One of the most common misunderstandings in rental agreements is this:
“Since I haven’t moved in yet, can I still back out of the lease?”
Tenants often think: “I haven’t moved in—should be fine if I cancel now, right?”
Landlords may also assume: “They haven’t moved in yet—if I don’t want to rent anymore, that shouldn’t be considered a breach, right?”
But legally, things work very differently.
Whether a tenant or landlord can back out, whether it’s a breach, and whether compensation is required does not depend on whether the tenant moved in— it depends on whether the lease contract has already been validly formed.
Here’s the clearest, most straightforward breakdown.
What Does the Law Say?
Civil Code Article 114:
“A juridical act that has been rescinded shall be deemed void from the beginning.”
✨ Plain explanation: If rescission is successful, the contract is treated as if it never existed. However, rescinding a contract is allowed only in special circumstances such as fraud, coercion, or a significant mistake. Mere regret, not wanting to move in, or a last-minute change of mind does not qualify as a valid ground for rescission.
⚖️ Legal Source: Civil Code Article 114 – Law.moj.gov.tw
Civil Code Article 153:
“A contract is constituted when the parties have mutually expressed their assent, whether expressly or impliedly.”
✨ Plain explanation: As long as both parties agree—by any means—on the rent amount, lease term, deposit, property address, and other essential terms, the lease is considered formed. Whether the tenant has moved in, paid a deposit, or signed a physical document does not affect the validity of the contract.
⚖️ Legal Source: Civil Code Article 153 – Law.moj.gov.tw
Civil Code Article 450:
“For leases with a fixed term, the lease relationship terminates when the term expires.”
✨ Plain explanation: A fixed-term lease (such as a one-year lease) must generally be fulfilled until the end of the term and cannot be terminated at will. Whether early termination is allowed depends on whether the contract includes such a clause.
⚖️ Legal Source: Civil Code Article 450 – Law.moj.gov.tw
Required and Prohibited Lease Terms & Mandatory and Prohibited Clauses:
“If early termination is permitted under contract, the party terminating shall notify the other at least 30 days in advance. If not notified, the breaching party shall compensate up to one month’s rent.”
✨ Plain explanation: If the contract has a checked box for “may terminate early,”
→ Tenant must give at least 30 days’ notice
→ No prior notice = penalty up to one month’s rent
⚖️ Legal Source: Ministry of the Interior – Residential Lease Standard Contract Regulations
Civil Code Article 216, Paragraph 1:
“Compensation for damages is limited to losses actually incurred and profits lost.”
✨ Plain explanation: If early termination causes losses (vacancy, agent fees, advertising costs, rent difference), the injured party may claim damages—but only to the extent that can be proven.
⚖️ Legal Source: Civil Code Article 216 – Law.moj.gov.tw
Civil Code Article 565:
“One party provides an opportunity or mediates the conclusion of a contract; the other pays remuneration.”
✨ Plain explanation: A real estate agent earns a fee for providing an opportunity or mediating the lease.
⚖️ Legal Source: Civil Code Article 565 – Law.moj.gov.tw
Civil Code Article 568, Paragraph 1:
“A broker may claim remuneration once the lease is successfully concluded through their mediation.”
✨ Plain explanation: As long as the lease contract is formed, the real estate agent’s fee becomes payable. Whether the tenant moves in, backs out, or terminates early later does not affect the agent’s right to remuneration.
⚖️ Legal Source: Civil Code Article 568 – Law.moj.gov.tw
What Happens If the Lease Is Formed but the Tenant Hasn’t Moved In Yet?
1️⃣ The lease allows early termination → You can cancel if you follow the rules
If the contract clearly permits early termination:
- Must give 30 days’ advance notice
- No notice → liability up to one month’s rent
- Move-in status does not matter
This is the simplest scenario—just follow the contract.
2️⃣ The lease says “no early termination” → Not moving in does NOT allow cancellation
Not moving in ≠ the lease hasn’t started.
If early termination is prohibited:
- Backing out counts as breach of contract
- Tenant/landlord must compensate for actual damages
Common damages include:
- Vacancy rent
- Brokerage fees
- Advertising & showing costs
- Rent difference (if new rent is lower)
Damages must be reasonable and provable.
3️⃣ The lease does not mention early termination → Treated as “no early termination”
Many people assume:
“Not written = both sides can cancel anytime”
Completely incorrect.
Not written → treated as no early termination allowed.
Not moving in does not allow free cancellation. Compensation for proven damages still applies.
Real Estate Agent Fees: Contract Formed = Fee Owed
In brokerage relationships, the key question is:
👉 Did the lease contract form because of the agent’s mediation?
If yes:
- Tenant backs out → agent fee still owed
- Landlord backs out → agent fee still owed
- Not moving in → still owed
- Early termination → still owed
- The injured party should seek compensation from the breaching party, not the agent
The agent has already fulfilled their legal duty by successfully concluding the lease.
🔮 Related Read: What Is the Rental Agreement Review Period in Taiwan?
📚 Related Read: Can You Get Your Deposit Back After Backing Out in Taiwan?
🕯️ Related Read: Can a Tenant End a Lease Early in Taiwan? What “May Terminate” vs. “May Not Terminate” Really Means
⚗️ Related Read: Can Landlords Terminate a Lease Early in Taiwan?
Lease Cancellation & Early Termination Quick Reference Table
Lease Term | Early Termination Allowed? | Notice Required? | Compensation? |
| Allows early termination | ✅ Yes | ✅ 30 days | Up to 1 month’s rent |
| Prohibits early termination | ❌ No | – | Actual damages |
| No clause on termination | ❌ Treated as prohibited | – | Actual damages |
| Meets legal rescission requirements | ✅ Yes | – | Contract void ab initio |
| Brokerage fee | ✅ Payable once contract forms | – | Cannot be cancelled |
Conclusion: Not Moving In Does NOT Mean You Can Back Out
The legal effect of a lease begins when the contract is formed, not when the tenant moves in.
Once the lease is validly concluded—whether or not anyone has moved in, received keys, or paid a deposit—both parties are obligated to perform according to the agreement.
Whether early termination is allowed depends entirely on the contract.
Whether compensation is owed depends on proven damages.
As for brokerage fees, the agent’s right to remuneration arises the moment the lease is concluded and does not disappear because someone later changes their mind.
Understanding these rules helps both landlords and tenants avoid conflict and navigate the rental process with clarity and confidence.
