Sometimes, tenants will experience hardship causing them to break their lease early. If you want to end your tenancy early, you can do so, however, you may be asked to pay ‘lease break’ costs which can often be expensive.
While it’s best to avoid breaking your tenancy agreement, sometimes situations arise where there is no alternative. This could be due to various reasons that are legally accepted across states.
If you need to end your lease early, the good news is that you have options. Depending on your situation, you may qualify for a legally recognised reason that allows you to leave without paying break fees. And if you don’t meet those criteria, you can still end your lease on your own terms, usually with some costs involved.
In this guide, we’ll walk you through everything you need to know: when break fees apply, when they can be reduced or waived, the key legal terms to understand and the practical steps to make the process as smooth and stress-free as possible.
Key takeaways
- Yes, you can break a lease early, but the costs and conditions depend on your circumstances and your state or territory’s tenancy laws.
- You may end your lease without paying break fees if you meet certain legally recognised grounds, such as domestic or family violence, severe financial hardship, landlord breach, or the property becoming uninhabitable.
- If no legal grounds apply, you will likely need to pay reasonable break costs, which may include advertising, reletting fees and rent until a new tenant is found. NSW and ACT have capped break fees for some fixed-term leases.
- The essential steps include reviewing your lease, checking for legal grounds, giving written notice, understanding applicable fees and preparing the property for handover.
- Breaking a lease may appear on your rental history but rarely affects your credit score if you’ve otherwise been a reliable tenant.
- When in doubt, communicate early, document everything and seek advice to avoid unnecessary costs or disputes.
Can you break a lease early?
Many people may ask whether you can break a lease early and the answer is yes, you can. Ending your agreement early is usually done by giving the rental provider (landlord) written notice of your intention to vacate. In this circumstance, there’s no minimum notice period but it is best if you can provide as much notice as possible prior to your intended vacate date.
Across all Australian states and territories, tenants who have a legally recognised ground for ending a lease early, such as domestic violence, severe hardship, uninhabitable conditions, or landlord breach, can terminate without penalty. However, if these grounds do not apply, the fees and costs will vary depending on the rules in each state.
Some deciding factors in breaking a lease early include:
- The reason for breaking the lease early (e.g., hardship, illness, etc.)
- The laws in the state where you live
- The type of tenancy agreement you have
- The agreement between you and your rental provider
Whatever causes you to break your lease early, it’s important to remain open and cooperative with your landlord to avoid leaving on bad terms. This is even more important if you’re a first-time renter.
What happens if you break a lease?
Breaking a lease early means you are leaving your tenancy agreement before the agreed-upon length of tenancy. Since a tenancy agreement is a legally binding document, breaking it early will mean compensation will probably need to be paid.
In some circumstances, you can end your fixed-term rental agreement (lease) before it finishes without paying ‘lease break’ costs. For example, in Victoria, you can visit the VCAT website and end your agreement early if you are experiencing family or personal violence, without having to pay ‘lease break costs’.
Legal reasons you can break a lease without fees
If you have decided to end your tenancy agreement, the following steps can help you to avoid penalty:
- Undue financial hardship
- If your circumstances change to the point where continuing the lease would cause severe financial strain, you can apply to your local tribunal for early termination.
- The property becomes uninhabitable
- Damage from fire, flooding, storms, mould, or structural issues that make the home unsafe or unfit to live in can justify ending the lease without penalty.
- Landlord breaches the tenancy agreement
- If the landlord fails to meet their legal obligations, such as ignoring urgent repairs, entering without notice, or failing to maintain essential services, you may have grounds to terminate.
- Domestic or family violence
- All states allow tenants experiencing domestic or family violence to end a lease immediately and without penalty. Supporting documentation is required and your bond must be returned.
- Death of a sole tenant
- If the only tenant named on the lease passes away, the lease can be ended without break fees and the estate is not liable for ongoing rent.
How much does it cost to break a lease in Australia?
If you decide to end your tenancy agreement early without a legally accepted reason, break fees and costs will apply. The amount you need to pay depends on the tenancy laws in your state or territory.
In NSW, the rules are very clear because statutory break fees apply to fixed-term agreements of three years or less. The set fees are:
- 4 weeks’ rent if less than 25% of the fixed term has expired
- 3 weeks’ rent if 25%–50% of the fixed term has expired
- 2 weeks’ rent if 50%–75% of the fixed term has expired
- 1 week’s rent if more than 75% of the fixed term has expired
For fixed-term agreements longer than three years, the break fee is not fixed. Instead, the landlord or agent can negotiate an appropriate compensation amount, which may include loss of rent, advertising costs, and reletting fees.
The ACT follows a similar model, also applying capped break fees based on how much of the lease has expired.
For all other Australian states and territories, break lease costs do not follow fixed percentages. Instead, tenants may be responsible for reasonable expenses, which can include:
- rent until a new tenant is found
- advertising costs
- reletting or leasing fees (pro-rated)
- any other reasonable losses directly related to ending the lease early
These costs only apply if the tenant does not meet the criteria for a fee-free, legally approved lease termination. So it is important that tenants carefully coordinate with their landlord.
What to do when you need to break your lease early
If you have decided to end your tenancy agreement, the following steps can help you navigate a seamless and less stressful transition:
1. Understand your rights as a tenant
Many leases have strict penalties for breaking the lease early and it's important to know what you're getting into before making any decisions. By understanding your rights as a tenant, you can negotiate with your landlord and make informed decisions about how to proceed.
Visit your local Tenant’s Union website for advice if you’re unsure of how to proceed with breaking your lease early. This will allow you to be armed with the right knowledge and will help minimise any surprise costs.
2. Check for a legal cause to end your lease early
As mentioned earlier, there are legally recognised reasons for ending a lease early and these can vary from state to state. If you’re leaving due to any of the valid grounds listed above, you generally won’t be required to pay break fees. In hardship cases, it’s up to your local civil and administrative tribunal to determine whether your situation meets the criteria for severe hardship.
3. Give notice to terminate your tenancy agreement
If you can’t or don’t apply for early termination via your local tribunal, then you will need to provide a Notice to Terminate a Tenancy Agreement to your landlord. You can find these forms online. It should include the following:
- Your name and address as well as your landlord’s name and address
- The date of your writing
- The number of days' notice and the day you’re moving out
- Your signature
4. Cover any costs of breaking the lease early
If you do have to cover the costs of breaking your lease, ensure you do so as soon as you can. Depending on your agreement, these costs may include paying rent up until a new tenant moves in, the costs of advertising the property, letting fees, or break fees. You may even need to help your landlord find a new tenant or find someone to sublet from you – which might reduce the costs of breaking your lease early.
In Australia, the cost of breaking a lease depends on each state's legislation; refer to your local government website for accurate information.
5. Moving out
On your move-out date, you are expected to hand over the keys to the property and leave the property in the same condition as when you moved in. You are also responsible for ensuring all your belongings are removed from the property.
Let LJ Hooker help you with the transition
Sometimes, ending a lease early is simply unavoidable. In some situations, you may be able to leave without paying penalties, particularly if you can demonstrate genuine hardship. In other cases, breaking the lease may involve certain fees, depending on your agreement and your landlord’s obligations. And while early termination can appear on your rental history, it rarely impacts your credit score when you’ve maintained a solid track record as a tenant.
If you’re feeling uncertain or overwhelmed by the process, our team is here to help. We can guide you through your options, assist with negotiations and support you in managing a smooth, stress-free transition as you move on to your next home.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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