WHEN TENANTS WANT TO BREAK THE LEASE EARLY

What are you supposed to do if your tenant wants to break the lease early? They signed a legal document that binds them to the terms, including to pay rent through the move-out date you, the landlord, specified. Regardless, as much as the lease protects the landlord, there are laws are in place to protect tenants if and when they want out. As a property management company, it’s important to know how to handle these situations to make sure a property manager can communicate clearly and fairly, follow legal protocol, and ultimately, resolve the conflict.

Tenants want to break their leases for a variety of reasons—personal, professional, or due to extraneous circumstances. Depending on the reason, the property manager might be legally bound to release the tenant without damages, assuming the tenant follows proper protocols and procedures. In special situations where the tenants are reasonable and respectful, it makes sense to be compassionate and work with the tenant to find a solution.

Once a tenant sends in a formal early termination of lease letter and plans to vacate the unit prior to the end of the previously agreed upon lease, in most states property managers have the right to search for a new tenant in order to “mitigate damages”. In the eyes of the law, it is illegal to hold the tenant to the terms of the lease and collect rent while the unit remains vacant through the end of the lease.

Even if your tenant decided to end the lease at an inconvenient time, you must make a concerted effort to re-rent the unit. You might have to go back to square one when it comes to finding new tenants again, including marketing, unit showings, and so on. However, it is not necessary to rent out to the first prospective tenants who show interest in the property. You still should follow proper protocols and procedures when screening folks and not let time spent on this dictate your next tenant.

Part of the reason to be patient in your search is because your previous tenant is still responsible for paying rent until the vacancy has been filled. In select states you can hold the original tenant liable for all of rent through the end of the lease eliminating any potential time crunch concerns. Do note however, once you fill the unit, your previous tenant is off the hook financially assuming no interior or exterior damage to the property itself. Collecting double rent payments on the same unit is downright illegal and has no place whatsoever in property management. 

Your relationship with your tenants and reputation as a property manager matters just as much as the need to profit. You can’t force tenants to stay, but you can remind them of their obligations on the lease and continue to hold them financially responsible until you find the perfect replacement tenants. A rock-solid lease with professional language inserted in the terms will provide transparency and make sure you’re compensated when tenants want to leave early. Always remember that if you let one tenant break their lease and not another, you run the risk of discrimination and issues associated to that. It’s always recommended to have policies in place that are applicable to all tenants.