Breaking a Residential Lease (NT)
Residential leases in the Northern Territory are regulated by the Residential Tenancies Act 1999. This Act stipulates when a residential lease may be brought to an end and the termination process. When a party breaks a residential lease in breach of this legislation, they may have to compensate the other party for damages. This article explains how to legally break a residential lease in the Northern Territory.
Terminating a residential lease
A fixed-term lease commonly lasts for either six months or a year. A landlord or tenant can terminate a tenancy at the end of the lease without grounds (that is, without providing a valid reason) by providing two weeks’ written notice before the end of the tenancy agreement term. Otherwise, a residential lease can be broken when:
• The tenant or landlord terminates the tenancy in accordance with the rules set out in the Act;
• The Northern Territory Civil and Administrative Tribunal (NTCAT) terminates the tenancy;
• The premises were abandoned with rent outstanding;
• A sole tenant dies without notifying their landlord that their spouse, partner or dependent was also an occupant of the premises;
• A tenant gives up possession with the landlord’s consent; or
• In other circumstances outlined in the Residential Tenancies Act or the Housing Act 1982.
Breaking a residential lease in the Northern Territory
A fixed-term agreement provides security for a tenant, but the binding nature of the agreement can be difficult if a tenant’s circumstances change. Breaking a residential lease without grounds is a breach of a legal contract, and the injured party is entitled to compensation. A tenant who wants to break a fixed-term tenancy lease is responsible for paying the landlord’s losses for the remaining term of the lease or until the property is relet to another tenant. The tenant may also incur real estate agent fees when breaking a residential lease in the Northern Territory.
Breaking a residential lease without penalty
If a tenant needs to leave a property early, they should talk to their property agent or landlord to see if they will agree to terminate the lease early without penalty. This may actually suit the landlord if they want to sell the property without a sitting tenant or intend to make renovations to the property. This is the best-case scenario, as everyone is happy.
It is more likely that a mutual agreement can be reached if the tenant provides enough notice for the landlord to make their own arrangements. The tenant will need the landlord’s consent and the consent of any other person on the tenancy agreement. This agreement must be in writing, either in a formal document or through email or text messages.
Even if it is not possible to reach a mutual agreement, the agent is obligated to try and find a new tenant for the property before the tenant’s proposed departure date. If the agent is unsuccessful, the tenant themselves can advertise for someone to take over the property and sign a new lease. This is preferable to the tenant remaining responsible for lost rent. The landlord is legally entitled to approve a new tenant, but they must take “all reasonable actions” to relet the property.
If another tenant cannot be found before the tenant’s departure, the landlord can hold onto a security deposit to cover rental losses and other costs associated with reletting the property. Once the property is relet, the landlord needs to apply within three months to NTCAT for compensation to cover their loss and costs. If the total loss exceeds the security deposit, the landlord can seek further compensation.
On the other hand, breaking a residential lease does not necessarily mean that the tenant loses their bond. If another tenant is able to take up the lease immediately, then the normal bond procedures apply. That is, the bond will be returned to the tenant if the property is left in the same condition as described in the entry report, save for fair wear and tear.
Breaking a residential lease: hardship
Sometimes, when a tenant is no longer able to stay in a property for financial or health reasons, they can apply for a hardship exception. Before giving up vacant possession of the premises, a tenant can apply to NTCAT to terminate a residential lease under hardship provisions if:
• continuing the tenancy would cause the tenant undue hardship; and
• the circumstances of hardship did not exist when the tenant signed the lease.
It is vital to note that even if NTCAT agrees that the tenant is experiencing excessive hardship, it may still order that compensation be paid to the landlord.
Covid-19 Pandemic Modifications
The modifications made to the Residential Tenancies Act during the COVID-19 pandemic ceased in June 2022, but leases signed before this time continue to benefit from the provisions until they are terminated.
Go To Court Lawyers can answer any questions you have about breaking a residential lease in the Northern Territory or any other tenancy matter. Please contact our civil law team on 1300 636 846 for legal advice or representation.