Breaking a Lease – What are your responsibilities?

by QCAT Adjudicator Jeremy Gordon

The end of the year and holidays can bring about planned or unexpected change in many aspects of life, including accommodation arrangements. QCAT Adjudicator Jeremy Gordon says tenants, lessors and property managers should be aware of their responsibilities and the legal consequences associated with broken lease arrangements.  

He says the main issues to consider are:

  • termination of the tenancy
  • monetary compensation to the lessor.

The Residential Tenancies and Rooming Accommodation Act 2008 (the Act) sets out the need for some formality in terminating a tenancy.

By far the easiest way to terminate or break a lease is by a written termination agreement signed by both the tenant and the lessor (or property manager).

Most property managers will use a standard form of termination agreement. Some care needs to be taken with these. Most are perfectly fair, but if they try to impose further obligations upon the tenant than are provided by the Act those provisions may be void. An example would be a provision that the tenant pay fees greater than the reasonable costs of re-letting the premises.

Termination agreements also often include a provision that a tenancy (or at least the obligation to pay rent) continues until the premises are re-let. It is likely that it would be implied in such agreements that the lessor or property manager must use reasonable efforts to re-let the premises quickly.

Informal agreements to terminate are not recognised under the Act and can cause trouble. They may mean that in law a tenancy continues even after vacant possession is given, contrary to the intentions of both sides.

A tenant with grounds to terminate (for example excessive hardship), can apply to QCAT for a termination order. This will be an urgent application and come to hearing quite quickly, but the tribunal cannot backdate the termination order, and meanwhile the tenant will be responsible for the rent and other obligations under the tenancy agreement.

If QCAT makes a termination order then a tenant will not be in breach of the tenancy agreement and no further monetary compensation will be payable to the lessor from the date of termination.

Otherwise the tenant should compensate the lessor for the loss of rent arising from the break lease. This will be an amount equal to the rent until the end of the fixed term or earlier re-letting. The lessor and property manager must use reasonable efforts to re-let the premises quickly. A break lease fee will usually be charged by the property manager to the lessor, as will the cost of advertising, and these charges in so far as reasonable will also be payable by the tenant.

If recovery of monetary compensation from the tenant is required or there is a dispute about the amount of compensation, an attempt to conciliate the issue must first be made with the RTA ahead of an application being made to QCAT. The tribunal cannot deal with the matter unless this has occurred and a Notice of unresolved dispute has been issued.

For more information about residential tenancy and QCAT visit www.qcat.qld.gov.au

Jeremy Gordon is a QCAT Adjudicator specialising in hearing of residential tenancy cases.