As a landlord, you have to handle a long list of property management issues such as finding new renters to addressing noise complaints. But what should you do when you or your renter needs to break a lease? Find out how to deal with early termination of a lease agreement, regardless if you or your renter initiates the break.
What to Do When You Need to Terminate a Lease Early
When you own property, dozens of different factors could prompt you to end a lease early. For example, you might want to sell the property when the market is good or your renter might be causing frequent problems. However, just because you want your renters to move out early doesn’t mean you can do so legally. Follow the steps below to make sure you’re approaching the situation the right way.
Check the Lease Terms
First, locate the lease agreement that both you and your renters signed. If it has a clause that allows you to end the lease early without cause, you can move forward with breaking the agreement.
Make sure you take key actions, such as giving renters a move-out notice, by the date stated in the lease. For example, the lease terms might require you to give a 30 or 60-day notice for early termination.
Follow the lease terms as closely as possible so you don’t run into legal issues down the road. For example, the agreement might require you to send an official lease termination notice by certified mail rather than writing a quick email.
Ask Renters to Leave
If your lease agreement doesn’t include an early termination clause, you don’t have the legal ground to force your renters to leave. Both you and your renters have to abide by the end date stated on the lease agreement.
Just because you didn’t add an early termination clause to your agreement doesn’t mean you’re out of options. Instead, you can always plead your case and ask your renters to consider ending the lease early.
If you opt for this approach, be prepared to make some concessions to account for the extra hassle your renters have to handle. For example, you might offer to waive all or part of the last month’s rent.
What to Do When Renters Want to Break Their Lease Early
You’re likely to encounter renters who want to break their leases early as a landlord. Follow these four steps to handle the situation effectively.
Assess the Reason
Renters may have a wide range of motives to end a lease early. Reasons like relocating to another area or issues with neighbors don’t meet the early termination rules for most lease agreements. However, the following are often legitimate reasons to break a lease:
Review the Lease
When renters ask to terminate their leases early, make a point to sit down together to review the original agreement. If the agreement allows for early termination without cause, you have to allow renters to break the lease. If it allows renters to break the lease early in some cases, make sure their reasons work within the parameters.
Next, talk with them about a timeline for the next steps. Make sure the timeline meets the lease requirements as many agreements ask for at least a 30 or 60-day notice. Ask them to provide you with a notice to vacate letter so you have everything in writing.
Know the Law
In some cases, renters’ reason might not meet the conditions of the lease or the agreement might not allow for early termination. However, you might still have to allow your renters to break the lease early, depending on where the property is located.
Many states have laws that favor renters, allowing them extra leeway with lease agreements. For example, if renters request early termination, some states require landlords to attempt to find new renters rather than holding the original occupant to the agreement. If you find a new renter that passes your screening process, you have to allow the original occupant to end the lease early.
Why You Should Draft Leases Carefully
After dealing with an early termination once, you may want to update your standard lease agreement for future renters. Consider adding an early termination clause that allows you as a landlord to break the lease early with no cause, if it abides with your local legislation. You may also want to add terms for renters terminating a lease early, such as incurring a fee or losing the security deposit.
When you own rental property, it’s essential to understand early termination clauses and know how to handle these requests from renters. Save this guide so you can deal with lease issues quickly and confidently.
Zumper's team of rental experts provide you with the latest rental tips, trends, and local laws to help you find great renters, lease your property, and optimize your rental income.
