I need some space… Breaking up with your rental - How to break your lease

Here's a quick guide on how to break your lease without breaking the bank, and with no hard feelings left behind. Let's begin.

By now, we are all aware of the sweeping changes COVID-19 has brought into our daily lives. You may, however, not be aware of the changes to the ways you can end your lease early if you are renting your home. These laws apply to fixed-term leases (usually 6- or 12-month rentals) until 28 March 2021. 

Rooming houses and caravan parks: These changes only apply if you have a tenancy agreement (a written agreement between you and the property owner).

What are my options?

1) By agreement

Often, the simplest (and cheapest) way to end your lease early is by mutual agreement with your landlord. If your landlord agrees, you should:

• get the agreement in writing;
• ensure the agreement excludes you from any liability for costs or compensation in relation to breaking the lease;
• ensure you and your landlord or agent sign the agreement; and
• keep a personal copy of the agreement.

2) By assignment

In some cases, assigning your tenancy agreement to another tenant is an easier option. You will still need to get your landlord’s consent, update the tenancy agreement and arrange for the transfer of the bond so you cannot be held accountable for the other tenant. It is important to know that this option may have some costs involved as your landlord can charge you the cost of preparing the assignment.

3) Due to hardship

Even if your landlord does not agree, you may still be able to end your lease early if staying in the property will cause you what is classified as ‘severe’ hardship. You will need to apply to the Victorian Civil and Administrative Tribunal (‘VCAT’) for this. At your hearing, you will be required to prove that the hardship you will suffer if the tenancy is not ended will be greater than the hardship of the landlord if the tenancy is ended. Your individual circumstances will be considered, however, severe hardship may include:

• being unable to pay rent for a reason related to COVID-19;
  
  
• if you need to leave for your safety because of family violence; and
  
  
• if you have been ordered to stay away from the house in a family violence intervention order or personal safety intervention order.
  
  

If VCAT grants you the order, your landlord/agent cannot charge you any lease-breaking fees unless VCAT orders that they can do so.

You should not stop paying rent until you have an order from VCAT that terminates or reduces the lease, or a clearly written agreement with the landlord that sets out what compensation you need to pay (if any). Paying rent in this period usually costs less than breaking a lease. See ‘Applying to VCAT’ below.

4) When the landlord is in breach

If your landlord has breached their duties, you may be able to end your lease early without excess costs involved. This may be the case if your landlord:

• hasn’t made sure the property was reasonably clean and vacant when you were supposed to move in;
• doesn’t make sure you have ‘quiet enjoyment’ of the property;
• doesn’t keep the property in good repair;
• doesn’t provide locks that secure external doors and windows, or doesn’t give you a key when they change a lock; or
• doesn’t replace a faulty water appliance with an A-rated appliance.

If any of the above breaches have occurred, you may seek to end your lease early by taking the following steps:

• Step 1: Send your landlord a Breach of Duty Notice found here.
• Step 2: If the breach has not been fixed within 14 days of the above notice, you can apply to VCAT for a Compliance Order.
• Step 3: If your landlord fails to abide by the Compliance Order, you can give your landlord a Notice of Intention to Vacate found here. You can also send this notice if you have sent them a Breach of Duty Notice twice before for the same breach, and the landlord breaches that duty for a third time.

See ‘Applying to VCAT’ below.

5) By vacating

If none of the above options apply, you may end your lease early by giving your landlord (or agent) a Notice of Intention to Vacate found here. It is important to keep a personal copy of your notice and leave on the date stated. 

If your landlord disagrees with your notice, they can apply to VCAT for your bond and/or compensation. You may be liable for:

• rent for a reasonable time until a new tenant is found or until the end of the fixed term (whichever happens first);
• a reletting fee (usually about 1-2 weeks’ rent); and 
• reasonable advertising costs. 

You are only required to pay the reletting fee and advertising costs on a pro-rata basis. For example, if you leave 7 months into a 12-month tenancy agreement, there is only about 40% of the fixed term remaining so you only have to pay 40% of the reletting fee and 40% of the advertising costs.

What should I do after giving my notice?

• Make sure your landlord or agent are taking steps to find a new tenant. If they are making it harder for themselves to find a new tenant (e.g. increasing the rent), you may not be required to pay the full amount of compensation.
• While you are not required to find a replacement tenant yourself, sometimes it may be helpful and convenient to recommend someone. 
• If you disagree with costs your landlord is asking you to pay, do not pay them. Your landlord will then be required to apply to VCAT where reasonable compensation will be determined.
  

Applying to VCAT

1) Register your application with Consumer Affairs Victoria here.

Consumer Affairs Victoria will decide whether it is most appropriate for your matter to go through its own dispute resolution process or be heard at VCAT. Your matter cannot be heard at VCAT unless you have registered your application with Consumer Affairs Victoria and they have provided you with a referral to VCAT.

2) Apply to VCAT here.

If Consumer Affairs Victoria provides a referral to VCAT, they will give you a reference number to include in your VCAT application.

Your VCAT application should include proof that you will suffer severe hardship if your lease does not end early. Otherwise, you must email it to VCAT at least 48 hours before your hearing.

You should include the following with your application:

• a copy of the tenancy agreement.
• explain what has happened.
• specify when you want the fixed-term agreement to end (where relevant)
• a copy of your intervention order (where relevant)
• bank statements (where relevant)
• income statements (where relevant)
• proof of medical condition (where relevant)
• a letter stating you have lost your job (where relevant).

If VCAT fees would cause you financial hardship, you can apply for fee relief at the same time you apply to VCAT by completing a Fee Relief Form found here.

3) Prepare for your hearing

VCAT will contact you to let you know when your hearing will be. Due to COVID-19, hearings are currently being conducted remotely over the phone. VCAT is less formal than a court and you do not need a lawyer. However, sometimes it can be helpful to seek some legal information or advice before your hearing. 

• Prior to your hearing date, you can reach out to your local community legal centre who may be able to assist you by providing further information. Find your local centre here.
• On your hearing date, you may receive support from the following VCAT services: interpreters, disability, security, family violence and Koori support. If this would be helpful to you, let VCAT know at the time you make your application.

References

https://www.legalaid.vic.gov.au/find-legal-answers/covid-19-coronavirus/ending-your-tenancy

https://www.tenantsvic.org.au/advice/common-problems/breaking-your-lease/

https://www.vcat.vic.gov.au/case-types/residential-tenancies/apply-residential-tenancies