If you have ever rented or been a renter, you’ve probably encountered a situation where you have to get out of your lease early or where your tenant wants to get out of the lease.
Lease agreements serve an essential role for the landlord and the tenant, providing legal protection for both parties. Early termination of lease agreement provides protection primarily for the landlord. However, if a tenant wants to leave, you certainly can’t prevent them from doing so. So, how do you honor an early termination of lease agreement and let a tenant out of the contract they have already signed?
An agreement of early termination of lease is a legally binding document or clause in your lease agreement that lays out the provisions for a tenant breaking their contract prematurely. There are many situations where you might also include language for the conditions under which a landlord can choose to break a tenant agreement prematurely.
There are many reasons why a tenant might want to terminate their lease agreement before the original agreement.
If you have an early termination of lease contract, your tenant might know that they are still financially responsible for breaking the lease prematurely. In this case, they might offer to find someone to sublet until the lease expires.
However, you should not let them do this. You should be the one who controls who lives in your rental property. You, as the property owner, shoulder the risk of the tenants who occupy your space. A tenant who prematurely leaves has next to no financial loss involved if the subletting tenant causes significant damage. Instead, you should find individuals to rent out the space for the remainder of the contract or for a new lease term, using the same interview and application processes you did originally.
When you write an early termination of lease contract yourself, include things like:
This is how much time a tenant or landlord must provide for termination. It’s common to require a minimum notice of 30 days.
List the requirements for early termination. Some landlords prefer that the early termination be sent in the mail, via email, or otherwise written out, while others accept a verbal format.
In this section, explain what the early termination fees are or how they will be calculated. You are not required, however, to define what the fee will be. You can choose to have a tenant continue paying rent until you find a qualified renter to replace them. Your state law might have a minimum obligation for tenants designed to cover situations where you forget to have an early termination of lease clause.
Here, you can explain when early termination will go into effect. Usually, this is 30 days after the notice is received.
This might be a section where receiving notice is not enough, and the tenant is still responsible for paying things like termination fees or other charges.
Please consider that this is a non-exhaustive list but just a few main things this agreement should have. You can use this example of the early termination of lease clause example and double-check with a lawyer.
Download this printable template of the early lease termination agreement to fill in all the required information.
Before you start writing an early termination of lease contract, make sure you talked to a lessor and you discussed the possibility of terminating the lease.
Agree on money-related, time-related, and other issues, the details of which need to be specified in the contract.
Download the template provided above after you negotiated all the details with another party. Make sure you will in all the blanks.
Also, please note that if you have an early termination of lease agreement letter, this is very likely to be in addition to the regular lease. Even if you don’t have a separate letter, you could have an early termination of lease agreement clause in your lease agreement.
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Frequently Asked Questions
Yes, you can use a free download example with specific language about proper notice and termination fees. The format can be a PDF or Word document. What matters most is that you are able to edit the document to specify things such as: the lease commitment, who is responsible for breaking a lease, what the rental contract is or the lease term, and the lease obligations during that time, and what local laws are in place to protect you as the tenant, if the landlord refuses.
You can choose as Property Owners or tenants to draft a separate legal document. In this legal document, you might say that the property owner will allow early termination under specific circumstances but for a specific fee or other legal repercussions. You can also choose to write the lease commitment and early termination fee as a separate section in your regular rental agreement with each tenant.
You can make your tenant pay rent for a specific length of time, such as two rent payments. You can also write language that says they have to cover unpaid rent until the lease expires or you find a new tenant for the property or rental unit, however long that takes.