Breaking up the right way – what to do if you need to break your lease

At some point, you may find you need to break your lease and move out of your rental property earlier than planned. For example, you might have to relocate for work, perhaps your financial situation has changed, or you are going through a relationship breakdown. Or the property you are renting may be up for sale, and you’re wondering if you need to break the lease and look for a new rental.

It happens, things change, but if you need to end your lease early there is a right way to do it.

Periodic tenancy

If you have a periodic tenancy agreement, things are pretty simple. You can end the agreement without a reason, you just have to give at least 21 days’ written notice.

Fixed-term tenancy

There are more steps to ending a fixed-term agreement but it’s still fairly straightforward.

The first thing you should do is speak to your property manager to discuss your obligations and seek the owner’s consent (through the property manager) to end the lease without further payment. You will need to get their consent in writing.

Unless otherwise agreed, you will be required to continue with your lease obligations until the end of the tenancy.

Be aware that when you break a lease the property owner will want to be no worse off and can claim financial losses that are a direct result of the break. They do have an obligation to take reasonable action to minimise such losses.

Examples of the types of costs that come with a break lease claim include, but are not limited to: rent, gardening, pool maintenance, advertising expenses associated with finding a new tenant, and the unexpired portion of any leasing fee charged by the property manager to the property owner.

These costs may be claimed until a new tenant moves in or the original tenancy expires. However, the property owner is required to take all reasonable steps to find a new tenant as soon as possible.

You must also give the property owner a forwarding address.

There is an exception to these rules. Tenants affected by family and domestic violence can give a minimum seven days’ notice for both fixed and periodic tenancies and move out immediately. They must provide evidence and the required notice of termination.

What happens if the property you are renting is for sale?

REIWA’s free Information Service has received a lot of calls recently from tenants wondering if they should break their lease because the property they are renting has been put on the market. They are worried about being left without a home when the property sells.

If you are on a fixed-term lease the new owner must honour that agreement. You are entitled to stay in the home until the lease expires. If they plan to move in at the end of the lease they must give you the appropriate amount of notice (30 days) before the lease expires.  However, both parties may come to an agreement to end the lease early. Alternatively, the home may be bought by an investor and they may choose to renew the lease when it comes to the end of its term.

If you have a periodic lease and the sales contract involves handing over vacant premises on settlement, you must be given a minimum 30 days’ notice. If the home is bought by an investor and at a later date they want to end the lease, they will need to give you 60 days notice.

If you find you need to break your lease and want some guidance, contact REIWA’s free Information Service on 08 9380 8200 or email [email protected] (business hours are Monday to Friday 9am to 5pm).