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Breaking a Lease Contract
 
It firstly depends on whom is wanting to break the Lease Contract and therefore requesting an early termination. In the majority of cases it would be the Tenant’s request and possibly due to loss of employment or relocation. If the Tenancy contract includes a provision for a Tenant to request an early termination then as per the written terms this should be followed. If an early termination is dependent on mutual agreement by both parties then an amicable settlement can hopefully be reached. It may not be beneficial for the Landlord to enforce the contract to run its full term if it’s likely that rent may not be paid and property may be left unoccupied for a period of time. While there are many variances of an early termination settlement and there is no specific law that sets a precedent we suggest at least two month notice period and a potential penalty for the contract break (one month rent) however this could be dependent on market conditions. When the market rates are increasing it can financially benefit an owner to terminate the lease and obtain a higher rent from a new tenant. We suggest a written agreement be signed and approved with the conditions of Terminating the Lease to document and support the amended Lease expiry date & the terms.

There are laws that prevent an owner from breaking the Tenancy contract and vacating a tenant and therefore there would have to be approval from the Tenant should the Landlord be requesting. You can see our post “Vacation Notice” that advises when Landlords can ask a Tenant to vacate.
1st September 2014

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