When entering a rental agreement a tenant intends to live in the property for a while, usually more than twelve months. However due to change of circumstances, it’s not uncommon a tenant wants to break a lease early. In considering this, it’s important to understand the proper way to break your lease.
A rental agreement is a contractual agreement that is set on a fixed term. This is a legally binding document. Should a tenant request to exit the lease, this is known as “breaking your lease”.
What causes someone to break a lease?
There may be many reasons that cause a tenant’s circumstances to change and result in a desire to break a lease. They may be one of these:
- Change of employment – it may result in moving
- You have lost your job and can’t afford the lease
- You or a family member are unwell and need to move in with family to recover
- You may have met a new partner who owns their own home
- The property no longer suits your needs
- You feel unsafe due to noise, crime or neighbours around you
- You want to travel overseas for an extended period of time
There are many reasons why you may want to break a lease. The tenant may also want to transfer the lease to someone else instead. To learn more click our Market Insight transfer of lease to a new tenant.
To break a lease the first step is to consult your property manager with written notice of your intention to vacate.
Is there a cost to break a lease?
In general terms, there are costs involved when breaking a fixed term lease. The costs may include the following:
- Break lease fee
- Cleaning costs
- Advertising expenses to find a replacement tenant
- Paying the ongoing rent until the landlord finds a new tenant
This should be discussed with your property manager before proceeding. Understanding the cost breakdown and total fees are important.
What if I am on a month-by-month lease?
If you’ve concluded your rental agreement and continued to pay on a month-by-month basis (also known as a periodical lease), you can break a lease without penalty. In Melbourne, you still need to provide 28 days notice however if the property requires cleaning or repairs these are extra costs that may be charged.
If you want to learn more about the property market, please feel free to review our other articles in Market Insights. or contact us at any stage.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Apr 2020
