This guide covers landlords (or head-tenants) and tenants (or sub-tenants) in a Residential Tenancy. This applies to the majority of share accommodation and residential property rental situations. To confirm it covers your situation visit What is my share accommodation situation?
The landlord may be entitled to compensation in a number of circumstances where the tenancy is terminated. Generally, tenants will only have to compensate the landlord if they have breached the agreement or have unlawfully terminated the tenancy. Read the various scenarios below to see which one may apply to your situation
If the tenant lawfully terminates the agreement (e.g. because the landlord has breached the agreement) then the landlord is only entitled to rent up until the termination date. The landlord is not entitled to any other compensation for lost rent.
If the tenant unlawfully terminates the agreement by abandoning the premises (i.e. they leave the premises and stop paying rent), then the landlord will generally be entitled to compensation. The amount of compensation depends on whether or not the landlord and tenant agreed to a break fee in the residential tenancy agreement (clauses 41 and 42). To increase certainty for both the landlord and tenant, it is recommended that they agree to a break fee before entering the tenancy agreement.
If a Break Fee is included in the tenancy agreement, then the tenant cannot be required to pay any more than the fee for lost rent.
If the landlord terminates the tenancy because the tenant has breached the agreement, the amount of compensation that the landlord is entitled to depends on how serious the breach by the tenant is:
Whether a breach of minor or significant depends on the circumstances of each tenancy. If you in this situation, you should seek legal advice about your specific circumstances.
If the landlord terminates the agreement in a way not allowed by law, they will not be entitled to any compensation for lost rent. The only amount they will be entitled to is the rent until the termination date. If however the tenant moves out before the termination date, they will not be required to pay rent for the period between moving out and the termination date.
If the tenant terminates the agreement correctly (i.e. uses the correct form and gives at least 21 days notice), then the landlord will not be entitled to any compensation. The only amount the landlord can receive is the rent up until the termination date.
If the tenant terminates the agreement incorrectly (e.g. gives less than 21 days notice), then the landlord will be entitled to compensation. The amount of compensation is the equivalent of 3 weeks rent from the day when the landlord is notified that the tenant has vacated the premises. The tenant must also pay rent up until the termination date.
If the landlord terminates the agreement, they are generally not entitled to compensation for lost rent. The only amount the landlord can receive is the rent up until the termination date. If however the tenant moves out before the termination date, they will not be required to pay rent for the period between moving out and the termination date.
If the tenant unlawfully terminates the agreement before the end of the fixed term, or the landlord terminated because of a significant breach by the tenant, then the tenant may be liable to pay a reletting fee. A reletting fee is not compulsory, and the Tribunal will only order the tenant to pay one if the circumstances require it.
If the landlord unlawfully terminates the agreement before the end of a fixed term, the tenant may be entitled to compensation for part of the costs of moving out the rented premises and into other accommodation. These costs might include removalists, utility connections and the bond. The amount of compensation will usually be greater if termination occurred earlier in the fixed term.
These legal guides provide a brief summary and introduction of the laws and regulations affecting share accommodation. They do not cover all cases in all legal jurisdictions and might not apply in your specific share accommodation situation. It is important that you use this information as a guide only and seek independent Legal Advice or consult the Relevant Acts. We do not accept any liability that may arise from the use of this information.