New Residential Tenancy Law Changes – New mandatory set break fees for fixed term agreements

New mandatory set break fees for fixed term agreements 

Mandatory set fees when a tenant breaks a fixed-term agreement early will apply to all new fixed-term agreements that are 3 years or less.

This applies to agreements that are entered into from 23 March 2020 onwards.

The break fees are:

• 4 weeks rent if less than 25% of the lease had expired
• 3 weeks rent if 25% or more but less than 50% of the lease had expired
• 2 weeks rent if 50% or more but less than 75% of the lease had expired
• 1 week’s rent if 75% or more of the lease had expired

Using the example of a 12-month tenancy agreement, a tenant would only be required to provide two weeks’ rent to their landlord (that is, an amount equal to two week’s rent) to end their agreement early, if seven months (or 58%) of the agreement had expired.