Dealing with a Tenant Breaking a Lease: What to Know

By Alicia Geigel on April 10, 2020

In the world of renting, there are many circumstances where things do not go as planned. As a landlord or property manager, you constantly have to prepare yourself for situations that can go awry. Problem tenants, maintenance issues, and lease breaks can all contribute to stress or anxiety in property managers/landlords. Breaking a lease, in particular, is something that you have to be prepared for, but don’t necessarily want to ever anticipate. Though you may feel that you don’t have much control in a situation like when a tenant breaks a lease, there are several ways to handle it and come to a reasonable agreement with your tenant.

As a landlord or property manager, you never want to anticipate a bad situation with your tenants or them wanting to break a lease early. Despite this, these circumstances do arise, which means you want to be as prepared as possible and know your rights as the landlord/property manager. Did you recently find yourself in a situation where a tenant of yours has broken a lease? Unsure of how to go about the situation? Want to make the process as amicable as possible? Here’s all you need to know about overseeing a tenant breaking a lease.

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Understand Different Reasons Why the Lease is Broken: Tenants are just like everyone else, their lives are not perfect. There are many reasons why your tenant might want to break their lease, including financial insecurity, familial issues, job scarcity, domestic violence, military duty or perhaps a positive reason like a job opportunity. Whatever the reason is, you want to be understanding of their situation, especially if it is not a good one. Additionally, you should look into if there are any laws or policies that could help the tenant if they are in a bad situation, for example, some states allow domestic violence victims to break the lease without penalty. Look over your state’s laws regarding certain tenant protections when breaking a lease.

Review Lease with Tenant: When your tenant comes to you with intentions of breaking their lease, it is important to review the lease with them to determine if there is an early termination clause. Erin Eberlin of The Balance writes that “this clause allows a tenant to terminate the lease early if they follow the early termination rules. The tenant will have to give proper written notice and pay a fee.” In this case, they will have to give a proper written notice (generally 30 to 60 days before move out) and pay an early termination fee (typically two months rent, give or take).

Evaluate the Costs: A lease break by a tenant can be a costly situation, so it is important to go over the costs of breaking the lease early with your tenant so they have a clear understanding of what it will take. Most times, there is no specific cost for breaking a lease, as it depends on local laws, the lease agreement, and the landlord/property manager’s discretion. Different costs can include an early termination fee, rent for the remaining months of the lease plus a security deposit, rent until the landlord finds a new tenant, or potential court costs depending on the situation. The tenant paying these costs, again, relies on your agreement, discretion, and local laws.

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Get it in Writing: In any kind of situation, especially in renting/real estate, you want to get an agreement/notice in writing. When your tenant wants to break their lease, getting this in writing can help to cover you in the case that they want to go to court. Tyler Nicely of Zillow notes, “Regardless of whether a tenant has a good reason for breaking a lease, ask them to provide a written request to terminate early, detailing their reasons for leaving. Explain to your tenant the course of action for ending the lease early as required by your rental agreement.”

Move on, Prepare Property for Next Tenant: As a landlord/property manager, you can stop your business when you are stressed and overwhelmed. Instead, you have to pick yourself up and keep going. After the lease is broken and you are done dealing with the tenant, move on and prepare your property for your new, potential tenant. Clean up, fix any maintenance issues, and advertise the listing on different sites. This will help you have a positive mindset and keep you looking forward!

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When you are a landlord or property manager, there are always things that do not go as planned. Even though you don’t want to see a tenant break their lease early, these situations do arise and you have to be prepared for them. Remember to have compassion but also recognize your rights as a property manager to help you effectively manage the problem.

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