If a tenant wants to move out before the end of a fixed term lease it is considered 'breaking the lease'. An owner cannot break a lease.
For a tenant to break a lease they must compensate the owner for out of pocket costs due to the tenant moving out earlier than agreed.
- $328 advertising fee
- Continue to pay rent until new tenants move in or until the lease end date
Note: Cubbi does not request a letting fee of 1-2 weeks rent as compensation which is charged by many real estate agents and varies state to state (according to legislation and percentage of lease remaining).
Note: this applies to all states excluding NSW and ACT for fixed term agreements of 3 years or less.
1. When a tenant notifies the owner they wish to vacate before the end of a fixed term lease the owner must start the process by Ending the tenancy in Cubbi.
2. Cubbi creates a break lease agreement for the owners and tenants to sign that stipulates everything in this help article.
3. When everyone has signed the break lease agreement:
- The owner may start advertising the property as per normal from their Cubbi dashboard.
- $328 will be payable by the Tenant(s) via BPay or NPP. The owner may wish to wait until this payment clears before advertising.
- Rent will continue as normal with no end date in Cubbi. Rent payments will change (as agreed in the break lease agreement) to weekly rent payments (if not already) to reduce the chances of the tenant overpaying their rent.
4. The tenant must provide reasonable access for the owner to show potential new tenants through the property within the final 4 weeks before the tenant Vacate Date. Cubbi advises reasonable access to be up to 2 inspections per week no longer than 30 minutes each during the hours of 9 am - 6 pm providing a minimum of 3 days notice. Cubbi recommends the owner and tenant to agree to 2 open for inspections of 15 minutes each per week, one on a weekday evening and one on the weekend.
The owner and tenant may agree for the tenant to conduct the inspections with potential tenants to apply online through Cubbi.
5. The tenant must vacate the property as listed in the break lease agreement and the owner must conduct the final inspection as per normal, however, the bond refund should not be completed until everything outstanding has been paid or agreed between the owner and tenant.
6. When a new tenant is found and the lease is signed, Cubbi will calculate the final rent payment/s. The final rent period will be charged pro-rata based on the daily rent amount. If the tenant has overpaid, the rent will be refunded back to the tenant (this is unusual when rent is changed to weekly payments).
7. Bond refund may also be completed now.
Finding great tenant vs mitigating loss
The owner must mitigate any loss to the tenant in association with breaking the lease. For example,
- If there is more than 30% of the current lease remaining Cubbi recommends the owner to advertise the property at the same rent amount (not increasing the rent).
- The owner must advertise the property through Cubbi on all the major portals ($328) when the agreement is signed or approximately 6 weeks out from of the tenant Vacate Date.
Although the owner must mitigate loss to the tenant, the owner is not forced to accept any tenant who is interested in renting the property. The owner must be confident any new tenant can pay the rent and look after the property while also being suitable for the property and the lease terms.
We'll support you both throughout this period. No stress! Common Ground.