Can you break a rental lease?

 

by Hayden Groves – REIWA President     https://reiwa.com.au/

Some of the most common property questions the REIWA Information Service receives from the Western Australian public is around breaking a property lease and the process that is involved.

The method of terminating your lease is determined by what kind of lease you have.

If you have a periodic lease, then terminating your lease agreement is straight forward. All you need to do is provide 21 days’ notice in writing to your property manager or landlord. Your lease will then end in 21 days.

Of course, if you are sending the notice by post, it’s best to add six working days to the notice period to account for delivery times, and if sending by email, you should follow up with the property manager to confirm they have received the email and are aware of your intent to end the lease.

Terminating a lease becomes significantly more complicated if you are on a fixed-term lease, as there is no automatic right of termination. In order to break a fixed term lease, you need the owner’s permission (via your property manager if the accommodation is professionally managed).

In this instance, the owner will often agree to a termination at a point in time when a replacement tenant commences a new lease. In other words, the owner is looking for a smooth swap, minimum fuss and no costs incurred.

If the owner is confident of quickly finding a new tenant, they might agree to a no-fuss, no-cost break lease – however, they are under no obligation to do this.

The Residential Tenancy Agreement is a legal contract and the owner is entitled to seek an outcome where their financial position is no worse off as a result of a tenant breaking their tenancy contract. Subsequently the owner is entitled to claim compensation for any financial loss incurred as a direct result of the breach.

If a replacement tenant is not found by the time you move out, you are liable to continue to paying rent until a new tenant has been found or the original end date of your fixed-term lease expires.

Additionally, if a tenant has been found, but the amount they have negotiated to pay per week is less than what you are currently paying, you may be required to pay the difference up until the point your original lease would have concluded.

Walking out of the lease agreement does not terminate your obligations – the owner is still entitled to claim compensation.

Where possible, my advice is to avoid breaking your lease. If you are in a situation where this is not possible, speak to the property manager about what costs you are likely to be liable for if a suitable tenant replacement cannot be found.

 

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