Breaking a NSW lease longer than 3 years: why the fixed break fee doesn't apply and what NCAT will award instead
If you signed a fixed-term residential lease longer than three years, the standard break-fee table in your agreement does not apply. The fixed break fee — 4 weeks, 3 weeks, 2 weeks or 1 week of rent depending on how far through the term you are — is in clause 51 of the standard residential tenancy agreement and applies only to leases of three years or less. For longer leases, the law switches to a compensation calculation under section 107 of the Residential Tenancies Act 2010 (NSW) ("RTA") — and that calculation involves the landlord's duty to mitigate.
This page covers how the longer-lease compensation regime works at NCAT, the four no-penalty grounds that apply regardless of lease length, the mitigation arguments that consistently reduce awards, and a template for the submission you'll make at hearing.
Information, not legal advice. Figures current as at 1 July 2025.
What this dispute is
The break-lease regime in NSW has two settings, divided by the three-year line. For fixed-term agreements of three years or less, clause 51 of the standard residential tenancy agreement sets a mandatory break fee: 4 weeks' rent if less than 25% of the agreement has expired; 3 weeks' rent if 25% or more but less than 50%; 2 weeks' rent if 50% or more but less than 75%; and 1 week's rent if 75% or more has expired. The figure is fixed — mitigation arguments don't reduce it, and the landlord can claim the break fee even if a new tenant moves in the next day.
For fixed-term agreements longer than three years, clause 51 does not apply. Instead, if the tenant ends early and the landlord and tenant can't agree on compensation, the landlord can claim from the bond or apply to NCAT for a compensation order under section 107 RTA. The Tribunal looks at the landlord's actual loss caused by the early termination — typically the rent for the period the property sat empty, plus reasonable re-letting costs (advertising, agent re-letting fee). And s107(2) imposes a duty on the landlord to take all reasonable steps to mitigate that loss.
Mitigation is where most longer-lease cases are won. The landlord must advertise promptly, at the original rent (or a realistic market rent), through ordinary channels, and accept reasonable applicants. A landlord who sits on the property, raises the asking rent, refuses applicants without good reason, or insists on a luxury renovation before re-letting is not mitigating — and the rent for that idle period is not recoverable from the tenant.
Separate from the three-year line, four no-penalty grounds apply to any length of lease: (1) ending under section 105B because the tenant or a co-tenant is in circumstances of domestic violence; (2) ending under section 104 on hardship grounds following an NCAT order; (3) a limited "severe hardship" pathway during a fixed term; and (4) ending in response to a landlord's breach. The mechanics and evidence for each differ — see the process steps below.
Time limits that bite
These deadlines are strict. The Tribunal can extend in some cases, but extensions are not automatic — they're weighed on length, reason, prospects and prejudice.
- 21 daysNotice of termination by tenant in response to a landlord's breach (RTA s99) — verify the current notice periodRTA s99
- ImmediateTermination under section 105B by giving a domestic violence termination notice — no minimum notice, no break feeRTA s105B
- No fixed windowApplication to NCAT under s104 on hardship grounds — bring it before you vacate where possibleRTA s104
- 14 daysTenant's notice if the landlord is selling and didn't disclose during the tenancy (RTA s100)RTA s100
- Up to 12 monthsPractical window for the landlord to bring an NCAT compensation claim — get evidence in earlyNCAT practice
The process, step by step
- 1
Step 1 — confirm which regime applies to your lease
Pull out the tenancy agreement and find the fixed-term end date. Calculate the term: end date minus start date. If the term is three years or less, clause 51 break-fee applies and the conversation is short — pay the schedule amount, hand over the keys, done. If the term is more than three years, clause 51 does not apply; this page is for you.
Note: it's the original term that matters, not how much is left. A five-year lease with one year remaining is still a long lease — clause 51 does not apply.
- 2
Step 2 — check the four no-penalty grounds first
Before talking compensation, check whether you can terminate without paying anything at all. The four no-penalty pathways apply regardless of lease length.
(1) Domestic violence — RTA s105B. A tenant or co-tenant in circumstances of domestic violence can serve a Domestic Violence Termination Notice with the required supporting evidence (e.g. a domestic violence order, a competent person's declaration). No minimum notice. No break fee. The tenant cannot be listed on a tenancy database for the early termination.
(2) Hardship — RTA s104. Apply to NCAT for a termination order on hardship grounds. If the Tribunal is satisfied undue hardship would result from continuing the agreement, it may terminate. The Tribunal has discretion to order compensation — but in genuine hardship cases that is often nil or minimal.
(3) Severe hardship inside a fixed term. For tenancies of fixed term, there is a hardship pathway that allows termination on serving the prescribed notice with evidence — the bar is high (severe hardship), and the precise procedure should be cross-checked against the current RTA and Regulation before you rely on it.
(4) Landlord breach — RTA s99 (and others). Where the landlord has breached the agreement in a way that goes to the heart of the tenancy (uninhabitable premises, persistent failure to repair, harassment), the tenant can give a termination notice on breach grounds — usually 14 days. The landlord cannot then claim a break fee. The basis is the landlord's breach, not the tenant's choice to end early.
- 3
Step 3 — if no no-penalty ground applies: do the section 107 maths
Section 107 says the landlord is entitled to compensation for loss caused by the early termination, less anything the landlord could have avoided by reasonable mitigation. The typical components:
- Rent for the vacant period — from the day you vacated to the day a new tenant could reasonably have started, capped at the original lease end date.
- Re-letting fee — usually one to two weeks' rent, pro-rated for the unexpired portion of your lease.
- Advertising costs — actual amounts paid (realestate.com.au listing fees, signboard).
- Reasonable cleaning or repair — only where attributable to your early termination, not ordinary wear and tear.
Your job is to test each component. Was the property re-listed within a week? Was it priced at market? Were applicants accepted promptly? Cap each component at what mitigation would have achieved.
- 4
Step 4 — gather mitigation evidence (this is the case)
The landlord has the duty under s107(2), but you have to make the duty real with evidence. Useful evidence:
- Screenshots of the property's listing on realestate.com.au and domain.com.au, with the listing date visible. Show that it was listed promptly, or wasn't.
- The asking rent on the listing. If the landlord raised the asking rent above the rent you were paying, that's a mitigation problem — they should re-let at the same rent first.
- Comparable listings in the same suburb that let quickly at the same price — evidence that the property could have been re-let in a similar timeframe.
- Any communications from prospective tenants you introduced who were turned away.
- The new tenancy agreement (the landlord must produce it on request in proceedings) — establishes the re-letting date and the new rent.
- 5
Step 5 — try to settle, then defend the NCAT claim
Most longer-lease break disputes settle. Write to the landlord with your calculation: "I terminated on [date]. The property was re-listed on [date] at [rent]. A reasonable re-letting period was [X weeks]. I accept liability for [$Y rent for that period] plus [$Z reasonable re-letting fee], totalling $A. I do not accept liability for [the additional sum claimed] because the landlord failed to mitigate by [specific reason]."
If the landlord proceeds to NCAT (or has already lodged), file a response and a counter-claim if the bond covers more than the proper liability. At hearing, use the mitigation evidence to walk the Member through each component of the claim and show what the landlord could and should have recovered by reasonable steps.
If the matter is brought under Consumer and Commercial, the standard filing fee applies — $62 / $16 concession on the 1 July 2025 schedule. See ncat-fees-2026 for current figures.
- 6
Step 6 — what about the bond?
The bond is held by Rental Bonds. The landlord can claim from the bond at the end of the tenancy. Don't sit back and let the landlord's claim form go through unchallenged — the agent's first move will be to claim the entire bond against the "break-lease loss". Lodge your own claim through Rental Bonds Online first (see our lodge-bond-refund-yourself-nsw guide) — that flips the burden onto the agent to make a case.
Evidence that actually works
Cases are lost on missing documents more than on weak arguments. Get these in order before you file.
The tenancy agreement and any variations
Establishes the lease term and confirms whether clause 51 (≤3 years) or the s107 compensation regime applies.
Termination notice you gave (and the date of vacating)
Anchors the start of the vacant period the landlord can claim for.
Listing screenshots — date, rent, source
Print to PDF: realestate.com.au, domain.com.au, agent's own website. Date-stamp and source URL.
Comparable-rent evidence
Listings of similar properties in the same suburb that let quickly — establishes the reasonable mitigation period.
Communications with prospective tenants
Any replacement tenants you introduced and the agent's response. Refusals without good reason undermine mitigation.
The new tenancy agreement
The landlord must disclose it on request in proceedings. Establishes the actual re-letting date and the new rent.
For domestic violence — supporting evidence under s105B
Domestic violence order, declaration by a competent person (medical practitioner, police officer, social worker, refuge worker) using the prescribed form.
For hardship — financial and personal evidence
Payslips, Centrelink statements, medical letters, separation documents — whatever shows the undue hardship.
For landlord breach — repair history, photos, communications
Establishes the breach that justifies termination under s99 without a break fee.
Common reasons people lose
Treating the ≤3-year break fee schedule as applying
It doesn't. For longer leases, paying the 'fee' the agent quotes you may overpay. Insist on a s107 calculation with mitigation.
Not capturing the listing evidence early
Once the property is re-let, the old listing comes down. Screenshot the listing as soon as you give notice, and at intervals after.
Walking past the no-penalty grounds
Many tenants pay break fees they didn't owe because they didn't realise s104, s105B or a landlord-breach termination applied to them.
Letting the bond go without lodging your own claim
If you let the agent claim the bond first, you start on the back foot. Lodge first via Rental Bonds Online.
Speculating about the landlord's motives
Mitigation is a factual question — was the property listed promptly at market? — not a question of bad faith. Stick to dates and evidence.
Bringing a domestic violence termination without the supporting evidence
Section 105B requires the prescribed supporting evidence (order, declaration). Without it, the termination notice may be defective.
Orders NCAT can make
This is the kind of order you can ask for — not a guarantee you'll get it. Frame your application around the order you actually want.
Compensation under RTA s107 (set by NCAT)
An order requiring the tenant to pay compensation for actual loss caused by early termination, after credit for mitigation.
Order reducing the landlord's bond claim
Where the bond claim exceeds the proper s107 liability, an order that the bond be partly or wholly refunded to the tenant.
Hardship termination under s104
An order terminating the agreement on hardship grounds, sometimes with no compensation or with reduced compensation.
Declaration that termination under s105B was valid
Where contested, a declaration that the domestic violence termination was valid — confirms no break fee is payable.
Compensation for landlord breach (counter-claim)
Where the early termination was caused by the landlord's breach, the tenant can counter-claim for damages — moving costs, double-rent overlap, rent differential.
Free help
- NSW Fair Trading — breaking a fixed-term tenancy
Government guidance on the break-fee schedule and the s107 regime.
- Tenants' Union NSW — how do I end my tenancy?
Tenant-focused explainer covering both regimes and the no-penalty grounds.
- Tenants' Union NSW — domestic violence
Section 105B and the prescribed supporting evidence.
- Tenants' Advice & Advocacy Services (TAAS)
Free local tenant advice.
- Residential Tenancies Act 2010 (NSW) — s107
The legislation itself.
- LawAccess NSW — 1300 888 529
Free legal info line, Mon-Fri 9am-5pm.
Questions self-reps ask
How do I know if my lease is more than 3 years?
Subtract the start date from the end date on your tenancy agreement. Anything over three years (1 January 2024 to 1 February 2027, for example) is a long lease and clause 51 does not apply — NCAT will determine compensation under s107 if the landlord and tenant can't agree.
It's the original term that counts, not the remaining portion. A five-year lease with one year left is still a long lease.
What does the landlord have to do to mitigate?
Re-advertise promptly through ordinary channels at a realistic market rent (usually the rent you were paying), accept reasonable applicants, and re-let as soon as practicable.
A landlord who sits on the property, asks for a higher rent than you were paying, refuses reasonable applicants, or imposes a luxury renovation before re-letting is failing the mitigation duty under s107(2). The rent for the period the landlord could have avoided is not recoverable.
I'm leaving because of domestic violence. Do I owe a break fee?
No. Section 105B of the RTA allows immediate termination by serving a Domestic Violence Termination Notice with the prescribed supporting evidence (a domestic violence order, or a declaration by a competent person on the prescribed form).
No minimum notice. No break fee. You cannot be listed on a tenancy database for the early termination.
Can I just walk out and let the landlord sue me?
You can, but the landlord will likely claim against your bond and apply to NCAT for any shortfall. Walking out without a strategy hands the landlord the easier case.
Better: document the property condition on the way out, send written notice with a stated ground (no-penalty if any applies; otherwise simply early termination with a request for s107 calculation), and lodge your own bond-refund claim first via Rental Bonds Online.
What if I have a replacement tenant lined up?
Offer them to the landlord in writing. A landlord who refuses a reasonable replacement tenant without good reason fails the mitigation duty for any rent claimed beyond the date the replacement could have moved in.
Keep the email trail — it's powerful evidence at hearing. The landlord can refuse on legitimate grounds (credit history, references) but not because they prefer to sit and bill you.
Can NCAT order me to pay more than what's in the bond?
Yes, if the landlord proves the loss after mitigation exceeds the bond. The bond is just a security; the landlord's actual claim under s107 can be larger or smaller.
That's why mitigation evidence matters — the cap on what you owe is the loss the landlord could not have avoided by reasonable steps, not the bond figure.
What if the landlord is the one in breach?
Section 99 RTA lets you give a termination notice when the landlord breaches the agreement. The breach has to be material — uninhabitable premises, persistent failure to repair, harassment.
If you terminate validly under s99, no break fee is owing — the termination is the landlord's fault, not your choice. You may also have a compensation counter-claim for losses caused by the breach.
Related guides
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NCAT Tracker is not a law firm. This page is information, not legal advice. Figures, fees and statutory periods cited here are current as at 1 July 2025 and are CPI-indexed or amended from time to time — verify on ncat.nsw.gov.au and legislation.nsw.gov.au before you lodge.