How to Manage Early Lease Termination and Its Causes?

A lease agreement is a legally binding contract that binds both the landlord and the tenant; in case your tenant wants to break the lease early, this legal document will become your mightiest weapon. However, we can never deny that a lease agreement also works in favor of the tenant as much as it works in favor of the landlord. Such situations may not occur often, but they do happen, and here’s how you can deal with them.

Reasons to Terminate or break Lease Early?

Not every tenant is a bad apple; most tenants have a solid and understandable reason to break the lease before time. If the reason is valid enough, the landlord is obliged to let the tenant go; here are some of the reasons that are valid enough to terminate the lease.

Deployment:

Under Service-members Civil Relief Act, the following are obliged to terminate leases and report to duty in case of deployment and if their minimum distance is 50 miles:

• National Guard
• The National Oceanic
• Atmospheric Administration (NOAA)
• The U.S. Public Health Service

However, they are given time to settle their affairs; this means that they can provide the landlord a 30-day notice before moving out and terminating the lease. If they are deployed earlier, they will still pay you for the rest of the month.

Domestic Violence:

If your tenant is in an unsafe situation, he or he can break the lease and move out, especially in case of abuse, domestic violence, stalking, sexual assault, or harassment. As a landlord, you are obliged to accept the termination letter if it comes with any of the above reasons.

Job Loss:

Any compassionate landlord will understand how bad the situation is with the tenant if they lose their job, especially amid the pandemic when people are trying so hard to make ends meet. The decrease income or suspension of it will make it hard for the tenant to pay rent on time or even afford to pay it at all. In such a situation is better for both the landlord to break the lease as it will be less time-consuming and less expensive than eviction or hiring a debt collector.

Divorce or terminal/severe Illness:

A divorce or severe illness both are as damaging as losing a job. Both are bound to affect the financial position of your tenant. And in such a case, they will find it hard to pay the bills on time or pay them at all. As a landlord, there is no legal obligation on you to let your tenant go and break the lease, but as a compassionate human being, you might find yourself in a tricky position.

Transfer from one place to another:

Just like deployment, the tenant has no control over their transfer. You will find that some states do accept this as a valid reason and allow the tenants to break the lease if they get a transfer.

Uninhabitable:

As a landlord, your dwelling should be habitable; it should have running water, a safe atmosphere as well as free of any infestation and mold. The rental should also be structurally sound. You should provide your tenant with gas, heating, sound plumbing, operational sinks, toilets, showers, electricity, non-leaking roofs, etc., all in all; the place should be free from all life-threatening hazards. Tenants can break the lease if they find the dwelling uninhabitability, and they are also protected by state laws in such a situation.

Privacy issues:

Landlords own the place; however, if the tenant is paying for your rental, he or she is entitled to their privacy. No landlord is allowed to barge in and start harassing the tenant or invade their privacy. If you are due an inspection, you are obliged to send in a notice 24 hours before knocking on their doors. If there is a breach of privacy, the tenant is in his full right to break the lease and leave. However, the tenant will still need to hand in a formal notice.

Note to landlords:

Not all tenants are honest, so be ready to face tenants who fake habitability or privacy issues just to get out of paying rent and breaking the lease. The easiest way to get out of this is to have everything properly documented, should this ever get to the authorities. A fully maintained record and photographs will be enough to prove your tenant wrong.

How To Soften the Blow Of Losing A Tenant Before Time?

You can’t demand rent for a vacant place from your former tenant because he broke the lease sooner than required, so the best thing is to start looking for a tenant as soon as you get the notice of termination. This will help you soften the blow of losing the tenant and the stable income. You might lose the income for a month or two, but if you start early and search aggressively, you might be able to find yourself a tenant real soon.

Let The Tenant Help but Do Not Let Them Sublet:

Most tenants are compassionate, and such people will want to help you find an excellent tenant to replace themselves. This is not a bad move; they might be able to find a tenant faster than you can, but do not let them take charge and sublet your rental on your behalf. Take the help but treat the next tenant just like any other tenant.

Early Termination Fees and Buy-out Options:

You can add a clause of fees and buying-out options in case of early termination in your lease agreement. This will both protect you and give the option to the tenant to buy his way out of the lease without any hassle or guilt; such clauses are a win-win for both parties.

Conclusion:

It’s a tricky situation to be in because one such tenant sets the example that others feel they can follow because of the time. So, always keep yourself prepared and well-documented. Ensure your lease agreement is a solid one and has a policy that applies to all tenants without discriminating any.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.

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