Breaking a lease in Victoria involves specific circumstances where a tenant isn’t held liable for the remaining rent. It’s important to understand the process and your rights as a landlord if your property is currently tenanted and you’re preparing for sale.
As of December 2025, valid reasons generally fall into categories outlined by Consumer Affairs Victoria. These include the property being unsafe or uninhabitable, the landlord breaching the lease agreement, or domestic violence orders. Importantly, a tenant selling a property doesn’t automatically allow a lease break. If a prospective buyer wishes to occupy the property, the tenant must agree, or the lease continues. Currently in Melbourne, we’re seeing a relatively stable rental market, meaning landlords need to be particularly mindful of tenant rights. When preparing a property for sale in 2026, Fletchers agents advise clients to factor in potential lease break costs – potentially covering re-letting fees or compensation to the tenant – when calculating overall campaign expenses. These costs can range from $500 to several thousand dollars depending on the lease terms and market conditions. A well-presented property, prioritising light and space, can attract buyers quickly, potentially minimising disruption to the tenancy. In the Eastern Suburbs, where family homes near schools are in high demand, a vacant possession is often favoured by buyers, but isn’t always achievable.
Understanding these regulations is crucial for a smooth property sale and maintaining positive landlord-tenant relations.