If you’re a tenant in a rental property, you’ll most likely need to terminate your fixed-term rental agreement at some point unless you consistently ask your landlord to renew the lease.
Whether it’s because the lease is expiring or a party is breaking the fixed term agreement, there comes a time when you and your landlord go your separate ways.
So how do you break a rental agreement early without having to pay lease break fees? How do you terminate a lease early without penalty, if that’s even possible? With new rental laws that came into effect in May 2021, there are a few more steps you need to consider.
Whatever your situation, we’re putting together a list of what to think about as the date approaches.
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Tell your landlord
If your rental agreement is expiring, it might seem as if you don’t have to do anything about it, right?
Actually, you need to act pretty quick. A fixed-term agreement is a legally binding rental agreement and doesn’t end until you’ve adhered to the minimum notice period and your landlord has gotten back their keys.
So they’re a vital part! So vital in fact that if you still have the keys after the contract ends, you may still be liable to pay rent.
If you know your tenancy agreement is expiring soon, you have to give your landlord written notice if your intention is to move out. If you don’t provide written notice, the contract automatically becomes a periodic lease.
Notifying your landlord before breaking the lease is a simple process. And whether you’re breaking a lease in NSW or elsewhere, it’s pretty much the same thing. Favour a written termination notice over a phone call and send them an email with your intentions. There are also online forms available to ensure everything is legal and binding.
The lead time you need to give your landlord if you’re vacating varies from state to state. But it’s usually around 14-28 days. Make sure to check your tenancy agreement for these details.
Preparing to end the lease
Now that you’ve given your landlord a due warning, it’s time to prep a few things before you vacate.
- Repairing damage: if you’ve damaged anything during your stay, now’s definitely the time to repair it. There will be an exit condition report (explored below) that’ll make you liable if anything is in worse condition than it was when you arrived.
- Paying out the remaining rent: if you’ve informed your landlord, you can move out even before the tenancy agreement expires. But you’re still responsible for the month’s rent in the fixed term period. If you’ve been making automatic payments, check to make sure you stop paying rent.
Cleaning the rental
Indeed, this may seem like an annoying bit. So prepare yourself early and read the fixed term agreement terms to find out if you’re required to bring in cleaning professionals or fumigation experts.
If your landlord ends up having to do these, they’ll deduct it from your bond. So if it’s on you, remember to keep the receipts as proof.
If nothing’s written in your fixed-term lease agreement about hiring professionals, you have to clean it yourself to the state it was when you moved in.
Also, check that any fittings or fixtures you’ve installed have been removed and also haven’t caused any damage.
Now comes the exit condition report. It has to happen within ten days of your leaving. If you’re a person who wants to get everything done quickly, we might suggest you request your agent and landlord to check out the property the day you vacate.
This way, you’re altogether during the inspection. Because legally, the rental provider has to give you the opportunity to attend.
Getting your bond back
After ending fixed-term agreements early, you and your landlord will come to a decision on how much bond is to be returned to you, and how it is to be paid out.
You’ll both then sign a Bond Claim form. Since the bond is held by a third party, that form is sent to the Residential Tenancies Bond Authority who will pay out the bond on the form. This will be paid directly to you usually a day after they receive it.
Remember that the bond release can be negotiated. So if there’s a part of the form you don’t agree with, discuss it with your landlord. Common reasons for landlords deducting bonds are:
- Cleaning: if the property isn’t cleaned to the standard put forth in the fixed term agreement.
- Property damage and missing items: this is a given. If you’ve damaged the property and not remitted the compensation costs involved or made repairs or if you’ve taken something with you that belongs there.
- Pet keeping problems: has your pup chewed on a door frame or stained something?
- Unpaid rent
- Breaking a lease agreement early: Breaking a fixed-term tenancy agreement early will be stipulated in your contract.
Now, it’s important to note that some changes in the property may be due to wear and tear. Things like lightly scratched surfaces and paint chips occur naturally when you live in a space.
But different landlords will have different opinions on this. So if they see this as damage, assess whether it’s actual damage or just general wear and tear.
If you and your landlord or property manager can’t agree on a claim, they have to make a case with the Tribunal within 10 days of your lease expiring. And they can’t get any of your bond money until the case is settled.
If you’ve moved out and are still waiting on your bond, apply to the Tribunal ASAP. They don’t charge you for making a claim yourself.
A note about breaking a lease
If you’re breaking a lease agreement early, things are a lot harder when you’re on a fixed-term rental agreement lease (requiring you to make monthly payments for a set period of time i.e.: 6/12/24 months).
But the number one priority is to tell your landlord so they can begin looking for prospective tenants.
So the whole process isn’t that much different from ending a lease, except you’re probably responsible for a lease break cost for breaking a lease early. This includes all the advertising costs and preparing the property for a new tenant.
Just make sure to check out any laws that are state-specific! Here are some sources for Victoria, NSW and Queensland to get you on the right path.
Finding another rental
While you’re ending this rental lease…
You can find your next great rental property on Soho. Check out our renter’s guide to help you get organised before you move on.
Browse our search page to check out some amazing listings available right now. But don’t just stop there, download our app to get the full Soho experience. Just remember to update your match preference so we can send you matches on the regular!
