Breaking your Lease

 Sometimes life isn’t as predictable as what we thought it would be and you might find that you will be moving house sooner than expected.  If you are renting it can be a little challenging to navigate what to do if you need to move out early!

If you are in a fixed term lease and you find your self in a situation that you will be moving out before your lease expires, this is what we call a ‘Break Lease’.

Let’s say your current lease runs from 1 January 2022 to 31 December 2022 and you have just landed a job interstate which means that you will be moving out on 15 October 2022.  Ending your lease early is likely to involve a break fee penalty that you are responsible for paying.

How do Break Fees work?

If you are breaking your lease you will need to pay rent up to and including the day you move out, then you will need to pay your break fee on top of this.

How much will my Break Fee be?

The first port of call is to check your lease agreement, the break fees will be explained in this document.

In NSW the fee amount will depend on a few factors including how long your current lease agreement is and how far through this period you are.

For those that are in leases that are less than 3 years then your break fee will be between 4 weeks rent and 1 weeks rent – depending on how far through your lease you are.  If you are breaking your lease during the first quarter then the break fee will be 4 weeks rent, the second quarter will be 3 weeks rent, the third quarter will be 2 weeks rent and the last quarter will be 1 weeks rent.

Looking at the example about the 12 month lease then this illustration gives you an idea of the break fee penalty amount.

How do I give notice that I will be breaking my lease?

You will need to give notice in writing to your agent or landlord and generally the best way to do that is by email.  You don’t need to provide any special forms or documents; you just need to let your Agent know that you will be breaking the lease and what day you will be moving out and handing back the property.

How much notice do I need to give?

Technically none at all, you could just come and hand your keys back and provide your written notice on the day.  However your agent will be most grateful for as much notice as you can possibly provide. There is a lot of work that goes on in the background and the more time they have to prepare the better.  Don’t ever feel that this is something you should hide or delay sharing with your Agent. In my experience open communication can make everything run more smoothly.

Breaking your Lease without penalty

This article is specifically for Residential Tenancy Agreements under 3 years in NSW, and there are some situations where a break fee can be avoided. Specifically, a tenant can provide 14 days written notice and end their lease without penalty if:

  • They are moving to an aged care facility or nursing home
  • They have accepted an offer of social housing
  • The property has been put on the market for sale during the fixed term (and the tenant did not know before entering the lease)
  • The property becomes listed on the Loose Fill Asbestos Insulation register during the tenancy or was previously listed without the agent or landlord disclosing this information to the tenant.

There are also special provisions for victims of domestic violence and hardship that will impact on the Break Lease fee that we haven’t covered here.

If you have any questions about a Break Lease situation, please don’t hesitate to reach out as the Rightside Team will be happy to discuss this in more detail.

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