If you want to end the tenancy

Generally speaking, there are four ways in which you, as a tenant, can end your tenancy:

  1. Giving a termination notice and moving out;
  2. Getting the landlord’s consent to terminate;
  3. Applying for and getting a termination order from the NSW civil and Administrative Tribunal; or
  4. Breaking the agreement (including by abandoning the premises).

If you are in a periodic agreement, or if you are near the end of a fixed term, ending the agreement should be a straightforward matter of giving a termination notice and moving out. In particular, the most straightforward way will usually be to give a termination notice without grounds. There may be some circumstances, however, where you might prefer to give a termination notice with grounds, or where you might approach the landlord for their consent to the tenancy ending.

If you are in a fixed term agreement, you cannot give a termination notice without grounds and terminate before the end of the fixed term. Depending on your reasons or grounds for wanting to terminate the tenancy, you may be able to do so without incurring a liability to the landlord – or you may have to compensate the landlord for ending the agreement early.

Termination notices by tenants

Table 4.1 below sets out the various types of termination notice you may give under the Residential Tenancies Act 2010 (NSW) (the RT Act 2010). No matter what type of termination notice you are giving, be sure to get the form of notice right (section 223). This means:

You also have to give the notice properly. This means either:

Note that you cannot validly give a termination notice by email or SMS text, or by slipping it under a door.

This is changed.

Previously, leaving a termination notice in a mailbox was not valid service.

A termination notice by itself does not terminate the tenancy: you also have to give the landlord ‘vacant possession’ (that is, move out) by the date in the notice. It is only when you have actually given vacant possession that the tenancy ends (section 81(2)).

Table 4.1. Termination notices by tenants

Grounds

Period (minimum)

Notes

No grounds (s 97)

21 days

Not during fixed term

No grounds – end of fixed term (s 96)

14 days

During last 14 days of the fixed term (or before, with a longer notice period)

Breach (s 98)

14 days

See also alternative method per s 103

Rent increase (s 99)

21 days

During fixed term of more than two years only

Accepting offer of social housing (s 100(1)(a))

14 days

During fixed term only

Requires aged care facility
(s 100(1)(b))

14 days

During fixed term only

Landlord intends to sell premises (s 100(c))

14 days

During fixed term only not available if landlord disclosed proposal to sell before entering agreement

Co-tenant or occupant excluded by AVO (s 100(d))

14 days

During fixed term only

Frustration – premises destroyed or uninhabitable
(s 109)

Immediate

 

No grounds

You can give a notice of termination without grounds during a fixed term agreement, but the date for termination must be at or after the end of the fixed term (section 96(1)). Also, the amount of notice must be not less than 14 days (section 96(2)). (This means, for example, that one month into a six-month fixed term agreement you could give a termination notice without grounds – but the notice period would have to be five months.)

If you are in a periodic agreement, you can give at any time a 21-day termination notice without grounds (section 97).

Breach

If your landlord breaches a term of your agreement – for example, by failing to do repairs, or interfering in your privacy, or renting premises to you that cannot legally be used as a residence – you can give a 14-day termination notice.

Terminating your tenancy this way does not involve applying to the Tribunal, but if you’ve suffered loss as a result of the breach, you might consider applying to the Tribunal for an order that the landlord compensate you for your loss. See the section on ‘Breach by landlord’ in Access and privacy section for more details on compensation.

Be aware that there may be a risk in terminating your tenancy this way, especially if you are in the fixed term of an agreement. Your landlord might dispute that there was in fact a breach – and if there was no breach, there is no ground for termination, making your termination an abandonment of the tenancy.

To dispute your termination notice, your landlord can, within seven days of receiving the notice, apply to the Tribunal for an order revoking it; they will need to show the Tribunal that they have remedied the breach and that it is appropriate, in the circumstances, to continue the tenancy. Alternatively, after you have left the premises, your landlord might make a claim against the bond, or apply to the Tribunal for a compensation order against you, for losses arising from your breach – that is, the alleged abandonment. It will then be for the Tribunal to decide whether your termination notice was valid.

If you have any doubt about the breach you’d be relying on, or just want to play it safe, consider instead applying to the Tribunal under section 103 for a termination order on grounds of breach.

Rent increase

This ground is available only where the tenancy agreement is for a fixed term of more than two years. Under such agreements, rent increases are allowed during the fixed term (section 42(2)). If you would rather not pay the increased rent, section 99 allows you to give a 21-day termination notice.

This is new.

The Residential Tenancies Act 1987 (NSW) (the RT Act 1987) made no special provision for rent increases, or terminations on the ground of a rent increase, during fixed terms of two years or more.

Landlord selling, no disclosure before agreement

If, during the fixed term of your agreement, your landlord notifies you that they intend to sell the premises, and they did not disclose to you before you entered the agreement that they proposed to sell, you can give a 14-day termination notice. This is not a breach termination notice: the landlord is not liable to compensate you for any losses, such as moving costs.

Note that under section 26 of the RT Act 2010, landlords are obliged to disclose before entering into an agreement any proposal to sell the premises (particularly where the landlord has prepared a contract for sale). This ground for termination, however, is also available to tenants who entered into their tenancy agreements before the commencement of the RT Act 2010 – even though their landlords were not under a specific obligation to disclose proposed sales.

This is new.

Like each of the other grounds for termination at section 100, this was not previously a ground for termination. Note that each of these new grounds can be used only during a fixed term: if you are in a periodic agreement and, for example, want to move out to take up an offer of social housing, you would have to give a 21-day termination notice without grounds.

Frustration

The word ‘frustration’ is used here in a narrow legal sense: it means that the tenancy agreement, through no fault of either party, cannot be performed (it does not mean that you are irritated or annoyed at the other party’s conduct). In particular, it means that the agreement cannot be performed because the premises, or part of the premises, have become uninhabitable.

Either party can give a termination notice on the ground of frustration. Where there is a dispute about whether the premises are actually uninhabitable, the Tribunal can determine the matter. Note also that if premises are uninhabitable because your landlord has failed to provide the premises in a state of reasonable repair or do repairs, you should treat it as a matter of breach, not frustration.

What if I give a termination notice, but change my mind and want to stay?

As soon as possible, tell your landlord or agent that you want to withdraw your termination notice. If they consent, the notice is withdrawn and revoked (section 112). If they do not consent, the termination notice remains in effect and may be used by the landlord as the basis for an application to the Tribunal for termination orders (section 105).

Most landlords will consent to withdrawal of a termination notice if you tell them before they make other plans for the property – so don’t delay.

Termination by consent

You can terminate your tenancy agreement by giving up possession of the premises with the consent of the landlord (section 81(4)(e)). This method of termination is particularly useful where you have a compelling reason for ending your tenancy agreement during a fixed term but there is no appropriate ground prescribed by the RT Act 2010: for example, where you need to move in order to care for a sick family member. It may also be useful where you and the landlord are sick of each other and simply want to go your separate ways.

Termination by consent does not involve giving a formal termination notice, or observing any particular notice period – when you give the premises back is up to you and the landlord – and, if you are ending the tenancy during a fixed term, you are not liable to compensate the landlord for loss of rent. It is, however, a very good idea to get the landlord’s consent in writing, along with an express statement that you will not be liable for any loss arising from the termination. Read carefully any ‘consent’ you might receive: it often happens that landlords merely acknowledge that you are ending the agreement and reserve their right to compensation as if you are abandoning the tenancy. If the landlord does not actually consent without reservation to the termination, you should consider terminating the tenancy some other way.

Note that if a landlord consents to termination then changes their mind, you can still go ahead and terminate the tenancy.

Tribunal orders

You can apply to the Tribunal for an order terminating your tenancy agreement for one of two reasons:

In each case you apply directly to the Tribunal, without first giving a termination notice.

Breach

The Tribunal can make a termination order if it is satisfied that:

In particular, the Tribunal may consider the nature of the breach, any previous breaches, the history of the tenancy, any steps you may have taken in relation to the breach, and whether your landlord has taken steps to remedy the breach. If your landlord has remedied the breach, the Tribunal may refuse to make the termination order.

The Tribunal will expect you to prove the breach and show that it justifies terminating the tenancy.

This means of termination is an alternative to giving a 14-day termination notice on the ground of breach and moving out. The advantage of this alternative is that there’s no risk of your giving an invalid termination notice, and hence no risk of the termination being a breach of the agreement for which you have to compensate your landlord. The disadvantages are that the Tribunal’s proceedings may take longer than 14 days, and that you might not get the termination order.

Hardship

The Tribunal can terminate your tenancy if it is satisfied that there are ‘special circumstances’ and you would suffer ‘undue hardship’ if the tenancy continued (section 104).

If it orders termination, the Tribunal can also order that you pay compensation to the landlord. (It is also open to the Tribunal not to order compensation at all.) The amount of compensation is limited to the amount of the relevant ‘break fee’, per section 107. (This limit applies even if your agreement makes no provision for break fees.) In addition, compensation is also subject to the landlord mitigating their losses (section 104(3)).

Note this application is available during the fixed term only. In a periodic agreement, use a 21-day ‘without grounds’ termination notice or, if you want to terminate it more quickly, try to terminate with the landlord’s consent.

Breaking the agreement (including abandonment)

You can end your tenancy by repudiating the agreement (that is, telling the landlord you are leaving and will no longer be bound by the agreement), or abandoning the tenancy (leaving without telling the landlord anything). In either case you are terminating the agreement without either a valid termination notice, or the landlord’s consent, or a termination order from the Tribunal. In other words, you are breaking the agreement.

Because your agreement is a contract, on breaking it you will be liable to compensate your landlord for losses they suffer as a result of your breach. These losses may include the loss of the rent they would have received from you had the tenancy continued – and under a fixed term agreement, this may be up to the end of the fixed term.

Your landlord is, however, obliged to mitigate their loss. This means that they are not entitled to be compensated for any loss that could have been avoided had they taken reasonable steps (section 107(2)). In most cases, these steps will include reletting the premises. If your landlord delays in reletting the premises, or knocks back suitable applicants, or tries to relet the premises at a higher rent, they may be held to have failed to mitigate their loss.

Note that you may also be liable to compensate your landlord for costs associated with mitigating their loss (for example, the cost of advertising and reletting the premises).

If you are going to break your agreement, it is preferable to tell your landlord that you are doing so (repudiating the agreement), rather just leaving without saying anything (abandoning), because your landlord’s obligation to mitigate their loss will kick in sooner. It is also better manners. Once you’ve said you’re breaking the agreement, you should move out and stop paying the rent – because it is at that point that you actually break the agreement and the landlord’s duty to mitigate their loss kicks in. (Sometimes agents will advise you to stay put, or to keep paying rent, until they find another tenant. If you do this, they may have little incentive, and no legal obligation, to actually find someone.)

Break fees

How much you have to pay may also be affected by whether your agreement includes provision for a ‘break fee’. This is a new additional term allowed under the RT Act 2010, so it is still unusual to have one.

For fixed terms of three years or less, the amount of the break fee is:

For fixed terms of more than three years, the amount of the break fee may be set in the agreement by the parties.

This is new.

There was no provision for break fees under the RT Act 1987 – indeed, including an additional term for a break fee would have been contracting out of that Act, and void.

Transferring (assigning) the tenancy

There may be some circumstances in which you would prefer to have someone else take your place under a tenancy agreement rather than terminate the agreement altogether. The RT Act 2010 refers to this as ‘transferring’ your tenancy. (In particular, this is a ‘whole of tenancy’ transfer; the RT Act 2010 also refers to a ‘partial transfer’, under which you remain in occupation along with the new tenant: section 75(2).)

To lawfully transfer the whole of your tenancy, you need your landlord’s written consent (section 74). Your landlord is entitled to refuse consent, whether or not it is reasonable to do so (section 75(1)). If they give consent, your landlord is entitled to charge you for the reasonable expenses of giving consent (section 74(2)). (These expenses might include, for example, the cost of checking the person to whom the tenancy is being transferred against a tenancy database.)

You will also need to document the transfer and have it signed by you, the landlord and the person to whom you’re transferring the tenancy. See the Tenants NSW website for a sample transfer document.

Once you’ve transferred the tenancy, the new tenant has all the rights you enjoyed under the tenancy agreement. However, you may still bear all the liabilities under the agreement: so, for example, if the new tenant fails to pay rent, the landlord may proceed against you for the money. For this reason, make sure your transfer document states that the new tenant indemnifies you against any loss. This means that if the landlord proceeds against you, you can proceed against the new tenant.

Tenants' Rights Manual by Chris Martin in association with the Tenants' Union of NSW. Published by Federation Press 2012. © Tenants' Union of NSW. Material contained herein may be copied for the non-commercial purpose of study or research subject to the provisions of the Copyright Act 1969 (Cth).

The information in this resource is intended as a guide to the law and should not be used as a substitute for legal advice; and applies to people who live in, or are affected by, the law as it applies in New South Wales, Australia.

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