold.

You can give 21 days written notice to end an agreement early if:

  • you have a fixed term agreement of more than 2 years and you have been given a rent increase notice or
  • your co-tenant passes away.

If you give notice for any of these reasons you are not required to pay compensation. You are only liable for the rent until your notice ends and you hand back possession of the premises.

Mutual consent

If the landlord and tenant mutually agree, any tenancy agreement can be terminated at any time.

Hardship

If it would cause you undue hardship to stay in the premises until the end of the fixed term, you can apply to the Tribunal to end the lease early. You can ask for an urgent hearing but will need to keep paying the rent.

You will need to prove that your hardship is severe and serious and did not exist when you signed the lease. If the Tribunal agrees that your tenancy can end early, penalties may still occur.

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