Terminating A Tenancy
There are a number of ways in which an agreement can be terminated. However, if you wish to terminate an agreement early there may be fees that you will have to pay until your lease expires. It is very important you understand the implications for an early termination. If you are unsure it is recommended to obtain legal advice.
In a periodic tenancy (after the fixed term of the tenancy has ended, or where there is no fixed term) there is additional scope for the landlord to terminate the tenancy. The landlord may terminate a periodic tenancy where there are grounds set out in cl 96, or by issuing a ‘no cause’ notice to vacate: cl 94.
Clause 96 STT – Termination with cause
Cl96 sets out the grounds for termination and the period of notice the landlord must give, as follows:
- That the landlord or their immediate relative, or a person who has a close personal relationship, and a reasonable expectation that the landlord would provide them with accommodation, genuinely intends to live in the premises (cl 96(1)(a),(b) and (c)) [4 weeks notice];
- That the landlord has a genuine intention to sell the premises (cl 96(1)(d)) [8 weeks notice]; or
- That the landlord has a genuine intention to reconstruct, renovate or make major repairs that cannot reasonably be carried out with the tenant living in the premises (cl 96(1) (e)) [12 weeks notice].
A notice under cl 96 can only be issued when the tenancy is periodic. This means such a notice cannot be given to a tenant who is in a fixed term tenancy. However, such a notice can be served once the fixed term expires and the tenancy becomes periodic.
Clause 94 STT – Termination without cause
A landlord is able to terminate a tenancy without providing a cause. However, this may only occur where:
(a) 26 weeks notice is given; and (c) the notice does not require the tenant to vacate during a fixed term. A notice under cl 94 can be issued at any time (even
during a fixed term tenancy), as long as the date for vacation is after the fixed term has expired. Where cl94 or cl96 are used, the tenant may vacate at any time during the 2 weeks prior to the date for vacation on the landlord’s notice, as long as the tenant gives 4 days notice to the landlord (cl 95, cl 97).
Also, under cl88 the tenant can give their own 3 weeks written notice of intention to vacate at any time during a periodic tenancy.
At the end of the fixed term
If a tenant wishes to end the tenancy at or after the end of the fixed term, they are able to do so by giving 3 weeks notice in writing (cl 89).
NOTE: a landlord cannot terminate the tenancy in this way – they must have grounds (see Factsheet: Eviction in the ACT).
During the fixed term
The tenant can terminate the tenancy agreement during the fixed term with or without grounds.
TERMINATING A FIXED TERM TENANCY WITH GROUNDS
If the tenant has a reason — and it is one of the grounds for termination under the RTA — they can make an application to ACAT to have the tenancy agreement terminated.
Grounds for Termination
The RTA provides several grounds upon which a tenant can terminate a tenancy agreement. A tenant may terminate his/her tenancy agreement in any of the following situations:
- There has been a serious breach of the tenancy agreement by the landlord (s 43);
- The premises have become uninhabitable (cl 86: see previous page);
- The tenant would suffer significant hardship if the agreement were to continue (s 44);
- The landlord has caused or threatened serious damage or injury to the tenant, a member of the tenant’s family, or the tenant’s property (s 45);
- The tenancy agreement was induced by a false or misleading statement by the landlord or their agent (s 46); or
- The tenant is being posted away from Canberra and there is an additional clause in the lease providing this ground (s 8).
If you need to terminate during a fixed term tenancy on any of the above grounds you must apply to the ACAT for an order to terminate your lease. You cannot just terminate the agreement, because you still have contractual obligations to the landlord until the ACAT orders otherwise. Unless you and the landlord/agent can reach a mutual agreement, you will need a termination order from the ACAT. If you reach an agreement, be sure to get it in writing, signed and dated.
Terminating the tenancy agreement before the end of the fixed term without any of the grounds listed above will be a breach of the lease agreement. There are no penalties for this but the landlord may be entitled to limited compensation.
If you know you need to end the tenancy early, you should start by giving written notice to the landlord or agent of your intention to vacate on a specified date.
Once you have served this notice, providing you vacate and return the keys on or by the date you propose, your tenancy terminates on this date (cl 84). This brings to an end your ongoing liability to pay rent and care for the premises, however you may still be liable for compensation, as follows.
When a landlord or agent wants to terminate a tenancy and have the tenant vacate the property for a breach of the tenancy agreement they must have valid grounds and they must follow the processes set out in the STT.
Failure to pay rent—clause 92
If rent goes unpaid for 7 days (this includes only paying part of the rent), on the 8th day the landlord may serve a Notice to Remedy (NTR). This must say if the outstanding rent is paid within the next 7 days, no further action will be taken and the tenancy will continue.
If the rent is not paid within that 7 days, a Notice to Vacate (NTV) may be served, giving the tenant 14 days to move out. At this time the landlord can also make an application for a TPO to ACAT.
However the ACAT hearing cannot take place until the date for vacation specified in the NTV has passed. Where 2 previous notices to remedy have been served for rent arrears during a tenancy, and there is a failure to pay rent the landlord may serve a notice to vacate one week after the day on which the rent is due without first serving the notice toremedy.
Other breaches—clause 93
For other breaches that are serious enough to justify terminating the tenancy the landlord must give a notice to the tenant to remedy the breach within 14 days, if it is capable of remedy.
If the breach is not remedied within that time, or is incapable of being remedied, a notice to vacate within 14 days can be served. If the tenant does not vacate within the 14 days, the landlord will need to make an application to the ACAT for a TPO in order to remove the tenant.
If the tenant breaches the standard terms on three occasions on any grounds, on the third occasion a notice to vacate may be served immediately — a notice to remedy is not required.
A tenant has a right to claim compensation for any breach of the tenancy agreement by the landlord. In certain circumstances the tenant may also elect to terminate the tenancy if the breach is serious enough. The breach must be fundamental to the tenancy agreement. The Standard Terms (cl 90) provide two options for termination if the landlord has breached the tenancy agreement.
- ACAT Order Terminating the Tenancy The tenant may make an application on the grounds listed above. If ACAT agrees that the breach justifies termination, it may order that the tenancy terminate within a specific notice period (detailed in each Section). This period may be waived if ACAT is convinced the tenant would suffer significant hardship unless the agreement terminated immediately, and that the hardship would exceed that of the landlord.
- Tenant’s Notice of Intention to Vacate The Standard Terms set out procedures (cl 91):
a) The tenant must give written notice that the landlord/agent has 14 days to remedy the breach if it is capable of remedy (sign, date, and keep a copy of this notice).
b) If the landlord remedies the breach within that 14 day period, the tenancy will continue.
c) If the landlord does not remedy the breach within the time specified, or if the breach is not capable of remedy, the tenant can give 14 days notice of intention to vacate (sign, date and keep a copy).
d) The tenancy agreement then terminates on the date specified by the tenant.
e) Rent is payable to the date in the notice or the date the tenant vacates, whichever is later.
f) If the landlord remedies the breach during the notice period, the tenant may withdraw the notice or terminate the tenancy on the date specified in the notice by vacating the premises on that date.
Once the landlord has received the Notice of Intention to Vacate, cl 84 gives them two options:
- a) Accept the notice and accept that the tenancy shall end on the date nominated in the notice; or
b) Apply to ACAT for confirmation of the tenancy agreement, an order for compensation, or both. A notice of intention to vacate may not protect the tenant from liability if ACAT decides the breach did not justify termination, or that the breach did not occur.