If a renter leaves the property, room or site before their rental agreement ends or leaves without giving notice, they might be breaking their rental agreement. This used to be called breaking the lease.
If the rental provider (landlord) has to cover costs because the renter broke the rental agreement, the renter will usually have to pay them back. These costs might include remaining rent, advertising fees or fees to re-let the property. These are known as ‘lease-break fees’.
However, in some situations, the renter can leave before the end of the agreement without having to pay costs.
If you are experiencing family violence, you can apply to VCAT to end the rental agreement.
On this page:
Or, you can find information about how renters can tell a rental provider they want to leave by giving notice of intention to vacate, or how a rental provider can tell a renter they would like them to leave by giving them notice to vacate on other pages.
What it means to break a rental agreement (lease)
Breaking a rental agreement (breaking a lease) happens when a renter or resident leaves the property:
- without giving notice
- before the end of the rental agreement.
Reasons a renter can end an agreement early without paying costs
There are some reasons a renter can leave early without breaking the agreement and without having to pay costs. These reasons only apply to renters of residential properties and not to residents of rooming houses or caravan parks.
The renter must still tell the rental provider they are leaving by using the proper form and they must give the minimum amount of notice.
|Reason a renter can end an agreement early
||Minimum notice period
|The property doesn’t meet minimum standards before the renter moves in
|A long-term agreement was verbal or didn’t use the right form
|The rental provider has refused to make changes a renter has asked for so that the property is suitable for someone with disability
|The renter needs special and personal care, and needs to move to get this care
|The renter is moving into social housing
|The renter needs temporary crisis accommodation
|The renter was given a Notice of intention to sell unless the rental provider disclosed the proposed sale before entering the rental agreement
There are also some reasons a renter can leave early without breaking the agreement and may not have to pay costs. These reasons only apply to renters of residential properties and not to residents of rooming houses or caravan parks.
|Reason a renter can end an agreement early but VCAT can determine lease break fees if appropriate
||Minimum notice period
|The rental provider has given the renter a notice to vacate because they are making major repairs to the property
|The rental provider has given the renter a notice to vacate because the property is going to be demolished
|The rental provider has given the renter a notice to vacate because the property is going to be used for a business
|The rental provider has given the renter a notice to vacate because the rental provider or their family is going to live in the property
|The rental provider has given the renter a notice to vacate because the property is going to be sold
|The rental provider has given the renter a notice to vacate because the property is going to be acquired for a public purpose
|The rental provider has given the renter a notice to vacate because the rental provider is ending a fixed-term agreement
|The rental provider has given the renter a notice to vacate because the renter is a public tenant and no longer meets eligibility requirements
Residents of residential parks can leave early if they need special and personal care, are moving into social housing or need temporary crisis accommodation. However, they may still have to pay costs.
Renters or residents should use one of these forms to tell the rental provider they will be leaving:
Costs for breaking an agreement (lease)
Renters don’t have to pay a penalty for breaking the agreement, but they do have to cover certain costs so the rental provider doesn’t lose money when the agreement is broken.
A rental agreement may include fees for breaking the agreement. If there are fees listed, the agreement must indicate the reason for the fees.
The costs a renter has to pay depend on the kind of rental agreement and the costs the rental provider has paid.
Costs for lost rent
The rental provider may be able to seek payment from the renter when they leave a property early. VCAT will decide how much the renter should pay and make a compensation order.
For fixed-term agreements that are longer than 5 years, VCAT cannot order the compensation of more than one month’s rent for every 12 months remaining on the agreement. For example, if there are 3 years left on the agreement, the rental provider can ask for 3 months’ worth of rent. They can never ask for more than 6 months’ rent.
However, if the rental provider rents the property to someone else, the renter who broke the agreement doesn’t have to pay rent after the property is re-let. The rental provider must do everything they can to re-let the property or room quickly.
If a renter thinks they were paying rent while the property was re-let, they can apply to VCAT to get their money back. VCAT resolves disputes and makes decisions.
Costs for advertising
The renter may have to cover any reasonable costs that the rental provider or agent has paid to re-advertise the property.
Reasonable costs means costs that most people would think are fair. The law doesn’t define exactly what reasonable costs are, so if people can’t agree what is reasonable, they can apply to VCAT to make the decision for them.
Costs for re-letting fees
Most real estate agents charge rental providers a fee to find a new renter for their property after the old renter leaves. This is called a re-letting fee.
A renter who has broken the agreement may be asked to pay the re-letting fee if the rental provider uses an agent.
The amount they have to pay usually depends on how much of the agreement is left. The renter has to pay the same proportion of the fee as the proportion of time left on the agreement. For example, if the re-letting fee is $500 and there are 6 months of a 12-month agreement left, the renter would have to pay half the fee ($250).
Details about the re-letting fee are often in the rental agreement or information given to the renter at the start of the rental.
Costs a renter doesn’t have to pay
Renters don’t have to pay:
- a penalty for breaking the agreement – they just need to cover costs the rental provider has to pay
- rent when there is a new renter in the property
- advertising fees when the property wasn’t advertised
- re-letting fees if the property is rented directly with the owner and not through a real estate agent.
If a renter thinks costs are too high
If a renter thinks they have been charged too much money for breaking the agreement, they should try to negotiate with the rental provider or agent.
If the negotiations don’t succeed, the renter can apply to VCAT to decide whether the charges are fair or not.
If a renter refuses to pay costs
A rental provider can apply to VCAT to order a renter who has broken an agreement to pay costs. VCAT will work out how much the renter has to pay.
Leaving early because of hardship
If a renter is experiencing difficulties, they can apply to VCAT to break an agreement without having to pay any costs. These difficulties are called severe hardship. They might include loss of income, a serious medical condition, or a family tragedy.
If a rental provider has applied to VCAT for compensation because a renter has left early, VCAT must consider whether the renter would have experienced severe hardship if the agreement had continued.
Forms you might need
To give notice of intention to vacate, use one of these forms:
Renting law reforms
Victoria made significant changes to renting laws in 2021.
Some of the major changes to laws about breaking rental agreements include:
- rental agreements must not include fixed fees for terminating an agreement early unless the basis for calculating the fixed fees has been set out in the agreement
- renters do not have to pay lease break fees in certain circumstances
- VCAT can take a renter’s severe hardship into account when calculating compensation to a rental provider for breaking an agreement.
Some language also changed:
- Landlords are now called rental providers
- Tenants are now called renters
- Leases are now called rental agreements.
You can read about these and other changes in a summary of the reforms or in detailed fact sheets and guides.
Sections of the Act
If you want to know what the law says about breaking a rental agreement, you can read these sections of the Residential Tenancies Act 1997:
- Part 2 – Subdivision 4 – Notice of abandonment by renter
- Section 211A – Further matters to be considered by Tribunal