Carnelian Property Management Newcastle
  • Home
  • About
    • Get To Know Us
    • What we do
    • Where We Work
  • Rental Appraisal
  • Switch to Us
  • Contact
  • Now Renting
  • Blog
  • Search 🔍
We provide expert investment property management in Newcastle and Lake Macquarie. If you find this article helpful or enjoyable, please subscribe or share it with someone else who may benefit.

What Happens When A Tenant Wants to Break A Lease Early?

20/9/2018

0 Comments

 
tenant breaking lease early - carnelian property management newcastle
​When a tenant signs a fixed term lease, they are providing a commitment to remain in the property for the full term. This provides the landlord a degree of stability and security, knowing that the weekly rental income can be counted on for the duration of the agreed period. 

Sometimes however, a tenant may need or wish to break the lease early. While this is possible to do, there are usually costs involved for the tenant as well as the otherwise unanticipated time and effort to put the property to market, run open inspections, and so on to find a replacement tenant. 

How Does A Tenant Break A Lease?

A tenant wishing to break their lease should provide as much notice as possible in writing of their decision to leave. This allows maximum time for the landlord and agent to consider and plan the actions they will take as a result.

This may include the landlord considering whether they will continue to rent the property as is, plan for renovations earlier than expected, or even move back in themselves.

Additionally, time and effort is required to prepare and place the property on the market through advertising, while enabling plenty of opportunity for the agent to show the property to potential new tenants before the planned vacate date. 

A longer notice period of the intention to break the lease can also help to minimise the amount payable by the tenant for breaking the lease early. 

How Much Does A Tenant Have To Pay If They Break A Lease Early?

​A lease will often include details of a break fee. The break fee is a penalty the tenant agrees to pay if they 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 the tenant moves out in the first half of the fixed term
  • Four weeks rent if the tenant moves out in the second half of the fixed term
​
If the fixed term is for more than three years and both the tenant and the landlord agree to include a break fee clause, this amount can be written into the agreement.

If the lease does not include a break fee, the landlord could still be entitled to compensation from the tenant including loss of rent, advertising costs and a letting fee (payable if your landlord uses an agent). If a mutual agreement cannot be reached prior, the landlord may claim from the tenant's bond or apply to the NSW Civil and Administrative Tribunal to have the matter resolved. 

Tenants must remember that if more money is owed than remains in the bond, their name/s may be listed on a national tenancy database making it difficult to rent elsewhere throughout Australia. In addition, real estate agents typically obtain rental references from a tenant's previous agent when assessing potential applicants for a property. Skipping out on unpaid money is definitely a bad idea!

Can A Tenant Can Break A Lease Without Needing To Pay Money?

​In limited circumstances, it is possible for a tenant to break a lease early without penalty. 

A tenant can give 14 days written notice to end an agreement early if:
  • the tenant has accepted an offer of social housing (eg. from Housing NSW)
  • the tenant needs to move into an aged care facility or nursing home (not a retirement village)
  • the tenant has obtained a final apprehended violence order against somebody he/she was living with that excludes them from the property
  • the landlord has put the premises on the market for sale, and the tenant was not told before signing the lease that the property would be sold.

A tenant can give 21 days written notice to end an agreement early if:
  • the tenant has a fixed term agreement of more than 2 years and has been given a rent increase notice or a co-tenant passes away

If notice is given by a tenant for any of these reasons, the tenant is not required to pay compensation. In these instances, the tenant is only liable for the rent until the notice ends and possession of the premises is handed back to the owner.

Request to End A Tenancy Early Due To Hardship

Outside of the above scenarios, a tenant can apply to NCAT to end a lease early if it can be shown that staying in the premises until the end of the fixed term would cause undue hardship. Note that in this circumstance, rent must continue to be paid by the tenant and penalties may still occur even if it is agreed the tenancy can end earlier than agreed. 

Further information on breaking a lease early can be found on the NSW Fair Trading website.
Got a Question? Ask Us
We provide expert investment property management in Newcastle and Lake Macquarie. If you found this article helpful or enjoyable, please subscribe or share it with someone else who may benefit.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Carnelian Property Management Newcastle NSW

    We are a family-owned and run Newcastle real estate agent offering expert property management across Newcastle and Lake Macquarie. 
    ​Get to know us here.


    Want More?

    Build your property management knowledge - get regular tips and advice for landlords and tenants straight to your inbox.
    Subscribe

    Contact Us

    Call Carnelian Property Management Newcastle
    Call now 0407165126
    email Carnelian Property Management Newcastle
    email now
    Tap to SMS

    Archives

    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017


    Categories

    All
    Advertising
    Choosing An Agent
    Insurance
    Investment Property
    Lake Macquarie Life
    Landlord Responsibilities
    Lease Terms
    Negative Gearing
    Newcastle Life
    Pets
    Positive Gearing
    Preparing A Rental Property
    Property Management Costs
    Property Management Newcastle
    Property Management Statistics
    Rental Appraisal
    Rental Yield
    Routine Inspections
    Saving Money
    Suburb Profiles
    Tenant Responsibilities


    RSS Feed

Carnelian Property Management Newcastle - on Facebook
Carnelian Property Management Newcastle - on Instagram
Carnelian Property Management
2/59 Hexham St KAHIBAH NSW 2290
m: 0407065126
Subscribe to email
​Request a rental appraisal
Rental application form
Submit a maintenance request
​Cleaning checklist

Copyright © 2019 Carnelian Property Management | Newcastle NSW | ABN 18 624 074 077.
Carnelian Property Management Newcastle - on Facebook
Carnelian Property Management Newcastle - on Instagram
Subscribe to email
Request a rental appraisal
Rental application form
Submit maintenance request
Cleaning checklist
Carnelian Property Management
2/59 Hexham St KAHIBAH NSW 2290
m: 0407065126

​
Copyright © 2019 Carnelian Property Management | Newcastle NSW
​ABN
18 624 074 077
  • Home
  • About
    • Get To Know Us
    • What we do
    • Where We Work
  • Rental Appraisal
  • Switch to Us
  • Contact
  • Now Renting
  • Blog
  • Search 🔍