Transfering a lease in Australia

Are you currently renting an apartment in Australia but thinking of moving out? Perhaps it wasn’t what you expected, you need to leave the country, or you simply want to change states.

There are several aspects you should consider when transferring a lease in Australia, as it might not be as simple as you think.

Here we go!

Check the lease agreement

The first thing you should do is check the lease agreement. Take a look at the clauses and see if there’s any mention of lease transfer. There’s most likely an "Assignment Clause" that outlines the conditions under which one party can transfer or "assign" their rights and/or obligations to a third party.

These clauses usually come with conditions, for example:

• You may need to obtain prior consent from the landlord.

• It may state that transfer is possible, but only if you find someone who meets the requirements set by the real estate agency.

• It may state that transfer is not allowed and if you do move, you’ll need to terminate the lease and pay a penalty for not fulfilling the contract terms.

• It may specify certain situations where transferring the lease is prohibited.

In this article, we’ll talk about the scenario where the landlord allows you to find someone to take over the property so you don’t have to pay the penalty.

Seek for written consent

You must request written permission from the landlord to transfer the lease, including your reasons for leaving and explaining that you will find someone interested in taking over the lease.

I took the time to extract this clause from a lease agreement of a property I rented previously, which addresses this point:

“If the tenants change during the lease, the landlord or real estate agent must be notified as soon as possible, preferably within 24 hours. Written permission must also be requested to transfer the lease of the property. The landlord or agent may not unjustifiably deny the request to transfer. A text message (SMS) cannot be used to request permission.”

Find someone suitable

Once you’ve received approval from the real estate agent to transfer the lease in written, you need to find someone who meets the agency’s requirements, which are probably the same as the ones they required from you at the beginning.

Advertise the property in groups or communities well in advance so you have time to evaluate the profiles and present the most suitable one to the real estate agency. You can emphasize the benefits of the location, such as its proximity to public transport, if it is spacious, the services, and how comfortable it is to live there.

A good way to evaluate profiles is to first ask about the person's financial stability, meaning whether they have a reliable job or steady income. Another key question is about their rental history, to see if they have been reliable tenants.

You will choose the profile you think best fits based on your judgment, but it’s the agency’s responsibility to request the necessary documents from applicants, not yours, as there may be confidential information that people are not willing to share with you.

Present your candidate

Once you’ve received written approval, you can present the candidate’s profile to the real estate agency. The agency will then evaluate all necessary aspects, such as income verification and other checks, to determine if the candidate is eligible.

Vacate the property and formalize

Once the new tenant is approved to occupy the property, the process of vacating for the current tenant begins.

You must vacate the property by the agreed-upon date. This means removing all your furniture and belongings and leaving the property in the condition in which you received it. Check out our article on how to properly end a lease.

To formalize the lease transfer, it’s advisable for both parties (the tenant and the landlord) to sign documents confirming that the current tenant is transferring the property to the new tenant. This may include signing a termination agreement or a lease transfer.

Claim you bond back

If everything is in order and the real estate agency agrees that the property has been returned in the agreed-upon condition, you can proceed to claim your bond (security deposit) and continue with your plans.

It’s important to remember that the bond you paid at the start of the lease should have been securely deposited with the Residential Tenancy Bond Authority (RTBA), which is the entity responsible for managing all rental bonds. Once the agency confirms there are no damages, that the property has been properly cleaned, and everything is in place, they will approve the return of your bond.

Important! If you transfer or sublet the property without receiving permission from the landlord, you may face several charges. For example, the contract could be terminated, and you may be required to pay for the remaining months or for marketing costs to advertise the property.

To conclude
Transferring a lease is possible if you do the process carefully and by following the right steps. Remember, the first thing you need to do is communicate your intention to transfer the lease in writing and as soon as you can to your real estate agent or landlord. Once you receive a response, you can follow these steps to efficiently plan your process.