As a tenant you have rights under the Residential Tenancies Act 1987 and Residential Tenancies Regulation 2006. This factsheet explains the law in NSW about ending a tenancy agreement early.

Can you end your tenancy early?

Yes. No-one can force you to stay in a tenancy. However, if you leave before the end of a fixed-term tenancy agreement, you may end up paying a lot of money.

If you want to leave because the landlord has not done repairs or has broken a term of the agreement, try to have the problem fixed. If the landlord refuses to fix the problem, you can apply to the Consumer, Trader and Tenancy Tribunal (CTTT) for an order that the landlord performs their obligations under the agreement.

If you want to leave for personal reasons, write to your landlord and tell them you want to leave and by when, and try to get their consent. In your letter draw their attention to section 78 of the Residential Tenancies Act 1987 which requires them to take all reasonable steps to reduce their losses. Keep a copy of this letter.

Reducing losses (mitigation)

The landlord must reduce (mitigate) any losses by finding a new tenant as soon as possible. They cannot ask for compensation from you for losses which could be avoided (e.g. they did not advertise for a new tenant straight after you left and want compensation for the lost rent because there was no tenant in the property).

If the landlord does ask for compensation, they will have to prove that they did everything they could to get new tenants into the premises. You can check websites, newspapers and real estate agencies to see if the premises have been advertised after you left.

Assignment to a new tenant

If you have found a new tenant for the premises, you need the landlord's written permission for the new tenant to take over. (The landlord does not have to give their permission however.)

This is called an assignment and requires a document called a 'deed of assignment'. It means that if the new tenant leaves, you may still be held responsible for the premises.

Contact your local Tenants Advice and Advocacy Service for further information.

Ending due to hardship

If you are facing serious hardship you can apply to the CTTT for an order allowing you to end your tenancy agreement before the end of the fixed term. You should provide evidence of your hardship such as bank statements and letters from health workers and support workers.

If the CTTT allows you to break your agreement early, it may order you to pay some money to the landlord to compensate them for lost rent and other losses.

Possible costs of leaving early

Your landlord may let you leave before the end of the fixed term without asking for compensation for any costs. If they do, ask them to put this promise in writing.

It is more likely that you will be asked to compensate the landlord for some, or all, of the following costs:

• an amount equal to the lost rent until a new tenant moves in, or until the end of the fixed term – whichever is the lesser amount
• advertising costs
• a re-letting fee (see below)
• the difference between your rent and the new rent for the rest of the fixed term, if the premises can only be re-let at a lower rent
• fee for preparation of a new agreement, up to a maximum of $15, plus GST.

Re-letting fees

Most landlords pay real estate agents a letting fee for finding tenants. This is charged each time new tenants are found. You may be asked to compensate the landlord for an amount equal to at least part of this fee if you end the agreement early.

Landlords cannot charge a re-letting fee if they are finding new tenants themselves. This can only be charged to you if there is an agreement between the landlord and the agent about what this fee is – ask to see the agent’s ‘managing agreement’ to find out how much.

When your obligation to pay rent ends

Your obligation to pay rent ends when your tenancy agreement ends. This is when you give vacant possession of the property to the landlord usually by returning the keys. You should only pay rent to the landlord up to and including this date – do not pay rent after this date.

Any claim by the landlord for lost rent after this date is a claim for compensation which can either be negotiated between you and the landlord, or determined by the CTTT.

Tips to keep your costs down

• Give the landlord as much notice (in writing) as possible of your intention to leave. Ask them to minimise losses. Keep a copy of your letter.
• Advertise for new tenants on noticeboards in the local area.
• Make the premises available to show to new tenants.
• Encourage interested people to contact the landlord/agent directly.
• Do not leave anything in the premises as the landlord can seek extra costs for abandoned goods.
• On the day you leave, fill out a condition report. Do this with the landlord or agent. If they will not, then fill it out with a friend. Have them sign it, give a copy to the landlord/agent and keep a copy. Take photos.

Getting your bond back

You should claim your bond back immediately after you vacate the premises and return the keys. See Factsheet 03: Bond.

Resolving disputes – Consumer, Trader and Tenancy Tribunal

The CTTT is where landlords and tenants can take disputes, including about the return of the bond and compensation when a tenant ends a fixed-term tenancy early.

Take all relevant evidence with you to the CTTT, especially if you think the landlord/agent has not been trying to get a new tenant in. This might include copies of 'to let' columns from newspapers in your area, a record of ads you have posted in your area, or statutory declarations from people who applied for a tenancy but were rejected.

If the CTTT thinks the landlord did not try to mitigate their losses, it may dismiss the landlord's application or reduce the amount of compensation you have to pay.

However, if the CTTT thinks the landlord did all they could, it may order money to be taken from your bond and make you pay more in compensation.

Updated: June 2009

Further help

Tenants Advice and Advocacy Services: see www.tenants.org.au/publish/contact-us to find your local general or Aboriginal service
Tenants NSW website: see www.tenants.org.au/publish/factsheets for other factsheets and sample letters
NSW Fair Trading Information Centre: 133 220

The information in this factsheet:
• is intended as guide to the law and should not be used as a substitute for legal advice
• applies to people who live in, or are affected by, the law as it applies in New South Wales, Australia.
© Tenants' Union of NSW.