NSW Termination by Tenant
The Tenant can terminate the tenancy agreement under certain circumstances, including serious breaches by the landlord, or the expiry of the fixed term.
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 tenant can terminate the tenancy agreement in a number of circumstances. The landlord should use the Tenant’s Termination Notice to notify the landlord of the termination. Before the tenant goes ahead with terminating the agreement, they should be careful to do so according to law, otherwise the termination may not be valid.
When a landlord receives a termination notice from the tenant, they may have a number of options depending on the reason for termination and the type of tenancy. Check out our [Resolving Disputes] page for more information if the landlord believes that they may be entitled to compensation and/or if the termination is invalid.
There are a limited number of reasons why the tenant can terminate the tenancy:
1. Terminating a Fixed Term Tenancy
Terminating after end of Fixed Term
The tenant can give the landlord a termination notice at any time. The notice must specify a termination date after the end of the fixed term, and that is at least 14 days after the notice is given.
The tenant is not liable to compensate the landlord for terminating a tenancy agreement after the end of the fixed term.
Terminating before end of Fixed Term
The tenant will generally have to compensate the landlord if they terminate the agreement before the end of the fixed term. See below for more information about compensation for landlords.
There are 4 circumstances where the tenant can terminate the agreement before the end of the fixed term without having to compensate the landlord. The termination date must be at least 14 days after the notice is given to the landlord by the tenant.
The 4 circumstances are:
- Social Housing - tenant has accepted social housing accommodation
- Aged Care - tenant has accepted aged care accommodation or needs aged care
- Premises to be Sold - the landlord has notified the tenant that they intend to sell the rented premises. This does not apply, however, if the landlord told the tenant that they intended to sell before they entered the tenancy agreement
- Apprehended Violence Order - a current or former co-tenant or occupant is prohibited from entering the premises because of an apprehended violence order
Rent Increases and 2+ year leases
The tenant can terminate the tenancy before the end of a fixed term because of a rent increase without having to compensate the landlord if 2 conditions are met. The termination date must be at least 21 days after the notice is given.
The 2 conditions are:
- 2+ year fixed term - the agreement must be for a fixed term of 2 years or longer.
- Notice given before increase - the tenant must give the termination notice to the landlord before the rent increase takes effect.
2. Terminating a Periodic Agreement
In a periodic tenancy agreement, the tenant can give a termination notice at any time. The notice must specify a termination date at least 21 days after the notice is given to the landlord by the tenant.
Generally, the tenant is not liable to compensate the landlord for terminating a periodic agreement.
3. Landlord Breaches the Agreement
The tenant has 2 options if they wants to terminate the tenancy because the landlord has breached the agreement. The first option allows the tenant to terminate for any breach, no matter how serious it is. The second option only allows the tenant to terminate for serious breaches. Although using the first option gives greater flexibility, the tenant risks abandoning the premises if they vacate the premises. See below for more details.
The 2 options are:
1. Give Landlord a Termination Notice
The tenant can give the landlord a termination notice. The notice must specify a termination date at least 14 days after the notice is given. If the agreement is for a fixed term, the notice can be given before the end of the fixed term.
Once the tenant has given the termination notice, they should vacate the premises before the termination date. If the landlord does not consent to the tenant terminating the tenancy, they can apply to the Tribunal within 7 days of receiving the termination notice. The Tribunal will revoke the tenant’s termination notice if the landlord can prove that they have fixed their breach of the agreement. For example, if the landlord breached the agreement by not maintaining the premises, they would have to fix the premises and apply to the tribunal within 7 days of receiving the termination notice from the tenant. This would mean that the tenancy is not terminated and continues, unless the tenant has vacated the premises.
Tenants should make sure that the landlord has actually breached the agreement before giving a termination notice. If the landlord challenges the termination and the Tribunal finds that the landlord has not breached the agreement (or the termination notice is invalid), the premises will be considered abandoned if the tenant has already vacated. In this situation, the tenant may be liable compensate the landlord. See below for more information about when the tenant abandons the premises.
2. Apply to Tribunal for Termination Order
The tenant can also apply directly to the Tribunal for a termination order, without giving a termination order to the landlord. The Tribunal will make a termination order if 2 things are proven by the tenant:
- Breach by Landlord - that the landlord has breached the terms of the tenancy agreement
- Breach justifies termination - that under the circumstances the breach by the landlord is sufficiently serious to justify termination
Tenants should not vacate the premises unless the Tribunal makes a termination order, otherwise they will have abandoned the premises will likely be liable to compensate the landlord.
When is a breach sufficient to justify termination by the Tribunal?
Not every breach of a tenancy agreement by the landlord means that the tenant is justified in terminating the tenancy. The Tribunal will only make a termination order if the breach is sufficiently serious to justify termination in the circumstances of the case.
As the circumstances of each case are different, there is a long list of factors that the Tribunal will consider to determine if the breach is sufficient to justify termination. As a general rule, if the breach is very severe and if it causes some kind of harm or loss to the tenant, then it will be considered sufficient for termination. Alternatively, if the breach is relatively minor and/or termination would very harsh on the landlord, then the Tribunal is less likely to order termination.
If you are a landlord or tenant in this situation, you should seek legal advice on your specific circumstances. See our Resolving Disputes page for more information.
4. Hardship to Tenant
The tenant can apply at any time to the Tribunal for a termination order if they would suffer ‘undue hardship’ because of special circumstances if the tenancy is not terminated. ’Undue hardship’ means that the tenant will suffer some kind of injustice if the tenancy continues. ’Special circumstances’ involves an exceptional situation that creates injustice for the tenant if the tenancy continues. There is no set circumstances, however an example would be if the tenant became injured and could no longer access the premises.
The tenant is allowed to apply for a termination order for undue hardship without giving the landlord a termination notice first. However in most circumstances, unless it is an urgent situation, it is good practice for the tenant to notify the landlord with a termination notice. If the tenant does not give a termination notice, the landlord will still be notified by the Tribunal.
If the Tribunal makes a termination order, the tenant may also be ordered to pay compensation to the landlord for any losses suffered because of the termination. The landlord must make a reasonable effort to limit any costs associated with this. If they do not make a reasonable effort, the Tribunal will only order the tenant to partly compensate the landlord.
Application by Landlord after Termination by Tenant
If the tenant gives a termination notice but has not vacated the premises by the termination date, the landlord can apply to the Tribunal for a possession order forcing the tenant to leave the premises.
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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.