Managing

Breaking a lease – what happens if a tenant ends the agreement early

Jan 2017

If a tenant needs to end an agreement early, also known as a lease break, for various reasons they need to be aware of their legal responsibilities and the costs need to be carefully weighed up before making a move.

A lease is a legally binding written contract between the tenant and property manager/owner and, if the tenant decides to break the lease, they may be responsible for compensating the property manager/owner for any loss or expense for re-letting the property which may include:

  • payment of rent until another tenant is found
  • break lease fees, such as real estate agents’ let fees
  • advertising expenses to relet the property.
However, the property manager/owner has a legal obligation to reduce or minimise costs that result from the lease break. That is, the property manager/owner must make an effort to re-let the premises in a reasonable time.

If there is a dispute between the tenant and property manager/owner about the amount of compensation, an attempt to conciliate the issue must first be made with the RTA. If the issue is not resolved, the RTA will issue a Notice of unresolved dispute. The matter can then be taken to the Queensland Civil and Administrative Tribunal (QCAT) for a decision.

The ways a tenancy agreement can be ended fall into 3 broad categories:

  • Ends normally: at the end of a fixed agreement or during a periodic agreement by giving the correct notice.
  • The tenant and property manager/owner mutually agree in writing.
  • A QCAT order eg. excessive hardship.

In the case of excessive hardship, a tenant can make an urgent application directly to QCAT (without participating in RTA dispute resolution) to end the tenancy agreement. The legislation does not define "excessive hardship" as this is dependent on individual circumstances and must be ruled on by an adjudicator at QCAT.

Some examples of excessive hardship may include:

  • Tenant who has lost their job and has no means to pay rent
  • Tenant who is forced to relocate to another location for work
  • Severe physical or mental illness

If an owner wants to end a fixed term agreement on the grounds of excessive hardship eg. lost job and unable to pay mortgage, they may also apply to QCAT for a decision. In this case the tenant may seek compensation eg. an amount towards moving costs.

The RTA website has further details about ending a tenancy agreement.