June 9, 2021

What if you need to end a rental agreement early?

Sometimes, life happens, which may mean you need to end a rental agreement early. But if you’re a rental occupier, how do you end an agreement and what costs will you be liable for?

In this article, we’ll discuss the process of ending a rental agreement early and what you should know as a rental occupier.

The type of rental agreement matters

What happens when you end a rental agreement depends on the reasons for leaving and the type of agreement you currently have with your rental owner.

Basically, there are two types of rental agreements; fixed term and periodic, and there’s a big difference between the two.


A periodic rental agreement is one that has no set term. It usually occurs after a fixed term agreement has ended and sees you rent the property week to week.

Ending this agreement just requires written notice in accordance with your state or territory rental laws.

Fixed term

A fixed term rental agreement is one where you have signed a legally binding document that you will rent a property for a set period at a set price.

Ending a fixed term agreement before the agreed date is a little more complicated.

It may see the rental occupier liable for costs such as re-advertising the property for rent, rental payments until the agreement ends or a suitable rental occupier is found, or in NSW you might need to pay a break-lease fee.

Whether you need to pay these fees also depends on your reasons for leaving.

Legal reasons to end a lease

In some situations, there may be legal reasons for you to end a lease that will not require you to compensate the rental owner.

These potentially include:

  •         Undue financial hardship
  •         The premises become uninhabitable, due to a natural disaster or a health and safety issue
  •         Breach or repeated breach of the rental agreement by the rental owner
  •         Domestic violence

If these are among the reasons you are considering ending a rental agreement, bear in mind you will need to contact your rental tribunal in order for them to make an order that the agreement can be terminated.

Other reasons for leaving

If your reason for ending a rental agreement falls beyond what’s listed above, you may be required to compensate the rental owner.

In most states and territories, this involves the following:

  •         Paying rent until new rental occupiers move in or until the end of the fixed term (whichever happens first)
  •         Advertising costs to re-let the property to new rental occupiers
  •         Reletting fees, such as an agent’s fees

In NSW, however, you might be charged something called a break-lease fee. As the name implies, it’s a set fee that comes into play should you terminate a rental agreement early.

Your rental agreement will specify whether a break-lease fee may be charged. If it’s not specified, chances are the other compensation methods listed above apply.

Also, it’s important to note that notice periods and compensation required can vary depending on which state or territory you reside in. And you can find out more about the relevant legislation here.

What to do if you need to end a rental agreement early

If you do need to end a rental agreement early, the best thing to do is to talk to your property manager and provide notice as early as possible.

The property manager may be able to come to an agreement with the rental occupier regarding compensation, and will also work to find a suitable new rental occupier as swiftly as possible.

How we can help

Our experienced property managers pride themselves on establishing great relationships with both rental occupiers and owners.

We manage every property as if it were our own and you can learn more about our property management services here.

Alternatively, if you are looking to rent a property, you can view the properties we currently have available here.