Does Your Tenant Want to Terminate the Lease Early?
You often expect that when your new tenant signs their lease that they'll honor it through the end of the term of their stay on your property. However, there will be instances when a renter wants to terminate their lease earlier than what they agreed to on their contract.
Sometimes ending a lease early can't be helped, but there are other instances when a property renter needs to be held accountable for ending their lease. Below are examples of why a tenant ends a lease early, along with what you can do if you're faced with the issue.
When a tenant's need to leave is beyond their control
One of the most common reasons why your tenant might need to break their lease is due to military deployment. Although it's true that they need to honor your contract, their contract to the federal government is their first priority.
In fact, the Service Members Civil Relief Act protects service members who currently face active duty, reserve, or wartime deployment. It's illegal to hold the tenant to the terms of your lease if they are being called to military duty or deployment. Although it will be a bit of a pain to find new tenants while marketing your empty property, you really have no legal recourse except to allow the renter to serve their country in peace.
Another reason why tenants terminate their lease early is due to law that offers abuse victims protection. Specifically, if the renter can show proof that they are being physically or sexually violated, or if they are being harassed or stalked, they have the right to protect their safety by moving.
If you're unsure if your state protects renters in these scenarios, then it's best to seek legal advice. But you always have the option as the property owner to allow the renter to seek new shelter, without retribution.
Gray-area issues
There are what you might view as gray-area instances when your renter wants to leave, but they're not protected by laws that allow them to leave without penalty. For instance, there's the instance of job loss. Clearly, if your renter loses their main source of income due to job loss, then they won't be able to afford meeting the responsibilities of their contract.
You have the legal right to hold them responsible for honoring their lease by referring the issue to a collections agency. However, while you'll be able to damage the renter's credit report, there's a very good chance that you won't be able to collect any outstanding money, so you'll still be faced with taking a loss.
Ask yourself if seeking financial retribution is worth it or if it's just best to let things go, and quickly find a new renter for your property. The same line of reasoning holds true for tenants who experience major life issues such as illness or divorce. Sometimes things happen that are beyond anyone's control. You have the legal right to force the issue of payment, but in some instances, it might not be worth it for you to pursue these issues.
Clear instances of early lease termination and violation
Clear instances of a renter violating and terminating your lease include vacating the property without notice and before the lease term ends, causing serious damage to the property, breaking the law, or leaving early with notice.
If any of these take place, then you are protected to the fullest extent of the law to pursue financial damages from the previous renter. Keep in mind you also have the responsibility to find a new leasee as quickly as possible. You also can't charge the old tenant for rent they owe while you're also collecting rent on your property from the new renter.
One method of finding a middle ground between you and your outgoing renter is to include an early termination clause in the body of your rental lease. An early termination clause typically states that if your renter gives you a set period of time for notice of vacating the property, then you'll release them from financial penalties after they buy their way out of their current lease.
Typically, property managers and landlords across the country ask for two months rent at market value, plus a reletting fee. You can ask for anywhere between 60 days and one day notice of vacating the property. In all instances, the renter must inform you of their intent to leave in writing, and you must sign off on the acknowledgment of receiving the letter and agreeing to the letter.
Finally, keep in mind that the security deposit that you collected in the beginning is not a substitute for outstanding rental fees. If the property has been left in reasonable condition that wouldn't require serious cleaning or repair to the property, then the outgoing renter has the right to expect a return of their security deposit.