There are times when it becomes necessary to break your lease, but it’s rarely easy to do. Contracts and Lease Agreements are made between parties to establish trust and security, and are not made to be broken. When they are broken, there will be legal and financial consequences.
A fixed term lease will generally specify the consequences (or conditions) associated with exiting the lease before the fixed term is up. If you exit a lease without sticking out the fixed term in full, or without meeting the conditions for early termination, you will likely be required to pay a certain amount of money to your landlord even though you are no longer occupying the property.
Your landlord may be entitled to take what you owe from the security bond you paid at the start of your tenancy. In Australia, several tenancy databases record the names of individuals whose bond has not been returned in full. The databases can be considered a kind of ‘blacklist’ for tenants, and are a way for agents to assess prospective tenants. Having your name on a tenancy database may mean that your future application for a lease could be rejected.
Breaking a lease can have several financial consequences, from paying the outstanding rent for the remainder of the fixed term, to paying rent until a new tenant can be found. Some leases will require that you pay the costs of advertising the property if you breach your lease, or you may be obliged to pay re-letting fees, such as the real estate agent’s fees.
There are, however, some reasons you may be entitled to break a lease, including:
- The property poses a health risk (eg black mould) or becomes uninhabitable through natural disaster, defective construction, or the building fails to comply with building codes
- A breach of the lease by the landlord or their agent, for example by entering the property uninvited, or failing to keep the property in good repair
- Undue hardship – this requires ‘special circumstances’, such as financial or health difficulties
Although these are valid reasons to break your lease, you may still be required to pay your landlord some money, depending on the circumstances of your situation. You may need to make a formal application to a Tribunal, who will hear your claim and make a decision as to whether you are entitled to break your lease, and whether you must pay the landlord for early termination.
If you’re concerned about breaking your lease, or would like to know more about your rights as a tenant, contact Pathway Lawyers & Migration Agents for friendly, cost-effective advice on the best way to proceed.