When a Tenant Wants to End a Fixed-Term Agreement Early

Why Early Exits Matter

Tenants ending a fixed-term lease early is one of the most stressful situations for landlords. The good news is that landlords have strong protections — as long as you follow the correct process. You cannot force tenants to stay, but you can recover reasonable costs caused by the early termination.

Can a Tenant End a Fixed-Term Lease Early?

Yes — but they cannot simply walk away.

• A tenant can request to end a fixed-term lease early
• A landlord cannot force them to stay
• A landlord can recover reasonable costs caused by the early termination
• The tenant remains responsible until the property is re-let or the fixed term ends

The bottom line: The tenant can leave early, but they must compensate you for the loss.

Can You Reject the Request?

You cannot reject the fact that they want to leave, but you can enforce the financial consequences.

You cannot reject:

• A request to walk away without paying break-lease costs
• A request to avoid advertising or re-letting fees
• A request to avoid rent until a new tenant is found
• A request to transfer the lease to someone unsuitable

What You Can Charge the Tenant For

Across Australia and New Zealand, landlords can charge reasonable costs directly caused by the early termination. You must take reasonable steps to re-let the property quickly.

You Can Charge For:

• Rent until the property is re-let — or until the fixed term ends, whichever comes first
• Advertising and marketing costs — realestate.com.au, Domain, photography, signage, etc.
• Re-letting or leasing fees — if you use an agent, you can charge the pro-rated portion of the leasing fee
• Rent shortfall — if the new tenant pays less rent, the outgoing tenant covers the difference until the original fixed term ends
• Cleaning or damage — if the tenant leaves early and the property is not returned in the required condition

You Cannot Charge For:

• Future or speculative costs (you must have actual invoices or quotes)
• Costs unrelated to the early termination (routine maintenance, upgrades, improvements)
• Excessive or inflated advertising costs (costs must be reasonable and reflect the local market)

What If the Tenant Wants to Transfer the Lease to Someone Else?

This is called Assignment (most jurisdictions), Transfer (NZ), and Novation (legal term).

Your Rights:

• The tenant must get your written consent
• You cannot unreasonably refuse a suitable replacement tenant
• You can refuse if the replacement is unsuitable
• You can charge reasonable costs for the transfer

Important: You cannot charge a fee higher than your actual costs.

Step-By-Step Process for Landlords

Step 1 – Get the Request in Writing

Ask the tenant to confirm:

• Their intended vacate date
• Whether they want to provide a replacement tenant
• Whether they understand break-lease costs

Step 2 – Explain the Break-Lease Costs

Provide a clear breakdown of:

• Rent until re-let
• Advertising
• Re-letting fees
• Rent shortfall (if applicable)

Step 3 – Ask if They Want to Find a Replacement Tenant

If yes: screen them as you normally would. Approve or decline based on suitability.

Step 4 – Advertise the Property (If Needed)

You must take reasonable steps to re-let. This demonstrates good faith and minimizes the tenant's liability.

Step 5 – Final Inspection

Normal exit rules apply. Conduct the final inspection to document condition.

Step 6 – Claim Bond If Needed

Claim for unpaid rent, damage, cleaning, and break-lease costs where allowed.