Ending an agreement early (breaking a lease):
If a tenant or property manager/owner ends a fixed term agreement before the end date without grounds (i.e. without sufficient reason) they are breaking the agreement. This is also known as breaking the lease. A tenancy agreement is a legally binding agreement. If it is broken, compensation will probably need to be paid.
Compensation:
Money may be owed to the property manager/owner as a result of breaking the lease. This is considered compensation.
Example: the loss of rent until the property is re-let or until the end of the tenancy agreement. The tenant may also have to pay reasonable re-letting and advertising costs. Any compensation, or payment options for the amount, should be discussed between the tenant and the property manager/owner (this could include how the bond is to be paid out). The property manager/owner must mitigate any loss associated with breaking the lease.
Excessive hardship:
If the tenant or property manager/owner is experiencing excessive hardship (e.g. serious financial or health issues) they may make an urgent application to QCAT for an order terminating the agreement. However, QCAT may also order compensation to be paid even if the agreement is terminated.
Tenant – ‘I want to break my Lease’ :
- Always inform the property manager/owner in writing of your intention to leave.
You may be asked to pay:
- Reasonable re-letting costs (usually 1 week’s rent plus GST)
- Reasonable advertising costs (if incurred), and
- Compensation for loss of rent (until a new tenant is found or until the end date of the agreement whichever happens first).
- The property manager/owner is legally required to minimise any costs associated with breaking the lease. If you feel they are not mitigating this loss, contact the RTA for assistance.
Options:
- You and the property manager/owner mutually agree in writing to end the agreement early on a specific date, or
- Give the property manager/owner a Notice of intention to leave (Form 13) and leave the property (you will probably need to pay compensation), or
- Get your property manager/owner’s approval to transfer your interest in the property. If you have paid a bond you will need to fill out a Change of bond contributors (Form 6), or
- Apply to QCAT to end the agreement due to excessive hardship (if you have evidence to support the application).
Property manager/owner – ‘The tenant wants to break the lease’ :
- The tenant may end the tenancy agreement early, however they may have to pay compensation if they do not have grounds (sufficient reason).
- The tenant can be charged reasonable re-letting and advertising costs.
- The tenant may be responsible for paying compensation for loss of rent (until a new tenant is found or the end date of the agreement).
- You are legally required to minimise costs associated with the tenant breaking the lease. You should start arrangements for re-letting the property as soon as practical.
Options:
- You and tenant mutually agree in writing to end the agreement early on a specific date, or
- Tenant provides you with a Notice of intention to leave (Form 13) and you may agree on compensation (e.g. for loss of rent and reasonable re-letting costs), or
- Approve the transfer of the tenant’s interest in the property. If they have paid a bond they will need to fill out a Change of bond contributors (Form 6), or
- The tenant may decide to apply to QCAT to end the agreement due to excessive hardship (if they have evidence to support the application).
Property manager/owner – ‘I want to break the lease’:
- Without an order from QCAT ending the tenancy the tenant does not have to move out.
- If you do not have a QCAT order but the tenant agrees to move out early you may negotiate with the tenant over a compensation payment (e.g. moving costs).
Options:
- You and the tenant mutually agree in writing to end the agreement early on a specific date.
- Apply to QCAT to end the agreement due to excessive hardship (if you have evidence to support the application).
Tenant – ‘The property manager/owner wants to break the lease’:
- Without an order from QCAT ending the tenancy, you do not have to move out.
- If the property manager/owner does not have a QCAT order, but you agree to move out early, you may negotiate a compensation payment (e.g. moving costs).
Options:
- You and property manager/owner agree in writing to end the agreement early on a specific date.
- The property manager/owner applies to QCAT to end the agreement due to excessive hardship (if they have evidence to support the application).
© The State of Queensland Residential Tenancies Authority 2011