A few months after a new tenant has signed on the dotted line agreeing to pay the rent in a timely manner for the next 12 months, they unexpectedly want to move out. No matter why this may be, every tenant who does this strongly believes that they have a good reason to break a lease. They think it will be an easy process. Just give the landlord a call, let them know what the situation is, and they’ll hear, “No problem! Just drop off your keys, and I’ll rent it to someone else!” In reality, even if you are sympathetic to the situation, it is a frustrating process for you, the landlord. What the tenant does not usually realize, is that they are causing you to be in a very inconvenient situation. While some leases have clauses allowing the tenant to break the lease, most do not. Let’s take a look at some of the reasons why a tenant may wish to vacate the property sooner than expected and how to handle them, as well as the costs associated when the lease is broken.
Active Military Duty
This is one of the few times when a tenant is able to break a lease without penalty. Active duty military members are covered by the Servicemembers Civil Relief Act. However, they must handle it in the proper way. Should a service member receive a change of station orders during the course of his or her lease to relocate for a period of at least 90 days, they must notify the landlord in writing at least 30 days prior to vacating the rental unit. They also need to provide the landlord with proof that they have been relocated, such as a copy of the change of station orders or military deployment.
The Tenant Unexpectedly Becomes Unemployed
It may be that when the tenant signed the lease, they had a stable job making sufficient income to cover the amount of the rent. Then, without warning, the unexpected happens, and the tenant suddenly loses their job. They contact the landlord and say that they need to break the lease early because they can no longer afford to pay the rent. In this case, the landlord is protected unless there is a provision in the lease that allows a tenant to break a lease due to financial hardship. The chance of having such a provision in the lease is unlikely. The landlord needs to gently explain to the tenant that while he or she sympathizes with the situation, a lease is, in fact, a legally binding contract and that the tenant is still responsible for paying the rent in a timely manner.
A sudden job transfer is a common reason why tenants may wish to break a lease. Should this happen, the landlord again is not obligated to release the tenant from their rental agreement. They can explain that the tenant must pay the remainder of the lease.
The Tenant Has Found Another Home
The tenant may come to you and tell you that they found a different rental unit to live in, or that they purchased a home and, as a result, need to break the lease. In this case, the landlord is under no obligation to agree to let the tenant out of their rental unit without penalty.
Costs To Break A Lease
Breaking a lease puts a landlord in a difficult situation. Suddenly, they are facing advertising costs, dealing with lost rent, and repairing any physical damage that has been done to the rental unit. Most states, however, regarding the landlord’s duty to mitigate damage. Should a tenant vacate the rental property before the end of the agreed upon amount of time, the landlord may hold the tenant responsible for the costs of advertising and showing the unit to other prospective renters. The landlord may also be required to take reasonable steps to rent the property to someone else. This means advertising the way they normally do, offering a monthly rate that they would have offered otherwise, and appropriately screening tenants before they sign a lease. The landlord is by no means obligated to put the vacated unit at the top of the list of units to rent, offer it for a discounted rate, or rent it to unqualified tenants just because the previous resident broke the lease.
The Landlord May Still Hold The Tenant Responsible
Even if a tenant has vacated the property and the landlord has taken proper steps to mitigate damages, the tenant can still be held responsible for breaking the lease early. This can mean that the landlord is not obligated to return the security deposit, or legal action can be taken to collect any unpaid rent. In most cases, when a tenant breaks a lease and does not pay the remaining month’s rental fees, it is reported to a credit agency.
How To Prevent A Tenant From Breaking A Lease Early
While a landlord cannot predict what will happen in the tenant’s personal life – such as job loss, desire to live somewhere else, or any other situation – he or she can be proactive. Before the tenant signs the lease, remind them that it is a legally binding document. Many renters do not realize the consequences of breaking a lease. They may think that there is nothing that the landlord can do, and they certainly don’t realize the inconvenience it places on them.
Include A Buy-Out Fee
A landlord can protect their own interests by including a lease buy-out fee in the rental agreement. This requires a tenant to give 60 days notice in writing and also to pay an amount additional to two months’ rent. The money is usually due upon notice, and the 60 day period begins when the fee has been paid and an exact move-out date has been provided. This helps prevent tenants from breaking a lease for frivolous reasons.
The landlord always has the option to be sympathetic to the tenant’s situation! In extreme cases, landlords may want to agree to end the lease early without penalty. This may be the right choice for cases such as job loss, transfer, illness, or any other reason that the landlord sees as valid. If a landlord is willing to allow a tenant to break a lease, it may be advised that they carefully consider each situation on an individual basis, as well as ask for any documentation that the renter can provide. This helps prevent the landlord from getting a reputation as someone who allows renters to break a lease for any reason without penalty.