What Happens If You Break A Rental Lease in VIC

What Happens If You Break A Rental Lease in VIC

By : angila

Nothing is more challenging than breaking a rental lease early. Sometimes, tenants are left with no other option than leaving a rental property before the end of a tenancy. According to the Residential Tenancy Laws in Victoria, tenants/renters in a fixed-term rental agreement can terminate or leave the contract early. Still, they should provide a valid reason because it can be expensive.

As a responsible tenant, you should always remember that a rental provider or a landlord can ask you to pay the ‘lease break’ cost to compensate for their losses. So, break the lease only if you have hardship due to job loss, illness, relocation, etc.  Also, give notice of intention to vacate as early as possible.

If you are new as a renter in Melbourne and want to know what happens if you break a rental lease, keep reading the guide, tips and tricks shared below in the article. It includes the penalties you may incur if you terminate the lease early and useful tips for doing it with minimal loss.

Let’s Get Started!

What Happens If You Break Your Lease Early?

It is important to remember that breaking a lease early means breaching the rental agreement. This means you have to pay compensation to cover the losses of a rental provider.

However, you can end your fixed-term lease agreement before it ends without penalties. The legally-specified reasons are:

  • Hardships due to illness or job loss
  • The rental property doesn’t meet the minimum standard before the tenant moves in
  • A long-term rental agreement was verbal
  • The tenant is relocating to social housing
  • The tenant requires temporary crisis accommodation

Note: Make sure you provide all the documentary evidence pieces and give the minimum amount of notice (28 days or 14 days).

If you are moving out of a rental property at the end of your tenancy, hire professionals for the best end of lease cleaning Melbourne and claim your full bond back.

However, if you are breaking your lease without any prior notice or a legally specified reason, be ready to incur the lease break fees or costs.

Costs or Fees for Breaking a Lease in Victoria

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The lease-break cost a tenant has to pay depends on the type of rental agreement. These are the most common costs or fees included in the agreement.

Cost for Lost Rent

If you break a lease early, the rental provider may ask you to pay for the lost rent. According to the VCAT, you must pay 1 month of rent for every 12 months remaining on your tenancy agreement if it is longer than 5 years.

For instance:

  • if 3 years left in your tenancy, pay 3 months of rent
  • If 2 years left in your agreement, pay 2 months of rent

Advertising Costs

You may have to cover the costs if the rental provider pays to advertise the property. However, if the cost is too high, you can apply to VCAT, and they will make the right decision for both parties.

Re-Letting fees

Rental providers or landlords pay a fee to property agents, and they will find a new tenant. This is called a re-letting fee. If you have terminated the rental lease, you must pay the re-letting fee.

The amount you have to pay depends on how much of the tenancy is left. You have to pay the same fee amount as the proportion of time left on the agreement.

How to Break a Lease without a Penalty?

Here are some of the great tips and tricks to help minimise the loss if you break the rental tenancy early:

Notify Your Landlord Early

If you can’t apply for early termination via VCAT, notify your landlord or property manager in writing. Mention the name and address of your landlord or property manager. Also, mention the day you are vacating the property.

Note: Make sure you give a 14-day notice to vacate from a rental property in Victoria. This will also help you prevent rental disputes without a hint of stress.

Check for Legal Cause to End the Lease Early

As mentioned above, you can look for legally-specified reasons and see how you can save the penalty. It could be due to:

  • Financial hardship
  • Personal problems
  • Inhabitable property
  • Landlord Breaches the Tenancy Agreement
  • Domestic Violence
  • Death of a tenant

Perform a Thorough End of Lease Cleaning

It is good to perform a quality end of lease cleaning in Melbourne to get your bond money back. You can do proper research and hire experts to spruce up all the rooms and the outdoor areas to return the property in a reasonably clean condition.

Cover the Costs of Breaking Your Lease

Make sure you cover the costs of breaking your tenancy and pay the advertising cost, lost rent cost, and re-letting fees on time. You may also need to help your landlord to find a new tenant to reduce the costs.

On the move-out day, you are expected to hand over all the keys to the property manager and ensure everything is in the same condition as it was at the start of your tenancy. For that, check the initial condition report and compare the condition.

Know what happens if you break a rental lease:

What happens if you break a rental lease

Wrapping Up

It is good to avoid breaking your rental lease if there is no emergency or hardship. However, you need to know your rights as a tenant and provide legally specified reasons for terminating your lease to reduce lease-break costs and penalties.