If you want to vacate your rented premises but do not give notice, or want to end the tenancy agreement earlier than the required notice period (break the lease), you may be liable for fees and charges.
The Residential Tenancies Act 1997 does not require a tenant to pay fees and charges directly related to breaking a lease (terminating a rental contract before the end of the contract), but related costs may be incurred. However, if the tenant ending the lease early causes financial loss to the landlord, the landlord/agent may seek compensation by applying to the Victorian Civil and Administrative Tribunal (VCAT). This may be a term of the rental contract.
Fees for breaking the lease
If you break a lease, you may have to pay some of the following:
You may have to pay rent until the end of your lease or until a lease with a new tenant begins.
Long-term lease using Form 2
If you break a long-term lease – that is, it did not end early by mutual agreement or a VCAT order on hardship grounds - the landlord can ask you to pay one month’s rent for every full year remaining on the lease. This is capped at six years, so the maximum amount the landlord can ask for is six months’ rent. This is based on the rent amount you were paying when you broke the lease.
The landlord must take all reasonable steps to re-let the premises, and cannot claim rent for any period after the property is re-let. If you believe you were paying rent while the property was re-let, you can apply to the Victorian Civil and Administrative Tribunal (VCAT). For more information, visit the Application by a tenant or landlord page on the VCAT website.
For more information, view our Long-term leases section.
You may have to pay reasonable costs for the landlord/agent to re-advertise the rental property.
Re-letting fees are usually calculated on a pro rata basis, whereby the number of months left on the lease will determine the pro rata percentage applied to the payment.
For example, if the re-letting fee is $450 and there are six months left on a 12-month fixed-term lease, you would have to pay a pro rata amount of 50% of that fee ($225).
Details about re-letting fees to be charged may be included in a lease agreement or in information provided at the start of a tenancy.
You should check your individual lease agreement to see if it contains details on how these charges are calculated.
If the property is leased privately (where there is no estate agent managing the property), the landlord cannot charge a re-letting cost because agent fees do not apply to private leases.
Excessive lease-breaking costs
If you believe that you have been charged an excessive amount for breaking the lease and are unable to resolve the issue with your landlord or agent, you can apply to VCAT for a determination. For more information, visit the Residential Tenancies Hub of the VCAT website.
Ending the lease due to severe hardship
In cases of severe hardship, you can apply to VCAT to end a fixed-term tenancy early. You will need to provide evidence of the hardship - for example, bank statements, income statements or proof of medical condition. If VCAT grants you the order, the landlord/agent cannot charge you any lease-breaking fees unless VCAT orders that they can do so.
Where to next: