The majority of tenants who rent single-family homes are planning to stay awhile. For most, a long-term lease fits into their plans very well. But life can also be unpredictable, causing some tenants to break their lease early. Job relocations, buying a home, changing familial status, and military duty are common reasons a tenant may ask for to break a lease. When this happens, it’s critical to appreciate how to handle the situation both legally and professionally.
Know and Follow the Law
A signed lease is a legally binding contract. But any agreement between you and your tenant is also subject to state landlord-tenant laws and other federal laws. These laws assign rights and responsibilities to both you and your tenant. For example, most require Bartlett property managers to make sure a rental is in habitable condition and give notice to the tenant before entering the property.
In some states, failing to follow landlord-entry regulations or otherwise respect your tenant’s privacy is considered enough grounds for a tenant to break a lease legally. Other legal reasons a tenant may break a lease include active military duty, domestic violence, or if the home becomes uninhabitable.
Lease Termination Clause
While not required, a good practice for any landlord is to include an early lease termination clause in your lease documents. This clause should clearly explain how a tenant may break their lease. For example, some of the most common requirements are providing a certain amount of advance notice (typically 30 days) and paying an early termination fee, usually equal to two months’ rent.
Having a clause in your lease documents gives your tenant a way out, if needed, and ensures that you do not experience financial hardship as a consequence of the broken lease.
After a Tenant Breaks a Lease
Unfortunately, not all tenants will meet all of the lease terms. Some may pack up and leave. No matter how your tenant chooses to terminate their lease, it’s important to maintain professional interactions with them. Once a tenant breaks their lease, you’ll need to take immediate action to document the situation and try to collect any rent or fees owed.
If possible, ask the tenant if you can inspect the property before move-out. This can help you determine what repairs the tenant may be liable for and what you’ll need to do to get the property ready for a new tenant. Just as you would for any tenant, calculate the amount of unpaid rent and the cost of repairs and deduct it from the tenant’s security deposit. Be sure to document everything!
Also, send your tenant a written reminder explaining their legal obligations under the terms of your lease agreement and what will happen if they don’t fulfill them. The best thing to do is to send this notice by certified mail to create a paper trail of your actions.
If your tenant does not pay the amount owed to you, you may need to file a civil lawsuit with your local court to enable you to collect your rent payment and fees. If that happens, you’ll need to be able to show the court that you have acted legally and in good faith throughout the process, including all actions you took to re-rent the property.
While your tenant may help bring in applicants, it is the landlord’s responsibility to minimize financial damages by finding a new tenant as quickly as possible.
When a tenant breaks a lease, the most important thing you can do is follow the law and your lease terms. While an unexpected move-out will never be ideal, you can make the process as pleasant as possible by handling it professionally. One of the best ways to ensure that your rental business is conducted professionally and in full compliance with applicable laws is to hire a quality property management company to do it for you.
At Real Property Management Investor’s Choice, we work on your behalf to cultivate good tenant relations and handle any unexpected changes. Contact us online to learn more about this and the other quality services we provide.
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