What Happens If You Break A Rental Lease In NSW?

Ending a tenancy is difficult for all tenants, especially those wanting to terminate the contract earlier than the decided time. All tenants in a fixed-term lease agreement can end a property lease agreement early, but you must only when necessary because it is a costly decision. You may need to compensate the landlord for their losses if your reason for leaving is legally specified. If you are not careful, you can get a penalty that makes you lose your rental bond and pay more than the four weeks of rent which is usually the maximum rental bond amount in New South Wales. If you think breaking a rental lease is affordable, consider you have to bear the cost of a new tenancy, end of lease cleaning in Sydney, removalists and more. You should know what happens when you break a rental lease in NSW, the penalties you can incur and tips for doing it with minimal loss. Thus, read this complete guide to learn valuable insights.

Reasons For Breaking a Lease

While it is best to end a lease in NSW when the complete duration is over, but you may have to do it for personal or legally specified reasons. Personal reasons include relocating for a job, a family emergency, a medical emergency and other. Ending the tenancy for these reasons will result in a penalty if you don’t transfer the tenancy to someone else. Therefore, if you plan to break a rental lease in NSW, it is best to do it for the following legally specified reasons.

The rental provider/landlord breached the rental agreement terms.

The premises become unsuitable for habitation.

The landlord increased the rent. Applicable for fixed-term tenancies of 2 years or more.

On extraordinary grounds, such as domestic violence.

You are suffering undue hardship if the tenancy continues.

Fee & Compensation for Breaking a Lease

According to NSW Tenancy Laws, mandatory fees for fixed-term tenancies of 3 years or less are applicable upon early termination by a tenant. This fee depends on the time left for the completion of the agreement. The fee also varies for lease agreements signed before and after 23 March 2020. You must pay the following fee if your tenancy started before 23 march 2020.

4 weeks of rent if 25% of the agreement is not complete.

3 weeks of rent if 25% agreement is complete but it is less than 50%.

2 weeks of rent if 50% agreement is complete but less than 75%.

1 week of rent if 75% of the agreement or more has expired.

If your tenancy started after 23 march 2020, the break fee is optional and may or may not be included in the rental agreement. If it’s not included, you don’t have to pay it, but you still need to perform bond cleaning in Sydney to get your bond back. However, if an optional break fee is included, you have to pay the following fee.

6 weeks of rent upon leaving the tenancy in the 1st half of the agreement.

4 weeks of rent upon leaving the tenancy in the 2nd half of the agreement.

Whether a fee is applicable in your case or not, a landlord can seek compensation for loss of rent, advertising and letting fee. If the tenant and landlord cannot agree on the compensation, the rental provider can claim your bond, which you can get completely after performing bond cleaning in Sydney. They can also apply to the NSW Civil and Administrative Tribunal for compensation. Therefore, it is best to end the tenancy on good terms & try to get this compensation and fee waved off by transferring your tenancy to a new or existing tenant.

Tips for Breaking Lease

Discuss your reason for leaving early with your landlord to ensure they can provide you respite and wave off competition. Additionally, follow these tips to break your lease with minimal loss.

Give as much notice as possible to end a tenancy and ensure the notice is in writing. You can email the notice.

Make sure the complete address of the property is mentioned.

Perform end of tenancy cleaning adequately.

Detail your reason for ending the tenancy, and if it is specified in the rental agreement or state law, mention it clearly.

Mention the date you want to move out and a statement that the lease will end at that time.

Get confirmation from the rental provider that they have received the notice.

If your reason for terminating tenancy is legally-specified, you can end a fixed-term tenancy without penalty by giving a 14-day notice to vacate from a rented apartment or house.

Wrapping Up

Ending a tenancy when you have completed the entire period is challenging. But it is even harder and stressful when you have to break a rental lease in NSW early. You can feel confused and anxious, which is why use this guide to know the legally-specified reasons for breaking a lease, the fee applicable in certain cases and useful tips.