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Benchmark - Real Estate Cases & Commentary
Tenancy matters
    •  Termination of tenancy
        -  Undue hardship

Undue hardship 

Landlords should be aware that fixed-term residential tenancies may be terminated by the Tribunal if a tenant can show that they will suffer undue hardship if the tenancy is to continue. The Tribunal will not necessarily award compensation to the landlord for the loss of rent.

The tenant was a specialist solicitor. She accepted an attractive financial package to move from South Africa to work in Australia, and entered into a two-year lease commencing in January 2009. Six months later the tenant was retrenched.

The tenant applied to the Tribunal for the termination of the lease, since she could now only afford to pay rent of less than half the agreed rent. The tenant and her husband had three children and were now living on her husband’s income, which was much less than the tenant’s previous income. They had been unable to sell their home in South Africa. The tenant had been unable to find suitable employment due to the economic downturn.

The Tribunal was satisfied that, in the special circumstances of this case, the tenant would suffer undue hardship if the lease was not terminated.

The Tribunal noted that in a case where changed circumstances warranted an early termination, a landlord was not necessarily entitled to compensation for loss of rent over the balance of the lease. In this case, the Tribunal allowed the landlord compensation only for the re-letting fee and rent up to the date on which the new tenant was to enter into possession of the premises.

Turnbull v Huon [2009] NSWCTTT 665