RentingOnRecord

All topics

What does it cost to break my lease early?

39 quoted answers, each with its source

The short answer

In Victoria, a renter who ends a fixed-term lease early does not pay a penalty, but must cover certain costs so the rental provider does not lose money. The rental provider must try to re-let the property or room quickly and keep their losses to a minimum, and the renter does not pay rent after the property is re-let. Reasonable costs are not defined in law, and sources conflict on advertising: Consumer Affairs Victoria and Landlord Wise state that reasonable advertising paid to find a replacement renter may be recoverable, while Tenants Victoria states that lease-break costs are not the costs to find or advertise to a new renter and that a re-letting fee must be based on the fee for preparing the outgoing renter's lease. VCAT decides disputed reasonable costs, considers notice and re-letting efforts, may award little or no compensation in family violence, and cannot order more than one month's rent for every 12 months remaining on a fixed-term agreement longer than 5 years; a renter past the end of their first fixed-term lease cannot be charged advertising or a re-letting fee to find a new renter, and a renter experiencing severe hardship can apply to VCAT to break an agreement without paying any costs.

Every part of this comes from the quotes below. How we write these.

What the rules actually say22

Quoted straight from Consumer Affairs Victoria, the Residential Tenancies Act or a tribunal.

#

In most instances, breaking a lease now requires a Victorian rental provider ending a rental agreement to give the renter 90 days notice.

medium confidencefirst-party
1 quote from 1 source
In most instances, they must give you 90 days’ notice
#
  • Victorian renters do not have to pay a penalty for breaking a rental agreement.
  • Victorian renters have to cover certain costs when breaking a rental agreement.
first-party
1 quote from 1 source
Renters do not have to pay a penalty for breaking the agreement, but they do have to cover certain costs so the rental provider doesn’t lose money when the agreement is broken.
#

For a break lease with a fixed-term agreement longer than 5 years, VCAT cannot order compensation of more than one month's rent for every 12 months remaining on the agreement.

first-party
1 quote from 1 source
For fixed-term agreements that are longer than 5 years, VCAT cannot order the compensation of more than one month’s rent for every 12 months remaining on the agreement.
#
  • The law does not define exactly what reasonable costs are for breaking a Victorian rental agreement.
  • Disagreements about reasonable costs for breaking a Victorian rental agreement can be taken to VCAT.
first-party
1 quote from 1 source
Reasonable costs means costs that most people would think are fair. The law does not define exactly what reasonable costs are, so if people cannot agree what is reasonable, they can apply to VCAT to make the decision for them.
#

Ending a fixed-term lease early without a legally valid reason or VCAT order is what Tenants Victoria calls breaking your lease.

1 quote from 1 source
If you end your fixed-term lease early without a legally valid reason or VCAT order, or you do not follow the rules when ending your fixed-term lease, you are ‘breaking’ your lease.
#

If a Victorian renter is past the end of their first fixed-term lease in a property, the landlord cannot claim…

  • advertising costs to find a new renter.
  • a re-letting fee to find a new renter.
1 quote from 1 source
If you are already past the end of your first fixed-term lease in that property, the landlord cannot claim advertising costs or a re-letting fee to find a new renter
#
  • A Victorian landlord claiming lease-break costs must keep their losses to a minimum.
  • The requirement that a Victorian landlord claiming lease-break costs keep their losses to a minimum is known as mitigating their losses.
1 quote from 1 source
The landlord must keep their losses to a minimum, also known as ‘mitigating’ their losses.
#

In Victoria, a fixed-term lease that is about to expire automatically turns into a periodic month-by-month lease once the fixed term ends.

1 quote from 1 source
In Victoria, when a fixed-term lease is about to expire it will automatically turn into a periodic (month-by-month) lease once the fixed term ends. You do not have to move out just because your fixed term lease is about to expire
#

Where a Victorian lease was ended early for reasons such as a new job opportunity, the compensation awarded may be higher.

1 quote from 1 source
However, if the lease was ended early for reasons such as a new job opportunity, the compensation awarded may be higher.
#

VCAT considers how much notice was given to the landlord when deciding lease-break compensation.

1 quote from 1 source
VCAT also considers factors such as how much notice was given to the landlord and what efforts they made to re-let the property before the hearing.
#

When a renter breaks a lease, VCAT may find that the outgoing renter should not pay compensation costs if the landlord or agent puts up the rent.

1 quote from 1 source
If the landlord or agent does anything to make it harder to find a new renter, such as putting up the rent, or they do not make an effort to find a new renter, or they unreasonably refuse a new renter that you have found, VCAT may find they did not take reasonable steps and you should not pay those compensation costs.

Practical effect6

What is observed to happen in practice, as distinct from what is documented.

#

VCAT considers what efforts the landlord made to re-let the property before the hearing when deciding lease-break compensation.

1 quote from 1 source
VCAT also considers factors such as how much notice was given to the landlord and what efforts they made to re-let the property before the hearing.
#

When a renter breaks a lease, VCAT may find that…

  • a landlord or agent who puts up the rent did not take reasonable steps.
  • a landlord or agent who does not make an effort to find a new renter did not take reasonable steps.
  • the outgoing renter should not pay compensation costs if the landlord or agent does not make an effort to find a new renter.
1 quote from 1 source
If the landlord or agent does anything to make it harder to find a new renter, such as putting up the rent, or they do not make an effort to find a new renter, or they unreasonably refuse a new renter that you have found, VCAT may find they did not take reasonable steps and you should not pay those compensation costs.

Changed on1

A dated change. This is where advice quietly stops being true.

Disputed between sources4

Sources that do not agree, presented without picking a winner.

#
  • Consumer Affairs Victoria states a renter may have to cover reasonable costs paid to re-advertise the property.
  • Tenants Victoria states lease-break costs are not the costs to find or advertise to a new renter.
first-party
2 quotes from 2 sources
The renter may have to cover any reasonable costs that the rental provider or agent has paid to re-advertise the property.
Lease-break costs are meant to compensate the landlord for expenses they paid in renting the property to you, not the costs to find or advertise to a new renter or to prepare a new lease.
#

Tenants Victoria states that the re-letting fee must be based on the fee charged for preparing the outgoing renter's lease.

medium confidencefirst-party
2 quotes from 2 sources
Most real estate agents charge rental providers a fee to find a new renter for their property after the old renter leaves. This is called a re-letting fee.
This must be based on the fee that the agent charged the landlord for preparing your lease, not for preparing the lease of the new renter.
#

Landlord Wise states advertising paid to find a replacement renter may be recovered from the outgoing renter.

vendor
2 quotes from 2 sources
If you paid to advertise the property to find a replacement renter, the renter who broke the agreement may be required to cover those costs — but only reasonable costs.
Reasonable advertising costs that were paid to find you, not paid to find the new renter.

Often said, but we could not find it in the rules6

Lots of people say this. We went looking for an official source that backs it up and could not find one, so treat it as something people repeat rather than something settled.

#

Landlord Wise states that a renter who broke the agreement may be required to cover reasonable costs the rental provider paid to advertise the property to find a replacement renter.

vendor
1 quote from 1 source
If you paid to advertise the property to find a replacement renter, the renter who broke the agreement may be required to cover those costs — but only reasonable costs.
#

Landlord Wise states that clause 16.1 of the standard form rental agreement limits claimable rent foregone to no more than one month's rent for each year remaining on the agreement.

vendor
1 quote from 1 source
The standard form rental agreement (clause 16.1) limits the amount of rent foregone you can claim to no more than one month’s rent for each year remaining on the agreement.
#

Landlord Wise states that a self-managing Victorian rental provider who does not use an agent has no re-letting fee to recover.

vendor
1 quote from 1 source
If you self-manage your property and do not use an agent, there is no re-letting fee to recover.
#

Landlord Wise states that an unexplained flat early termination fee in a Victorian rental agreement is unenforceable.

vendor
1 quote from 1 source
An unexplained flat fee is unenforceable.
#

realestate.com.au states that in the traditional rental market…

  • standard leases are typically fixed at six or twelve months
  • moving or breaking a lease can be costly
vendor
1 quote from 1 source
This blend of short and mid-range commitments differs from the traditional rental market, where standard leases are typically fixed at six or twelve months, and where moving or breaking a lease can be costly.