Can a Landlord Break a Lease Early Without Getting in Trouble?
When thinking about someone breaking a lease, it's often the tenant who we put blame on, and their reasons which force them to move out early. That's not always the case, though. In certain circumstances, it's the property owner serving a termination notice.
Landlords can break a lease, but only within specific circumstances. Generally, landlords can break a lease, with proper notice, if they have a good reason to do so, such as needing the property for their own use or if the tenant breaks a rule within the rental agreement. Specific laws usually cover lease termination for any reason, so you should always check with state laws to avoid a legal issue.
Reasons landlords may need to break a lease agreement
There are a variety of reasons that can lead to property owners serving an early termination notice to a tenant. This isn't the same thing as an eviction, although some reasons for breaking a lease early can overlap with those that could leave you wanting to evict a tenant.
Most landlords use one or more of these common reasons to break a lease or rental agreement:
- You want to sell the property or decide to live in it yourself.
- The tenant has violated the rental agreement or is behind paying rent.
- The tenant committed illegal activities of some kind on or near the property.
- The property is in poor condition and the necessary repairs are too expensive for you to pay for.
Breaking a lease is a difficult decision for landlords, but it's important to understand the consequences of doing so before taking any action. Most states have very specific laws dealing with breaking a lease by either a tenant or a landlord. Understanding local law first ensures the reason you're providing for breaking your lease isn't going to get you in trouble with the renter.
Adding a termination clause in your lease agreement
Even if you don't anticipate a reason for terminating a lease agreement early, it's best to include an early termination clause in your lease. That way, you're protected and expectations are clear, should you need a tenant to vacate a property before their lease is up.
A good early termination clause will follow the local law and step out the process for this situation. You need to spell out what must happen no matter who's initiating the lease termination. Include everything from how much notice you need to the way in which you present the notification. A typical notification period is between 30 and 60 days in advance of the date a tenant moves out.
Most landlords like a written notice whether they're receiving notification or giving it. If you're breaking the lease, you'll most likely want to put your written notice on the tenant's door, as well as send a digital copy. This ensures they get the message.
This clause should also specify any fees the tenant will have to pay if they're in violation of the lease terms, and what will happen to their security deposit and any prepaid rent in general.
How to terminate a lease early as a landlord
To avoid an eviction lawsuit, you must carefully follow the process you've spelled out in your existing lease and stay aligned with local laws. If you can wait for the lease term to finish out, it's always easier and less complicated. However, if you need to end a lease early on your rental property, here's what to do:
- Notify the tenant in writing of your intent to terminate a lease.
- Give the tenant a reasonable amount of time, 30-60 days, to find a new place to live.
- Recommend the tenant to another landlord or rental housing authority to help them search.
- Discuss how this impacts the tenant's security deposit and/or paying rent for the remainder of their stay.
In theory, if it's you who decides to break the lease, there are no fees the tenant must pay. That typically only happens if they contact you to move out early. There also may only be fees if the lease is a fixed term.
Additionally, all deposits made at the time you signed the lease are treated the same way even if you break the lease. You should use the security deposit to assess damages, and return it (or as much as possible) within a proper amount of time once you've set the new move-out date. The same with a last month's rent deposit. Keep it to cover whatever the new last month is rather than asking the tenant to pay rent.
What if my tenant has a month-to-month lease?
Having a tenant on a month-to-month lease definitely makes it easier to ask them to move out of a property in a shorter timeframe. A month-to-month lease only ensures the renter access to the property one month at a time. For this reason, you have the ability to ask them to move out at almost any point.
Though you must provide 30 days' notice, it's not really the same thing to terminate a lease for a month-to-month renter. They will most likely expect the notice to come from you at some point.
Once your tenant completes their first year on a lease, shifting to a month-to-month rental agreement is a good strategy in general. It makes being a landlord easier and gives you more flexibility with your property.
How does my tenant pay rent if the lease ends early?
Even if you initiate the process to terminate a lease, your tenant must pay any unpaid rent they owe you. They should also keep paying rent up until they move out. If your tenant paid last month's rent upfront, you can apply that to the new last month your tenant will be on the premises.
Local laws when breaking a lease
Many states have similar laws when it comes to either a landlord or tenant terminating a lease early. However, there are variations. These laws include how much notice you have to give, what fees can get charged and the valid reasons for taking this step.
An important factor in the process though is keeping tenants' rights in mind. Based on state laws, tenants might be able to:
- Remain in the property until a new tenant is found.
- Receive compensation for any damages caused by the landlord breaking the lease.
- File a lawsuit against the landlord.
To avoid these issues and any extra costs, you want to approach the whole process very carefully. This is especially true if you're taking this step with prospective tenants or a new buyer already in place for your property.
When you can't terminate a lease early
The only time you can really terminate a lease without any reason is at the actual end of a lease term. At that point, it's your call to not renew the lease agreement, and you don't have to provide a specific reason why. However, there are situations where you may want to terminate early, but can't. These include:
- You don't like your tenant, but they're still following all the terms of the lease and the law.
- You want to rent your property to a friend or relative who's in need now, although you have a current tenant in place.
Even if you have a good reason to terminate a lease early, you might want to start with a warning letter, giving a bad tenant the opportunity to fix their issues. This would work in instances where the tenant is late on rent or has possibly broken a term of the lease they can fix. An example is if they brought in a pet, and you don't allow them. If the tenant gets rid of the pet within your set time frame, maybe you don't terminate.
On the flip side, if you do decide to terminate a lease, and the tenant refuses to leave, you'll have to evict them, and that is a costly legal process that requires an attorney.
With so much to consider, and so many potential speed bumps, deciding to terminate a lease early is definitely not a decision to take lightly. Even if your tenant is in violation, and you're already considering eviction, maybe you can make it until the lease ends. It could be worth a try.
Deciding to terminate a lease on a rental property
As a landlord, it's not always an easy decision on what to do next with your rental property. Sometimes, something comes up and you decide to sell. Other times, you're stuck with tenants who are less than stellar, and you want to contact them to leave before having to evict them. And, finally, you may decide you want to live on the premises yourself.
With so many reasons that make it OK to break a lease early, you still have to navigate things carefully. You must maintain solid contact with tenants, and be clear on when and why they need to vacate. To keep from dealing with the law, you need to handle everything correctly which means it's not always the right decision to terminate a lease early.
Weigh the pros and cons, make sure you have a valid reason, provide proper notice and protect yourself throughout the process. Checking off all these boxes will ensure you're doing it right when asking your tenants to move out early.