Break lease clause: what a tenant pays to leave early

Sample clause

Written for a 12 month residential tenancy in Newcastle, New South Wales, where the fictional tenant Sam Heller needs to leave after 5 months for a job interstate.

Ending the Fixed Term Early. (a) If the Tenant ends this agreement before the end of the fixed term, other than for a reason the law allows without penalty, the Tenant must pay a break fee of: (i) 4 weeks' rent, if less than 25% of the fixed term has expired; (ii) 3 weeks' rent, if 25% or more but less than 50% has expired; (iii) 2 weeks' rent, if 50% or more but less than 75% has expired; (iv) 1 week's rent, if 75% or more has expired. (b) The break fee is the only amount payable for ending the fixed term early, apart from rent up to the date the Tenant gives vacant possession and any amount for damage. (c) This clause applies only to a fixed term of 3 years or less.

Sample wording, not legal advice.

Variants

What to negotiate

• Fees

  In NSW the break fee cannot be more than the schedule for fixed terms of 3 years or less, and landlords cannot add extra fees for ending early. In states without a fixed fee, tenants can ask the landlord to agree a fixed amount in advance, which gives certainty, though any agreed amount must comply with the state law and cannot exceed what the law allows.

• Advertising and letting costs

  Where the tenant pays re-letting costs, the usual approach is a proportion of the letting fee matching the time left on the lease, plus reasonable advertising. A tenant leaving with two months of a twelve month lease left should not pay a full letting fee. Ask for receipts and check the amounts against what the state authority describes as reasonable.

• Rent until re-let

  Tenants in states without a fixed fee keep paying rent until a new tenant moves in or the term ends, but the landlord must try to re-let and cannot wait out the lease. Tenants can help by finding a suitable replacement tenant, which the landlord should consider reasonably. Agree in writing the date rent stops.

The risk of leaving it out

In NSW, the statutory break fee applies to fixed terms of 3 years or less even if the agreement does not repeat it, so leaving it out mainly causes confusion. In other states, a lease silent on breaking early leaves the parties to argue about compensation under the general law. A clear clause tells both sides what to expect before anyone needs to leave.

State by state

New South Wales: under the Residential Tenancies Act 2010, for fixed terms of 3 years or less, the break fee is 4, 3, 2 or 1 weeks' rent depending on whether less than 25%, 25% to 50%, 50% to 75% or more than 75% of the term has expired. Victoria: under the Residential Tenancies Act 1997, a renter who leaves early may be liable for rent until the property is re-let, and for reasonable re-letting costs, and can apply to VCAT if the amount is disputed. Queensland: the Residential Tenancies Authority explains that a tenant who breaks a lease may be liable for rent until a new tenant moves in and for a share of re-letting costs, with the landlord obliged to minimise the loss. Other states follow the compensation approach with their own details. Law checked on 21 October 2026. This page explains how the clause works and is not legal advice.

Leaving without penalty

Some reasons let a tenant end a fixed term without a break fee or compensation. In NSW they include domestic violence, offered social housing, the landlord putting the property up for sale without disclosing it, and needing to move to an aged care facility. Queensland allows a tenant experiencing domestic and family violence to end a tenancy by notice. Victoria allows family violence and other hardship grounds through VCAT. Check the state authority's list before paying a fee that may not be owed.

Worked example

Sam Heller pays $560 a week on a 12 month NSW lease and leaves after 5 months. Just over 41% of the term has expired, which falls in the 25% to 50% band, so the break fee is 3 weeks' rent, $1,680, plus rent up to the date Sam hands back the keys. If the same tenancy were in Queensland, Sam would instead pay rent until a new tenant moved in, perhaps 3 weeks, plus a share of advertising and letting fees for the 7 months remaining.

Commercial leases are different

This clause concerns residential tenancies. Commercial and retail leases usually have no right to leave early at all unless the lease contains a break clause, which is a negotiated option to end on a set date. The separate break clause page covers that commercial option.

Documents that carry this clause

Residential lease agreement template for a New South Wales fixed termA residential tenancy is the one agreement where most of the terms are set by statute rather than by the parties, so the useful part of a template is the additional terms and the numbers. This one is a 12 month New South Wales fixed term at $560 a week, with the bond, the entry notice periods and the break fee written out exactly as the Act sets them.Room rental agreement template for one room in a shared homeRenting a room is not the same as renting a house, and most templates copy a residential lease and hope. This one is written for one room with shared kitchen and bathroom, prices the bills split, lists the rules that matter, and says plainly that the occupant is a boarder or lodger and what that changes.Notice to vacate template for a tenant giving notice on a periodic leaseA renter ending a periodic agreement has to give the right number of days and prove later that the notice arrived. This one dates the notice, counts 33 days against a 28 day requirement, says it travels with the approved form, and settles rent, bond, keys and the final inspection on the same page.

Questions people ask