Landlord Tips: Terminating the Lease Early

Photo: Apartment Building in California

There are many different reasons a tenant may want to break a lease early, whether it’s because they are ready to purchase a property instead of renting, or they got a new job and are moving to a different area. In any event, as the landlord it never is ideal to lose a tenant. As a business owner, you work under the assumption that every tenant will pay out their lease, and you rightfully count on that income each month. Losing a tenant to an early termination of lease and having to start all over with finding that income is not ideal.

So what does a landlord do when a resident decides they want to break a lease early? As with everything, it depends on the situation, but the following is a general look at how property owners can handle this situation:

Know the Law

First and foremost, it essential to know your local and state laws concerning breaking leases because they are not always the same from state to state. Generally speaking, a tenant is bound to the duration of the lease unless the landlord breaks the law or violates the terms of the lease. However, some states will allow early lease terminations in the case of health problems or job relocation, and federal law allows tenants entering active military service to break their leases, as well.

Otherwise, a tenant who breaks a lease should be required to pay the remaining rent according to the lease’s terms. It is, after all, a legally-binding document, so without a reasonable cause, that lease stays intact.

What is Probable Cause for Early Lease Termination?

However, there are reasons that either a landlord or a tenant could terminate a lease early.

When Landlords Can Terminate a Lease Early

The most common reasons for a landlord to break a lease early include:

  1. The tenant fails to pay his or her rent on time.
  2. The tenant violates a no-pet policy.
  3. The tenant substantially damages the property.
  4. The tenant participates in illegal activities while living there.

When any of these things happens, a landlord must send a letter notifying the tenant the lease is being terminated, and state laws determine how this notice must be delivered. Again, knowing the laws about this process in your state is imperative.

When Tenants Can Terminate a Lease Early

There also are times when a tenant legally can break their lease early without penalty, including:

  1. The landlord fails to maintain fit and habitable premises. This could mean a failure to keep running water or perform necessary repairs, among other things.
  2. The landlord enters an apartment illegally.
  3. Many states allow victims of domestic abuse to terminate their leases early.
  4. The tenant is leaving for active military duty.

Here at Insurance by Castle, we want to help tenants and landlords have the best relationship possible, but for those landlords dealing with a potential early termination of a lease, this information should help inform reasonable decision-making throughout the process, even if it isn’t an especially easy or pleasant process to undertake.