Now that you’ve got your brand-new full turnkey home thanks to Darren Walters and his team at No1 Property Guide, it’s time to get out of your rental lease. And this most likely means you’ll need to know how to break a lease. If you were lucky with the timing or planned it perfectly, your lease will end around the same time your new home is ready to move into.
If so, good job! Move-in and start enjoying that new home. But, in the more likely scenario that you have 2+ months left on your rental lease, you’re going to have to break that lease.
But what are your options when breaking your tenancy agreement? And what’s the best way to go about it? We’ve compiled everything you’ll need to know about the do’s and don’ts of breaking a lease when it’s time to move into your new home.
Speak to Your Real Estate
Your first, and frankly best, option is to have an honest conversation with your real estate. To begin with, just packing everything and leaving in the middle of the night is definitely not the move. So, you’ll need to inform your real estate you plan to leave anyway.
On that note, you’ll need to fill in a Form 13 (notice of intention to leave form) when giving your notice.
Tell your property manager when you’re planning to move out and why, discuss what your options are. If you’re lucky (very lucky) they might just be super happy for you and agree to let you move out on your chosen date. Assuming you fulfill the standard moving out procedures.
This is more likely if your rental is in a high-demand area and the real estate knows they can find a new tenant quickly. Unfortunately, this situation isn’t overly common, and you will probably need to follow the usual guidelines for a broken lease in your state or territory.
Darren Walters is Australia’s leading no or low deposit expert and created No1 Property Guide to help everyone achieve their homeownership dreams.
“Knowing how to break a lease cleanly and legally is a vital step in moving from renting to homeownership.”
Darren Walters, CEO & Founder of No1 Property Guide
In most cases, this will mean paying reasonable re-letting costs (one week rent + GST) as compensation for losses. You may also need to pay reasonable advertising costs (if incurred) and pay rent until your property manager finds a new tenant or your lease end date is up, whichever comes first.
That last part is probably the most important. If you decide to just up and leave without paying your dues, your real estate can take your bond. And they’ll almost definitely put your name on a tenancy blacklist. This might not sound like an issue when you’re buying a new home. But if you ever go back to renting, being on a blacklist will make it harder to be approved for a rental.
In the end, this is one of the best things about owning your own home. You’re no longer accountable to a real estate agent or landlord. And you’ll be paying off your own mortgage as well. The New Home Specialists at No1 Property Guide can walk you through the process to get you into your new home sooner.
Of course, there are some ways you can reduce your costs or possibly break your lease without paying rent or losing your bond.
Try Find Someone to Take Over Your Lease
The easiest way to reduce your break lease costs is to have someone ready to take over your lease. Try to find someone who loves your place and wants to move in. They’ll still need to be approved by the real estate of course. But if they’re approved and can move in to cover as soon as you’re gone, then you’ll save yourself additional rent and advertising costs.
Of course, this isn’t always possible. But it’s a great option and the best situation outside coming to an agreement with your real estate.
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Buy Out of The Lease
This option depends on your lease, but in some cases it’s possible to ‘buy’ out of your lease. This is essentially a set amount agreed upon in the contract that you can pay to break the lease. The usual end of lease conditions still apply though (leaving it in the same condition you arrived etc).
Buy out clauses aren’t often written into leases. So, this is usually something you will need to bring up and many real estates might not offer it. But if your lease does include one, it’s a viable option and can possibly be the cheapest option.
Try to Cancel the Contract Legally
Your final option is a bit of a hail Mary. You can also end or break a lease with your real estate if you’re able to prove they’re not fulfilling their end of the agreement. Whether they’re not fulfilling repairs, or they’ve broken other rental laws, if you’re able to prove your real estate hasn’t upheld their end of the lease, you can break it without losing your bond or any more rent.
An important note. You aren’t legally considered to have broken the lease until you leave the property and hand back the keys. Regardless of the method you’re using to break your lease. Until then you are still considered as a tenant and must fulfil your standard obligations.
Buying a new home is an exciting time, don’t ruin it with a broken lease gone wrong. Make sure you talk to your real estate as soon as you know you’ll be moving out. And start organising paperwork and removalists. If your lease is up while you’re waiting for your new home to be built, discuss going on a week-by-week lease. A lot of real estates will be ok with this as long as you provide reasonable notice of your exit date.
If you’re just beginning your journey to get out of the rental loop, contact No1 Property Guide to speak to one of our New Home Specialists. Or take our pre-qualification assessment to discover your options today.