Breaking a lease in Victoria involves specific processes and potential costs, and is a common consideration for homeowners preparing to sell their property currently in Melbourne.
As of December 2025, if you need to sell a property with a tenant, you’ll need to understand the tenant’s rights and your obligations. Generally, a fixed-term lease cannot be broken without penalty unless specific clauses are included in the lease agreement, or you reach a mutual agreement with the tenant. Penalties can include paying the tenant for costs associated with relocating, or covering rent until a new tenant is found. In 2026, we’re seeing a trend of landlords negotiating with tenants, offering incentives like assistance with moving costs, to facilitate a smooth handover before listing. It’s important to note that providing 60 days’ notice of intent to sell is standard practice, allowing the tenant time to find alternative accommodation. The Residential Tenancies Act 1997 governs these situations, and it’s advisable to familiarise yourself with the current regulations. Fletchers’ experience across the Eastern Suburbs – from Balwyn to Ringwood – shows that a proactive and communicative approach with tenants often leads to the most favourable outcomes, minimising disruption and potential legal complications. Preparing for this possibility is part of our comprehensive property appraisal process.
Understanding your lease agreement and Victorian tenancy laws is crucial when planning a property sale with a tenant in place.