Your tenant just sends you an early termination of lease. What do you do?
You can go on the defense and tell your tenant they’re responsible for rent until the end of the original lease. The tenant will be responsible for finding a sublease to cover their rent. If worse comes to worst, you can file a civil suit.
Is that something you want to go through?
The other option is to work with your tenant. Not all cases of a tenant sending an early termination of lease are malevolent. Many tenants must leave a lease early for a new job, health reasons, marriage, or other big life-changes.
While receiving an early termination of lease letter may sound stressful at first, it can be an easy straight-forward process that leaves both you and your tenant in good spirits. They may even return and want to rent from you in the future.
Here’s how to handle this situation for the best possible outcome.
What is a Lease?
A lease is a contract stating the responsibilities of the tenant and the property owner. It states the amount of time, like 12 months or 24 months, a tenant has the right to live on a property.
A tenant can sign the lease again to extend their time on the property as long as they meet all tenant responsibilities.
The lease should cover everything from the amount of monthly rent and when it’s due to tenant and management responsibilities. For example, the tenant handles paying for heat, electricity, and general care of their unit. The property owner cares for appliances, major repairs, and other building issues.
Depending on how extensive your lease is, you may also have an early termination of lease clause. This clause explains how the process works and the tenant’s and property owner’s responsibilities.
The lease can explain parking, guest, and other miscellaneous policies to ensure the safety, quality, and equality of your rental property.
Before signing the lease, most property managers screen their potential tenants with a background and credit score check. Doing so will help you find reliable tenants.
The more details you add, the stronger your lease will be. Of course, you’ll want to avoid unreasonable requests as this will make finding and keeping tenants.
When you and your tenant sign it, you’re both agreeing to the responsibilities and expectations of the lease.
Legal Reasons for Early Termination of Lease
There are many horror stories of tenants sending an early termination of lease and then skipping town. This leaves you in a lurch to find a new tenant and clean the former tenant’s mess.
Fortunately, many tenants end their lease early for legally acceptable reasons.
- People who are active members of the military have the right to leave a lease early without any penalty
- The tenant must relocate for a new job
- Any health issues or family emergencies
- Victim of domestic violence or other issues
- An eviction of the current tenant
- Landlord interferes with quiet and peaceful renter enjoyment or fails to maintain a habitable property
Hopefully, the last one is never a reason for an early termination of lease. In most cases, the property manager will give the tenant 30 (or more) days to pay rent and move out. This allows you time to find another tenant.
Your lease should describe if the tenant handles additional cleaning of the unit and what they owe in rent or damages when they leave. Again, it’s best to be civil and open with your current tenant to keep the process stress-free.
What Do You Do?
Receiving an early termination of lease is never an exciting process. However, there are many steps you can take to keep the process smooth and positive.
1 Explain Tenant Expectations
While the lease should explain an early termination of lease process and responsibilities, it helps to send your tenant a hard copy that explains everything in detail. Get the notice to the tenant within 10 days of receiving their letter of lease termination.
Explain exactly what the tenant is responsible for. This includes cleaning, monthly rent, termination fees, and if they need to find someone to sublease the unit. If you’re in charge of finding a new tenant, tell your current tenant that they are responsible for rent until a new tenant takes over.
Be as clear and direct as possible to avoid confusion. Add a timeline and specific costs the tenant owes.
2 Keep Records of Communication
Start a file of all communication between you and your tenant as soon as you receive early termination of lease. This is to protect you both in case anything should head South.
If a tenant took off before the end of the lease, write down how you found the empty property and action you took to contact the former tenant. Add lots of details such as dates, times, notes, and phone numbers.
Should you go to court, you’ll have an accurate record of all communication between you and your former tenant. This will help you recover any rent that the tenant still owes.
3 Keep Communication Open
Don’t be the property manager who avoids conflict. Keep all lines of communication open between you and your tenants. If a tenant needs to leave early, you’ll receive their early termination of lease with plenty of time to find a new tenant.
Good communication shows you value your tenant. They will be more likely to clean the unit and pay you any rent or fees due after they let you know they’re terminating the lease early.
4 Start Looking for a New Tenant
Even if it’s the current tenant’s responsibility to find a new sublease, start looking for candidates and advertising the property. There’s no guarantee the current tenant will find a new reliable tenant.
Finding a new tenant yourself will minimize any financial losses and make the whole process much easier.
5 When to File a Civil Suit
Let’s say you do your best to make the process of an early termination of lease easy, but your tenant refuses to play by the rules. This is when you may need to file a civil suit to recover any fees and payments the tenant owes.
Examples include property damage, overdue rent, and any outstanding fees. If you need to file a civil suit, the court will reach out to the original tenant to set a date for the hearing. A judge will determine if the tenant owes you anything or how the tenant will repay you.
3 Common Early Termination of Leases
As a property manager or owner, you’re bound to face an early termination of lease. Each one will be a little different. Here are the main two common terminations of leases you’ll encounter.
Breaking a Lease with Advanced Notice
Remember when you went through a screening process to find reliable tenants? Not only will a reliable tenant pay rent on time, but they’ll also send you a letter in advance if they need to end a lease early.
Receiving a notice in advance will allow you the opportunity to work with your tenant to make both of your experiences smooth. You and your tenant can work out the specific responsibilities you each have in regards to early termination of lease.
Your tenant will be more likely to cover their rent and fees until a new tenant can take over the lease.
Finally, the more time you have to replace the current tenant, the less money you will lose.
Breaking a Lease with No Notice
It’s never a good situation when your tenant just grabs their things and leaves without any notice. Contacting the former tenant will be near impossible leaving you with their rent.
On top of that, the unit is a disaster. Not only are you without a paying tenant, but you’re stuck with a unit in need of cleaning and repairs.
As soon as you discover a vacant unit, start documenting everything. Unfortunately, you’ll have to file a civil suit to recover any financial losses.
Proper Early Termination of Lease Etiquette
In most places, a tenant must give at least 30 days of notice prior to leaving the rental unit. This allows the property manager time to find a quality new tenant.
The tenant should provide you with a lease termination letter describing when they need to leave and why.
Depending on the lease, the tenant may be responsible for the rent until the end of the lease even if they need to leave it early. This is only if you or the current tenant are unable to find someone else to take over the lease.
Do note that you cannot collect rent from both the former tenant and the new tenant for the same unit. This is illegal!
Always do your best to work with your tenant when they send an early termination of lease.
