Breaking a rental lease

Written by in Renting

An empty house after breaking a lease

Not sure what will happen if you break your lease? Tempted just to run away to the dark depths of the Amazon rainforest so you can avoid dealing with this?

Landlords have traditionally held the power in the relationship between tenants and homeowners, but this does not mean you don’t have some rights as a tenant when breaking the lease.

Reasons why you may want to break a lease

There are a range of reasons why a tenant may want to break a lease. For instance, they may have bought a home or may be moving interstate or may even have met the love of their life and want to move in with them as soon as possible.

These sorts of reasons don’t leave you with many options as a tenant.

It depends in what part of Australia you live, but you are often liable for some costs due to the landlord’s need to find a replacement tenant.

Yet, there are reasons why you may have to break a lease, and these are covered by the law.

  1. There may be a breach of an agreement by the landlord.

While your tenancy agreement ensures you take care of the property, a landlord has a responsibility (legally) to make sure the house is habitable and safe and that you have a right to privacy. If you have made repeated efforts to have a major fault fixed (such as moisture damage) and the landlord has made no effort to organise this, you may have grounds to break your lease.

  1. You have suffered what is called undue hardship.

This is open for interpretation, but you may have suffered a number of setbacks in your life, such as injury, or job loss, that make your ability to pay for your lease impossible. A tribunal will consider these when deciding what costs you are liable for.

  1. Your house/apartment is no longer habitable.

A tree falls on top of the house and narrowly misses the foot of your bed while you sleep? That house is no longer habitable and your right to break your lease becomes much more legitimate.

Remember that the decision to break your lease does not have to be an antagonistic one towards your landlord, as long as they have not behaved in a way that breaches the tenancy agreement. Approach the issue first by trying to reach a friendly agreement with the landlord.

A rental lease agreement

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The costs of breaking a lease

Your liability when breaking a rental lease depends on the situation, so there is no easy answer to this question.

If you have no legal reason for breaking the lease (as mentioned above) but want to move because e.g. you are moving interstate, then you may be liable for the remaining rent left in the fixed term lease agreement.

Breaking a lease six months into a twelve month agreement may mean you are liable for those six months of rent.

For this reason, the most common way tenants approach this is by trying to find someone to take over a lease.

You need to check with a landlord if you want to transfer a lease, but in most cases this is fine as a landlord needs a good reason not to allow such a transfer.

Limiting the costs when breaking your lease

If you do think you will be liable for some costs and cannot find someone to take the lease, there are ways to minimise this cost.

  1. If you have six months left on a twelve-month lease, you should reasonably only be expected to contribute 50 per cent of the advertising fees that a landlord pays to find a new tenant. If you have three months left, then you would only be expected to pay 25 per cent and so on.
  2. Ask to see the invoices for a landlord’s expenses in finding a new tenant. A landlord should not make a profit from the situation and is expected by law to keep the costs of finding a new tenant reasonably low.
  3. Approach the landlord in a way where you may come to an agreement on the costs, minimising what you have to spend.

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