Since the 30 September 2024 changes to Queensland’s break lease laws, one trend has become increasingly clear:
Break leases are increasing.
While the legislative change was intended to simplify the process for tenants, it has had a significant side effect — ending a lease early is now far less financially painful for tenants, which is leading to more tenants choosing to exit fixed-term agreements.
For property investors, this shift means higher exposure to reletting events and additional costs that cannot always be recovered.
Understanding what changed — and what this means for your investment property — is critical.
What Changed on 30 September 2024?
The Queensland Government amended the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) to introduce a capped reletting cost formula when tenants end a fixed-term tenancy early.
Before this reform, tenants who broke a lease could be required to compensate the owner for a range of costs, including:
- Letting fees
- Advertising costs
- Rent until a new tenant was secured
- Other reasonable reletting expenses
Under the new system, these costs have been simplified into a capped amount known as “reletting costs.”
These costs are calculated purely based on how much of the lease remains, not the actual expenses incurred.
The New Reletting Cost Formula
The capped amount payable by a tenant is calculated as follows:
| Portion of Lease Remaining | Reletting Cost Payable |
|---|---|
| More than 75% remaining | 4 weeks rent |
| 50% – 75% remaining | 3 weeks rent |
| 25% – 50% remaining | 2 weeks rent |
| Less than 25% remaining | 1 week rent |
This amount is intended to help cover the cost of securing a new tenant.
However, it is important for investors to understand that reletting costs are not the same as the true cost of reletting a property.
What Reletting Costs Do NOT Cover
According to the Residential Tenancies Authority (RTA), reletting costs do not include:
- Advertising campaigns
- Letting fees charged by property managers
- Outstanding rent arrears
- Water or service charges
- Property damage or cleaning
These costs must be handled separately.
In practical terms, this means owners may still incur costs that cannot be recovered from the outgoing tenant, particularly when a lease is broken early.
Break Leases Are Increasing
Since the new laws came into effect, we have seen a clear increase in tenants ending leases early.
Within our own property management portfolio:
| Year | Break Leases |
|---|---|
| 2024 | 29 |
| 2025 | 45 |
| 2026 (first 2.5 months) | 16 |
If the current rate continues, 2026 is on track for approximately 75–80 break leases for the year.
That represents:
- A 55% increase between 2024 and 2025
- A projected 170% increase compared with 2024 levels
This is not a small shift — it is a clear trend.
While tenants will always move for personal reasons, the reality is that the new capped cost model has lowered the financial barrier for tenants to break a lease.
Simply put, breaking a lease is now cheaper and more predictable for tenants than it was previously.
What This Means for Property Investors
Every break lease triggers a reletting process, which typically involves:
- Advertising the property again
- Conducting inspections
- Screening applicants
- Preparing a new tenancy agreement
- Potential vacancy between tenants
Under the previous system, many of these costs could be recovered from the outgoing tenant.
Under the new legislation, that is often no longer possible.
This means that when a break lease occurs, owners may now face:
- Advertising costs
- Letting fees
- Vacancy periods
- Leasing administration costs
As break leases become more frequent, these costs become more likely to impact investors over time.
Why Fee Structures Now Matter More Than Ever
Historically, most property management agreements across South East Queensland follow the same structure:
- A lower management fee
- A separate letting fee when a new tenant is secured
- Separate advertising charges
This model has been standard across the industry for years.
However, under the new break lease legislation, this structure can expose owners to unexpected reletting costs whenever a tenancy ends early.
The reality is that very few agencies have adapted their pricing models to reflect the new laws.
An Alternative Approach: All-Inclusive Property Management
One approach that is starting to gain traction with experienced investors is an all-inclusive management model.
Under this structure:
- The management fee is slightly higher
- Letting fees are included
- Advertising costs are included
- Reletting events do not create additional charges
In an environment where break leases are increasing, this approach can significantly reduce the financial impact when a tenancy ends early.
However, it is important to note that this structure is still uncommon across most of South East Queensland, where the traditional “low management fee plus add-ons” model remains the norm.
At Clark Real Estate, however, we have taken a different approach.
For many years we have offered investors the option of an all-inclusive management package, where reletting costs such as advertising and letting fees are built into the management structure rather than charged separately. The goal is simple — to provide owners with greater certainty around costs, particularly in situations where a tenancy ends earlier than expected.
With the recent break lease legislation and the noticeable rise in early lease terminations, this structure is becoming increasingly relevant for investors who want to reduce unexpected expenses when a property needs to be relet.
A Conversation Worth Having
With break leases increasing and the legislation now limiting what can be recovered from tenants, many investors are starting to rethink how their property management is structured.
If you currently have an investment property in Brisbane and would like to understand:
- How these break lease changes could impact your returns
- Whether your current management agreement leaves you exposed to reletting costs
- Or how an all-inclusive management structure could reduce that risk
it may be worth having a short conversation.
Even if your property is currently managed elsewhere, we are always happy to provide a second opinion on how the new break lease laws may affect your investment moving forward.