Help, My Tenant Wants to Break the Lease!

It was just a few months ago a 1 year lease agreement was secured filling your vacancy.  The prospective applicants at the time met all the rental criteria and seemed like the perfect fit for the property.

The tenants have occupied the property and the rent is being paid in a timely fashion, everything appears to be moving along smoothly until you receive notice that for some unforeseen circumstance the tenants need to relocate and consequently want to break the lease agreement.

The majority of property managers who have had the opportunity to prepare, execute, and negotiate lease agreements will admit that this scenario happens on a regular basis to the best of tenants.  Whether it is one month, six months or a one-year lease agreement, it is important to understand that the lease agreement; terms agreed upon, and signed by both parties constitute a legally binding contract that when breached can carry monetary and legal consequences.

With that said, the situation doesn’t have to end poorly and can be mitigated to the benefit of both parties.  The first thing you should do is review the terms of the lease agreement.  Some lease agreements have an existing opt-out clause that will allow for an early release in exchange for an agreed-upon fee.  If the lease does contain an opt-out clause then communicate with your tenant the availability of this option and if it’s financially feasible for the tenant move toward a mutually closure.

If not, then I suggest contacting the tenants and discussing the situation openly.  I would advise on using an approach that conveys your existing knowledge of the lease terms and their obligations to fulfill those terms legally.  However, I would also advise to communicate your willingness to work with them on a solution that benefits both parties with emphasis on minimizing the potential for rent losses in exchange for an early lease termination.

In a breach of the lease agreement the tenant is legally responsible for the loss of rental proceeds for the remainder of the lease agreement or until filled by the landlord, check your local laws.  With this said, it may make sense for them to assist in finding a replacement tenant to minimize or completely avoid any out of pocket expenses.    There are many things the tenant can do to assist with finding a replacement tenant such as;  market the property (Craigslist, newspaper, etc), conduct daily showings, allow easy access for potential applicants, and keep the unit spotless for showings.  If a new tenant is found and meets all of the landlords or property manager’s written rental requirements then a solution may have been found.

There is no guarantee for success when trying to work with a tenant that wants to break the lease agreement but their are options.  Know your lease agreement terms, openly communicate, and offer positive solutions for both parties moving forward.  This situation is typically a very stressful and uncomfortable time for both parties, having a plan and working toward a solution goes a long way in protecting your rental property, rental proceeds and outlook on being a landlord.

For more helpful landlord tips download my Free 27 Page eBook “How to Avoid Bad Tenants”

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Written by Salvatore Friscia, owner of San Diego Premier Property Management a full service residential property management company offering Worry Free property management to the greater San Diego area since 2004 and TenantFinder.com.