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Steps to Take When A Tenant Wishes To Break the Lease

Vacancies and tenant turnover are by far one of the most expensive aspects of owning a rental property. Long-term leases and properly screened tenants can mitigate this cost, but there are times when even an otherwise-excellent tenant seeks to leave the unit before the lease has termed.

 

Lease agreements serve to protect landlords and owners from lack of generated income by providing assurance of occupancy for a specific duration of time. However, even though lease agreements are legally binding commitments, some tenants try to change their housing situation during their lease term. While these tenants may give notice, it does not mean they are no longer financially obligated to the rental.

 

With the exception of specific legal circumstances, (federal and state laws require a landlord to allow early lease termination for a transfer for government or military personnel) it is the landlord who has the discretion to allow a tenant to break the lease and vacate the property early without owing future rent. While agreeing to allow your tenant to break the lease will mean that you are forgoing the reliable income from rent, there are some circumstances when it is easier for you to let your tenant out of their rental contract early.

Steps Landlords Should Take When Your Tenant Asks to Break the Lease:

 

While these are the primary reasons that a broken lease may be excusable, there are still steps every landlord should go through in these and other circumstances.

 

Find Out The Reason:

 

If your tenant falls under one of the below categories you can work with them to mitigate loss on both your and the tenant’s end and allow them to responsibly end their lease early. If your tenant doesn’t offer a legitimate reason for leaving, or simply wants to move to a new property, remind them of their legal obligation to the current unit.

 

Review the Lease with Tenants:

 

Review the lease agreements and remind your tenant that they are technically responsible for rent payments until a new and qualified renter can be found. Create a written agreement that reiterates this information and informs the tenant that you will make a reasonable effort to secure a new qualified tenant.

 

Properly Vet Replacement Renters:

 

Allowing your tenant to sublet can create issues. Do not allow your tenant to find their own replacement unless you intend to vet the applicants as well. A current tenant in a hurry to move will not be as cautious as you when finding a truly responsible and qualified new renter. If your tenant has recommendations for replacements and would like to sublet, ensure they go through the same tenant screening as all your other tenants. Doing otherwise can set you up for trouble.

Legitimate Reasons to Break a Lease:

Job Loss or Transfer:

 

If a tenant loses their source of income through job loss, it can simply mean they will be unable to afford their rent payments. Without a reasonable employment prospect, your previously excellent tenant becomes an unqualified renter who will likely not provide you the rental income you need (and wouldn’t have passed your original tenant screening criteria in the first place). Save yourself and your renter the stress and allow your newly unqualified tenant to break the lease so you can find a new tenant and start collecting income again.



Since tenants don’t always have control over their job, it can be reasonable to work with them to responsibly terminate their lease to accommodate a transfer. In fact, in some states, landlords are legally required to allow tenants to break their lease for a job transfer. Be sure to check your local laws should a tenant require a move for this reason.

 

Breakups:

 

A divorce or a split up between couples or friends who no longer get along can have a serious impact on their financial eligibility. With these changes in living situations, previously combined finances can mean that each partner’s rent contributions could be seriously diminished. Rather than enter into the middle of drama or heartbreak and try to navigate the financial impact in the process, it can be simplest to work with them to end a joint lease.

 

Illness or Death:

 

Your tenants do have a right to their privacy, but if they share an extraordinary family circumstance with you--such as a serious illness or death within the family-- and need to move out suddenly this could be an instance where demonstrating compassion is welcome. While financially prudent landlords should not constantly allow a sad story to impede judgment, this is certainly a circumstance where empathizing with your tenant’s difficult time is important.





In circumstances where a tenant wishes to break the lease, you must overall rely on your judgment. While your renter is contractually obligated to remain within your unit, thoughtfully approaching the matter on a case-by-case basis can save you and your current tenant a lot of time and stress. In the end, a broken lease and the ability to quickly find a truly qualified renter can be significantly more affordable than seeking to penalize a tenant who will no longer be a reliable source of income.

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