Your tenant may believe they have a great reason to break their lease, but as a landlord — even if you’re sympathetic to your renter’s situation — a broken lease is a frustrating inconvenience. The tenant has signed a lease to occupy the unit, abide by your policies and pay rent for the agreed period of time, but then notifies you that they want to break the lease before the renewal deadline. It’s time to deal with an unexpected vacancy and iron out the financial obligations in the lease contract so you don’t end up with the short end of the stick.
Here are a few steps you can take when dealing with a broken lease.
Inform tenants that a lease agreement is legally binding before they sign it. Many tenants don’t understand the ramifications of breaking a lease; they might be aware that they’re supposed to stay for the entire lease term, but could assume there’s some flexibility. Explain the legal aspects of a lease and the course of action for breaking one, such as finding a subletter (if you allow it), giving up the security deposit or paying rent for the remaining months.
Some leases include an “early termination” clause, which lets the renter out of the lease, without penalty, under certain circumstances. You can decide whether to include such a clause — but if you don’t want to, and you are using a generic lease form, make sure it does not allow for early termination.
Require notice in writing
Ask your tenant to provide a written request to terminate the lease early, either through email or on paper, which explains their reason for leaving. Issues like loud neighbors, taking a job in another area, inconvenient parking or moving in with a significant other don’t require you to release a tenant from the lease.
But, other circumstances can justify breaking a lease without penalty. If you have neglected to make needed repairs or otherwise failed to provide a safe and livable property, a tenant has a good case for breaking their lease. In addition, leaving for military duty or relocating due to an employer-mandated job change are valid reason for you to comply with the tenant’s request. Check your state laws for specific exemptions.
Hold the tenant responsible — within reason
Just because the tenant is vacating the property doesn’t mean they aren’t responsible for the home. The lease is a legally enforceable document stating that the landlord has given up possession to the unit for a specified amount of time in return for rent. Even if the leaseholder finds a subletter, they retain the responsibilities for damages and payments until the end of the lease.
While the leaseholder has a legal responsibility, most states require landlords to make a reasonable effort to find a new tenant; purposefully leaving the unit vacant in order to collect rent from a tenant who’s broken their lease is not usually permitted.
Know your rights and responsibilities as a landlord
A tenant breaking a lease prematurely might put you in a tight spot, but you can always seek legal advice. Professionals will know the ins and outs of the landlord laws in your state and can help you determine the right course of action. Be sure you’ve read through your lease agreement carefully — landlords and tenants alike can miss details in the fine print, and it’s in your best interest to be fully informed about your lease as well as local statues.