Breaking a lease in Victoria can come with financial consequences, and it’s important to know the costs involved. Whether you’re relocating, facing unforeseen circumstances, or simply want to leave your rental early, understanding the Residential Tenancies Act 1997 (VIC) will help you avoid unnecessary penalties.
In this guide, we’ll explain the break fees, re-letting charges, and how using Leaso.com can help minimise your expenses by connecting you with new tenants quickly.
What Is the Cost of Breaking a Lease in Victoria?
In Victoria, tenants who break a fixed-term lease early may be required to pay several costs, including break fees and re-letting fees. These fees are meant to compensate the landlord for the financial loss they may face while finding a new tenant.
Break Fees
A break fee is an amount tenants may have to pay when they terminate their lease before the agreed-upon end date. The specific amount depends on what’s outlined in your lease agreement. Typically, break fees are calculated based on how much of the lease term is left:
Less than half of the lease term remaining: The break fee is usually equivalent to four weeks' rent.
More than half of the lease term remaining: The fee typically drops to two weeks’ rent.
These fees help the landlord cover lost rental income during the vacancy.
Re-letting Fees
In Victoria, if your lease doesn’t specify a break fee, the landlord may charge you a re-letting fee. This covers the costs associated with finding a new tenant, such as:
Advertising costs: These can range from $100 to $300 depending on the method of advertising.
Agent fees: If the landlord uses a real estate agent, the re-letting fee can be equivalent to one to two weeks’ rent.
Additionally, if you vacate the property without providing enough notice, you may also be responsible for ongoing rent payments until a new tenant is found.
How to Avoid Paying High Break Fees
While break fees are legally enforceable, there are ways to minimise or avoid these costs. By using the right strategies and tools, you can save yourself from paying high penalties when breaking a lease.
1. Find a New Tenant with Leaso.com
One of the best ways to avoid paying break fees is to find a new tenant to take over your lease. Leaso.com makes this process easy by connecting you with renters who are actively searching for properties.
Here’s how Leaso.com can help you:
Advertise your rental: Create a detailed listing that showcases the best features of your property and attracts renters quickly.
Match with verified tenants: Leaso.com’s matching system connects you with potential renters who are ready to move in, minimising vacancy time.
Streamline communication: Chat directly with potential tenants, schedule viewings, and finalize the lease transfer—all through the platform.
By replacing yourself with a new tenant quickly, you can avoid paying extended rent or re-letting fees.
2. Negotiate with Your Landlord
In some cases, landlords are open to negotiating if you’re able to help them find a new tenant quickly. Offering to cover minor costs, such as cleaning fees, might encourage them to waive or reduce the break fee.
3. Provide Adequate Notice
If you're nearing the end of your lease term and are considering moving out early, providing 28 days’ notice can help reduce potential costs. Always review your lease agreement and give the required notice in writing.
Can You Break a Lease Without Paying Fees in Victoria?
In some circumstances, Victorian tenants are legally allowed to break their lease early without facing penalties. These include specific situations where tenants are not liable for break fees or re-letting costs.
Valid Reasons to Break a Lease Without Penalty
Victorian law outlines a few scenarios in which tenants can break a lease without financial penalties:
Property Uninhabitable: If the rental property becomes uninhabitable due to severe damage or disaster, you can terminate your lease without incurring break fees.
Landlord Breach of Contract: If the landlord fails to meet their legal obligations, such as not carrying out essential repairs or breaching your right to quiet enjoyment, you can apply to the Victorian Civil and Administrative Tribunal (VCAT) to terminate the lease without penalty.
Family Violence: Victims of family violence can apply to VCAT for an order to end their lease early without paying a break fee.
In all these cases, you must provide 14 days' notice and ensure proper documentation is submitted.
What Happens If You Don’t Pay Break Fees or Follow the Legal Process?
Failing to follow the legal process for breaking a lease can result in serious consequences, both financial and legal. Here’s what you might face if you don’t meet your obligations:
Ongoing Rent Liability
If you vacate the property without giving the required notice or finding a replacement tenant, you may be held responsible for rent until the landlord secures a new tenant. This could mean weeks or even months of additional rent payments, depending on the market conditions.
Re-letting Fees and Advertising Costs
If your lease doesn’t specify a break fee, landlords can charge you for the costs of re-letting, which include advertising and agent fees.
Damage to Your Rental History
If you leave without paying the required fees or following the legal process, your landlord may report the breach to rental databases. This can harm your rental history, making it harder to find a new property in the future.
Legal Action
In some cases, landlords may take legal action to recover unpaid rent or costs associated with breaking the lease. This can lead to a VCAT hearing, where a tribunal may issue a ruling that requires you to pay compensation.
How Leaso.com Can Help You Break a Lease Cost-Effectively
Finding a new tenant is one of the most effective ways to reduce or avoid the costs associated with breaking a lease. Leaso.com is the leading platform for lease transfers and subletting, helping tenants exit their leases without incurring hefty fees.
Here’s why Leaso.com is your best option:
Advertise your property: Create a listing that highlights your property’s key features and attracts potential tenants.
Connect with verified renters: Leaso.com matches you with renters who are ready to take over your lease, minimising vacancy time and reducing costs.
Streamline the process: Leaso.com allows you to chat with potential tenants, schedule viewings, and manage the lease transfer process—all in one place.
By using Leaso.com, you can avoid paying extended rent or break fees, ensuring a smooth transition for both you and your landlord.
Conclusion
Breaking a lease in Victoria can come with significant costs, but by understanding your legal obligations and using tools like Leaso.com, you can minimise those expenses. Whether you’re leaving a fixed-term or periodic lease, finding a replacement tenant quickly can help reduce break fees and avoid additional costs. Follow the steps outlined in this guide to ensure a smooth and cost-effective exit from your lease.