TABLE OF CONTENTS
General Information
You will often hear of a term used by agents where they say "my tenant is breaking their lease". The truth is the lease isn't breaking nor is the new tenant going to "take over" the existing lease.
Where a tenant wants to move out before the end date noted on their fixed term agreement, the tenant is ending their agreement early. Generally speaking in this situation, in some states, a tenant would be responsible to reimburse the owner for any out of pocket expenses that the owner should not have had to incur (advertising costs, letting costs etc.). In other states, break lease expenses are limited to rent payable until a new tenant is found.
When looking to replace a tenant/resident that has ended an agreement early, property managers/owners must take all reasonable steps to mitigate the loss or expense to the tenant
PLEASE NOTE: The below information is subject to change. You should always seek current & relevant information as per legislation in your state.
For advertising & letting costs incurred by the owner in a break lease situation:
At no stage does the agent "charge the tenant" for a letting cost or for advertising. The tenants will always be reimbursing the owner for out-of-pocket expenses in this situation.
Ultimately the landlord will have an expense on their statement (as per the terms of the management agreement) and the tenant will then reimburse them for these costs.
Break Lease Compensation in each State
Queensland
Reletting costs are used by a property manager/owner to support the reletting of a property (finding a new tenant) when a tenant/resident ends a tenancy agreement early. Reletting costs are calculated based on how much of a fixed-term tenancy agreement remains.
Reletting costs for fixed-term tenancy agreements entered into on or after 30 September 2024 are calculated based on how much of the tenancy agreement has expired, or rent payable until a new tenant/resident moves into the property, whichever is the lesser amount. No additional reletting costs can be requested from a tenant/resident.
For further information, please refer to the following webpage & RTA reletting costs calculator:
https://www.rta.qld.gov.au/ending-a-tenancy/ending-a-tenancy-agreement/reletting-costs
New South Wales
Tenant breaking a fixed-term agreement signed after 23 March 2020
For agreements of 3 years or less
Mandatory break fees may apply, which are payable based on the stage of the agreement.
If the mandatory break fee applies, the set fee payable is:
- 4 weeks' rent if less than 25 per cent of the agreement has expired
- 3 weeks' rent if 25 per cent or more but less than 50 per cent of the agreement has expired
- 2 weeks' rent if 50 per cent or more but less than 75 per cent of the agreement has expired
- 1 week's rent if 75 per cent or more of the agreement has expired.
For agreements of more than 3 years
The landlord or agent may negotiate an agreed amount of compensation for their costs with the tenant.
These costs may include loss of rent, advertising, and a letting fee if the landlord uses an agent.
There are different rules for tenants breaking a fixed-term agreement signed before 23 March 2020.
For further information, please refer to the following webpage:
Victoria
A rental agreement may include fees for breaking the agreement. If there are fees listed, the agreement must indicate the reason for the fees.
The costs a renter has to pay depend on the kind of rental agreement and the costs the rental provider has paid.
Break Lease costs may include:
- Costs for lost rent
- Reimbursement of costs for advertising
- Reimbursement of costs for re-letting fees
For further information, please refer to the following webpage:
Western Australia
The tenant may be liable for the following costs when breaking their lease:
- Loss of rent
- Reimbursement of costs for advertising
- Reimbursement of costs for re-letting fees
For further information, please refer to the following webpage:
https://www.consumerprotection.wa.gov.au/publications/breaking-lease-tenants-bulletin-41
South Australia
The tenant may be liable for the following costs when breaking their lease:
- Loss of rent - there are maximum timeframes depending on the length of the lease
Less than 24 months remaining – fee due is a maximum 1 month's rent.
More than 24 months remaining – fee due is 1 month's rent for each year of the remaining term (no more than 6 months payable).
This is calculated from the day the tenant moves out.
- Reimbursement of costs for advertising
Calculated based on total length of lease & length remaining
- Reimbursement of costs for re-letting fees
Calculated based on total length of lease & length remaining
For more information & advertising/letting fee calculators, please refer to the following webpage:
Tasmania
The tenant is required (unless otherwise agreed) to continue to pay rent until the lease expires or a replacement tenant has moved in – whichever occurs first.
In addition to paying the rent, the tenant may need to pay for a portion of the advertising costs. A landlord cannot charge a break lease fee and any charges such as advertising must be clearly itemised.
For further information, please refer to the following webpage:
https://www.cbos.tas.gov.au/topics/housing/renting/ending-a-tenancylease/tenant-ending-lease
Australian Capital Territory
If the tenant leaves before the end date of the fixed term agreement without sufficient reason, then they may be responsible for costs involved with breaking the agreement. These costs are outlined in the Residential Tenancies Act 1997 - Schedule 2, 2.1 Break lease fee clause:
(a) if the fixed term is 3 years or less—
(i) if less than half of the fixed term has expired—6 weeks rent; or
(ii) in any other case—4 weeks rent;
(b) if the fixed term is more than 3 years—the amount agreed between the lessor and tenant.’
If the lessor enters into a residential tenancy agreement with a new tenant, the amount payable by the tenant is limited to-
(a) the amount of the break fee under subclause (1) less the amount of rent payable by the new tenant for the defined period; and
(b) if the tenant vacates the premises more than 4 weeks before the end of the fixed term—the lessor’s reasonable costs (not exceeding the defined cost limit) of advertising the premises for lease and of giving a right to occupy the premises to another person.
(4) In this clause: defined cost limit means—
(a) if half or more than half of the fixed term has expired—an amount equal to 2/3 of 1 week’s rent; or
(b) if less than half of the fixed term has expired—an amount equal to 1 week’s rent’
Was this article helpful?
That’s Great!
Thank you for your feedback
Sorry! We couldn't be helpful
Thank you for your feedback
Feedback sent
We appreciate your effort and will try to fix the article