Can A Landlord End A Lease Early – Martin and Grace Version
There are several circumstances when a landlord may need to terminate a lease before the end of the fixed term period. It may be for a serious breach by the tenant or non payment of rent. The landlord will need to apply to the tribunal for a termination order and issue a termination notice to the tenant.
Find out more about when a lease can be terminated, what penalties apply and what minimum notice is required.
Let’s take a closer look.
What Reasons Can A Landlord Terminate A Tenancy?
There are several circumstances when a landlord can terminate a rental lease agreement. They must ensure that they do so according to the law or risk having the termination order denied by the tribunal.
These are some of the reasons why a landlord may wish to issue a termination notice;
End Of Fixed Term Lease
When a lease has a fixed period, the landlord can lawfully terminate the tenancy at the end of the fixed term, and they must give at least 30 days notice. A landlord is not permitted to terminate a fixed term lease before the end date without a specific reason, or they risk being challenged at the tribunal.
Termination Of A Periodic Tenancy
A periodic agreement enables the landlord to give notice at any time during the lease. They must provide at least 90 days notice before the termination date. If the tenant refuses to vacate the premises by the requested date, the landlord can approach the tribunal for a termination order. The tribunal will only issue the order if the termination request from the landlord is valid.
Sale Of The Property
If a landlord has signed a contract to sell the property, the premises must be handed over vacant, as generally, the buyer will require vacant possession.
Depending on the type of lease agreement, the landlord can give a termination notice to the tenant, providing there is a 30-day notice period. If there is a fixed term agreement, the termination date must be after the end of the lease.
Tenant Breach Of Agreement
When signing a residential tenancy agreement, the tenant agrees to comply with the terms as stated in the contract. If they breach any of the terms, the landlord is permitted to issue a termination notice at any time during the tenancy agreement. The termination date must be at least 14 days after the tenant has been given the notice.
For a termination order to be issued, the landlord must prove the following;
- The termination notice was given according to the law, and the tenant is refusing to vacate the premises
- The tenant has breached the tenancy agreement
- The breach is severe enough to justify termination of the agreement; for example, and it may cause harm or loss to the landlord
If the property has multiple tenants, all house occupants are responsible for any breach from any other co tenant.
When Would A Tribunal Deny A Termination Order?
When a tenant breaches their residential tenancy agreement, the termination must be justified or severe enough to warrant an eviction. The tribunal will only make the order if it is very severe. The following examples are when the tribunal is less likely to issue a termination order;
- Tenants have been at the rental property for a long time
- Rent increase makes property unaffordable for the current tenant
- Unnecessary disruption and trauma to children living on the premises
- No alternative accommodation options for the tenant
- Medical conditions or disabilities would cause undue hardship to the tenant
- The tenants’ breach was accidental
- The landlord breached the tenancy agreement
Conversely, if a tenant made unauthorised alterations to the rental premises, was uncooperative and caused a nuisance, or has alternative accommodation. The tribunal may be more likely to issue the termination order.
Non Payment Of Rent
If the rent payment is more than 14 days overdue, the landlord can issue a termination notice for breaching the terms of the tenancy agreement. The notice must state that it is for non payment of rent and also notify the tenants that if payment of overdue rent is made, they are not required to leave the premises.
When issuing the termination notice, a notice period of 14 days must be provided.
A landlord can issue a notice of demand asking the tenants to pay rent within 14 days to avoid giving a termination notice.
A tenant may also be able to avoid vacating the premises if they enter into a repayment plan, which can allow the tenant to pay rent that is overdue over a more extended period. This can be particularly advantageous if the tenant has suffered hardship, such as loss of employment or illness.
The landlord or real estate agent must keep a rental ledger that accurately records all tenant rent payments.
Severe Damage Or Injury Caused By Tenant
A landlord can apply to the tribunal for a termination order at any time during the tenancy agreement if the tenant or other occupant at the property incurs severe damage or injury to the property or associated people. This can include the landlord, agent, contractor or any people in neighbouring properties.
If the tenant deliberately and recklessly causes damage to the rental property or neighbouring properties, they will likely be issued a termination notice.
In urgent circumstances, the landlord can apply for a termination order without providing the tenant with a termination notice. If successful, the tribunal can order immediate repossession of the rental premises by the landlord.
Illegal Use Of Premises
If a tenant uses the rental premises to conduct illegal activity, the landlord can apply to the tribunal for a termination order.
This can include manufacturing, cultivation, supplying and selling illegal drugs or using the property to conduct organised crime. If the property is not being used for manufacture and supply and if there is only a small quantity of drugs, the tribunal is less likely to issue the order.
The landlord is not required to provide a termination notice before applying for the order, but if the situation is not urgent, they should notify the tenant beforehand.
Threatening, Abusive or Intimidating Behaviour
A landlord can apply to the tribunal for an order if they are the victim of abuse, threats, intimidation or harassment from the tenant or any occupant on the premises.
Severe or persistent threats or abuse to the landlord, agent, employee, or contractor all warrant termination.
For urgent circumstances, the tribunal can order immediate repossession of the property, and the tenant will have to vacate as soon as possible or risk being evicted by authorities.
Landlord Experiences Hardship
If a landlord is due to suffer undue hardship or injustice if the tenancy continues, they can apply to the tribunal for an eviction order. This would only occur in particular circumstances, such as their current home being destroyed by fire, and they need the rental premises as no other accommodation options are available.
In some cases, the landlord may have to compensate the tenant for any losses they incurred due to the termination. For example, they may have to pay for the bond at a new rental location or assist with costs associated with moving.
What Is Termination Without Grounds?
If a tenant is in a fixed agreement, the landlord cannot end the lease before the last day without a valid reason. A notice period of at least 30 days must be provided if the landlord wishes to terminate the tenant’s lease at the end of the fixed term period.
In a periodic agreement, if a landlord provides a 90-day notice period, they can request that the tenant vacate the premises without any reason / without grounds.
What Are The Minimum Notice Periods?
Minimum notice periods to vacate a rental premises vary depending on the type of tenancy agreement. Generally, a rental will be a periodic or fixed term agreement. A fixed term is for a specified period with a defined end date, and periodic is when no fixed term is specified.
The notification periods will also differ depending on the grounds for termination.
- If the periodic or fixed term agreement has been breached, the landlord must only provide 14 days notice to the tenant.
- When a landlord wishes to sell their rental premises, they must wait until the end of the fixed term agreement before requesting that the existing tenant vacate the property. But with a periodic agreement, the minimum notice period is 30 days.
- If there has been a breach of the residential tenancy agreement, the landlord is permitted to provide 14 days notice for both a fixed term tenancy and a periodic agreement.
There are certain circumstances when a landlord is not required to provide any minimum notice for lease termination and can have the property immediately repossessed.
For example, the property has become unlivable due to a natural disaster, the death of a sole tenant, personal hardship, being used illegally or abusive and threatening behaviour from the tenant.
There are several reasons a landlord may wish to terminate a rental agreement, and the landlord must correctly serve the notice. If the procedures are not followed correctly, the notice can become invalid.
The termination notice must be either;
- Handed to the tenant in person
- Given to someone over the age of 16 at the tenant’s rental premises or workplace
- Put in the tenant’s letterbox at the rental location
- Posted to the address provided by the tenant
- Emailed to the address provided by the tenant
No proof of service is required, but the landlord should record the date and manner that the termination notice was served.
What Must A Termination Notice Include?
A landlord can issue a termination notice anytime and does not have to align with the rent payment cycle. The document must include the following:
- Termination notices must be in writing
- The document must be signed and dated by the issuer
- The address of the rental property must be stated
- Reasons for issuing the notice must be listed
- The notice must include a termination date
Eviction: What Are The Rights Of A Tenant?
When a tenant receives a termination notice from their landlord, they have a couple of options:
- Comply with the request and vacate the property by the termination date, or
- If they believe the request is invalid, they can challenge the termination
- The tenant and landlord should first attempt negotiation to reach a mutually agreeable solution. Allowing extra time for the tenant to find alternative accommodation may be a possible solution.
- If unsuccessful, the tenant can challenge the validity of the termination and apply to the tribunal. They may claim that the eviction was retaliatory.
- If the tenant refuses to move out, the landlord may seek an order from the tribunal to confirm the termination, and the tenant will be forced to leave.
What is Retaliatory Eviction?
A tenant has legal rights when occupying rental premises, such as asking for repairs to be carried out on the property. If a landlord tries to end a tenancy after a tenant attempts to enforce their legal rights by making a request, the tribunal may consider this to be retaliatory eviction, which could result in their refusal to issue a termination order.
An application for retaliatory eviction must be made within 14 days of receiving notice. If a landlord has been granted a hearing, the tenant must attend court to argue their retaliatory eviction case.
The tribunal will consider the circumstances, including any hardship caused to either party, before making an order.
When Can A Tenant Break A Fixed Term Lease Without Penalty?
When tenants sign a fixed term rental agreement, they agree to commit to staying at the rental premises until their tenancy agreement ends, or they may face penalties.
There are some circumstances where a tenant is permitted to break a fixed term agreement and get out of the agreement early without costs involved. The tenant should provide 14 days written notice to end the agreement under the following conditions;
- A social housing offer has become available
- Moving into a nursing home or aged care facility
- The property has been listed on the asbestos insulation register
- Experiencing extreme undue hardship
- Victims of domestic violence
The tenant will be responsible for paying rent until they provide vacant possession of the property. They should give the landlord as much notice as possible and allow them to show the property to new prospective tenants,
Ending A Tenancy Because Of Domestic Violence
A tenant is permitted to break a periodic lease or fixed term tenancy without providing any notice if they are experiencing circumstances of domestic violence.
The tenant or a dependent child may be victims of domestic violence during their tenancy. Or are protected by a domestic violence order (DVO) or have a family law injunction.
The tenant must provide acceptable evidence with their domestic violence termination notice. Acceptable evidence may include; a copy of the DVO, conviction notice, family law injunction or a declaration from a competent person.
Who Can Make A Domestic Violence Declaration?
Several professionals are now considered “competent” and can provide a domestic violence declaration for a tenant. Previously only medical practitioners were capable of providing the relevant documentation.
The following people may provide a declaration;
- Registered health practitioner
- Social worker
- NSW government employees who work in child protection
- Government funded domestic violence, refuge and emergency housing workers
- Approved counsellors
How Much Is A Mandatory Break Fee?
In most cases, when the tenant breaks a fixed term agreement, they will be required to pay the penalty called a break fee. The amount that needs to be paid varies depending on how far into the rental agreement it was cancelled. Also, when the agreement was made.
For example, if a tenant has only been in the property for less than 25% of the rental agreement period, they are required to pay four weeks rent as a break fee.
On the other hand, if the tenancy is almost completed and the tenant has already stayed for more than 75% of the rental period, in that case, only one weeks rent is due.
For agreements signed before Mar 2020, tenants should check their tenancy agreement for details of the optional break fee clause. Depending on how far into the tenancy agreement, they may be liable to pay 4-6 weeks rent.
If a tenant terminates a lease early, it may be a costly exercise; also, they could risk being listed on a tenancy database, which is run by companies that keep information on prospective tenants, which may be disadvantageous for future rental acceptance. Agents and landlords are not permitted to list tenants on a tenancy database if their lease has been terminated due to domestic violence.
When a lease has a fixed term, the landlord can lawfully terminate the tenancy at the end of that period; they must give at least 30 days notice. A landlord is not permitted to terminate a fixed term lease before the end date without a specific reason, or they risk being challenged at the tribunal. A periodic agreement enables the landlord to give notice at any time during the lease. They must provide at least 90 days notice before the termination date.
There are several circumstances when a landlord can terminate a tenancy agreement. They must ensure that they do so according to the law or risk having the termination order denied by the tribunal. Some examples include non payment of rent, a breach of the rental agreement or the sale of the property.
It is crucial when serving a termination notice that it is served correctly. If the procedures are not followed properly, the notice can become invalid.
When tenants receive a termination notice from their landlord, they can comply with the request or challenge the termination.
Minimum notice periods apply, and in most cases, when fixed term agreements are broken, the tenant will be required to pay the penalty called a break fee. There are exceptions to the rule, such as victims of domestic violence or moving into social housing.
When tenants sign a fixed period rental agreement, they agree to commit to staying at the rental premises until their rental agreement ends, or they may face penalties.
There are some circumstances where a tenant is permitted to break a fixed period agreement and get out of the agreement early without incurring any costs.