When you break a lease, two things happen at once — you become liable for break lease costs, and your landlord has the right to claim those costs from your bond. Understanding how these two things interact is essential to knowing what you'll actually get back, and what you can do to protect your position.
- Your bond is the first thing a landlord claims against when you break a lease — lost rent, advertising, re-letting fees, and damage all come out of it.
- It is rare to get your full bond back when breaking a lease early.
- If costs exceed your bond, your landlord can pursue the difference through SACAT.
- The July 2024 caps on lost rent apply to bond claims exactly as they apply to any other claim — they limit your exposure.
- Leaving the property in excellent condition and following the correct process gives you the best chance of maximising your bond refund.
Your bond's role when you break a lease
Your rental bond — up to four weeks' rent, held by Consumer and Business Services (CBS) — is not just a security deposit against damage. In a break lease situation, it functions as the first pool of money your landlord draws from to cover all costs arising from your early exit.
This means the same bond that might otherwise be returned in full at the end of a normal tenancy becomes the financial buffer against break lease costs. The landlord doesn't need separate permission to apply it — they simply lodge a claim with CBS.
What can be claimed against your bond — and in what order
A landlord breaking down a bond claim after a break lease will typically work through costs in this order:
- Unpaid rent — any rent outstanding at the date you vacated. This takes priority.
- Lost rent — rent from when you vacated until a new tenant moved in, subject to the July 2024 caps (maximum one month's rent if less than 24 months remain on the lease).
- Advertising costs — reasonable costs to advertise the property for a new tenant, calculated using the SACAT formula based on how far through the lease you were.
- Re-letting fee — the property manager's fee for finding a new tenant, also calculated using the SACAT pro-rata formula.
- Damage beyond fair wear and tear — the same standard that applies at the end of any tenancy. Holes in walls, stains, broken fixtures — not normal wear.
- Cleaning costs — only if the property was left in genuinely worse condition than when you moved in.
The lost rent caps introduced by Section 75A of the Residential Tenancies Act in July 2024 apply regardless of whether the landlord is claiming against your bond or seeking additional compensation through SACAT. If less than 24 months remain on your lease, lost rent exposure is capped at one month's rent — full stop.
A worked example
This is how a typical bond claim might look for a tenant breaking a 12-month lease at month 6, paying $2,000/month rent with a $2,000 bond (four weeks at $500/week).
Example — breaking a 12-month lease at month 6
In this example the tenant gets back just $5. The daily pro-rata calculation ($500 ÷ 7 = $71.43/day) is how SACAT and property managers calculate lost rent — not by the month. If the property had been left with any damage or cleaning costs, the bond would be exhausted entirely and the landlord could pursue the shortfall through SACAT.
What if your break lease costs exceed the bond?
This is where things become more serious. If the total of all legitimate claims against you exceeds your bond, the landlord can apply to SACAT for an order that you pay the difference.
If your break lease costs exceed your bond and you don't pay the shortfall, your landlord or property manager may list you on a tenancy database — often called a "blacklist." This can make it significantly harder to rent in the future, as most agents check these databases before approving applications. Most agents won't list a tenant when costs are covered by the bond — the risk materialises when they aren't.
This is one of the least-talked-about consequences of a poorly managed break lease. The financial exposure is one thing — the impact on your rental history is another, and it can follow you for years.
What the landlord must do before claiming your bond
Your landlord cannot simply pocket your bond. The process has legal requirements:
What they must do
- Actively advertise and attempt to re-let the property as quickly as possible
- Lodge their bond claim with CBS within a reasonable timeframe after the tenancy ends
- Apply the SACAT formula to advertising and re-letting costs
- Respect the Section 75A lost rent cap
- Provide evidence of actual costs incurred
What they cannot do
- Claim rent for the full remaining lease term
- Claim advertising costs without actually advertising
- Sit on the property and run up lost rent while doing nothing
- Claim costs beyond the SACAT formula limits
- Pay out the bond without giving you 14 days to dispute the claim through CBS
How to protect your bond position before you leave
Leave the property in excellent condition
Damage and cleaning costs are entirely within your control. Professional clean, fill minor holes, replace any broken items. The less the landlord can claim for condition, the more of the bond is protected against break lease costs.
Take timestamped photos on exit
Walk through every room and photograph everything, the same way you did on entry. If the condition report said the carpet was already worn, you need evidence it wasn't you who damaged it.
Get any cost agreements in writing
If you and your landlord reach an agreement on what break lease costs you'll pay — or if they agree to waive any costs — put it in writing before you hand back the keys. Verbal agreements are hard to enforce.
Track the landlord's advertising efforts
Ask for updates on when the property was listed and at what rent. If they delay advertising or set an unreasonably high rent that deters applicants, their claim for lost rent weakens. Your liability for lost rent stops when a new tenant moves in — the sooner that happens, the better for you.
Dispute anything that seems wrong
If the bond claim comes through and the numbers don't match what you expected, contact CBS and lodge a dispute before agreeing to the claim. Once the bond is released, it's much harder to recover.
If you disagree with the bond claim
You don't have to accept a bond claim you think is wrong. Once CBS notifies you of a bond claim, you have 14 days to lodge a written dispute. If you don't respond within that window, CBS can pay out the bond automatically — so act quickly. If you dispute it, CBS will attempt conciliation first, and if that fails, the matter goes to SACAT where the landlord will need to prove each cost is legitimate and correctly calculated.
Before going to SACAT, contact Tenants Information & Advocacy Service (TIAS) on 1800 060 462 for free advice. They can help you assess whether the claim is legitimate and how to respond.
If you are leaving because of domestic violence, the situation is more complex. Even where a tenant exits under the DV pathway, the landlord may still be able to claim break lease and advertising costs against the bond — though landlords can choose to waive these. SACAT cannot waive costs the landlord is entitled to without their consent. If you're in this situation, contact the Domestic Violence Crisis Line on 1800 800 098 (24 hours, free) before making any decisions about your bond or tenancy.
The bottom line: Your bond is the first thing that gets hit when you break a lease. The July 2024 rent caps limit your exposure on that front, but advertising, re-letting, and damage costs can still absorb most or all of it. The tenants who come out best are the ones who leave the property in excellent condition, follow the process carefully, and hold their landlord to their legal obligations on mitigation and costs.
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