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Lease Agreement

When Should You Let Tenants Break Their Lease?

Jul 06, 2020 by Aly J. Yale

Losing a tenant early is never ideal. It means a surprise vacancy, and it forces you to market the property, screen new renters, and basically start from square one all over again.

No thanks, right?

Unfortunately, you can't force a tenant to stay in the home. And in some cases, you might not even get to charge them for the broken lease, either.

Three times you may need to let tenants break their lease

There are three situations in which you'll probably need to let your tenant off the hook. The first is if your tenant is in the military. Service members can be called away or transferred to a new station with very little notice. When this happens, federal law allows the tenant to break their lease without penalty.

You also may need to let a tenant go if they have a job change -- either a transfer or the loss of a job entirely. These are situations out of the renter's control, and trying to force them to keep paying rent -- especially if they've lost their source of income -- probably won't be successful anyway.

Finally, if your renter is dealing with some sort of threat to their safety -- a stalker, some sort of abuse, etc., then letting them break their lease is probably necessary, too.

Other attempts to break the lease

If a tenant asks to break their lease for a reason not listed above, then you have a choice to make.

You can:

  1. Charge them to break the lease: You should have this penalty spelled out in your lease agreement. It might be a flat fee, the remaining months' rent, or some combination of both. You can also keep their security deposit.
  2. Ask them to sublet or do a lease assignment: This would force them to find a new tenant (one you approve, of course) and then collect the rent and pass it on to you. It keeps you from having to market the home and find tenants, and it ensures you have steady rent coming in for the remainder of the lease term.
  3. Find a new renter yourself: Your last option is to just find a new renter -- and fast. If you go this route, you can't charge the old tenant for months when a new renter is occupying the property. (That's called double rent, and it's illegal.)

At the end of the day, a broken lease can be expensive -- especially if you don't have a plan of action in place. Make sure you address early terminations in your lease agreement (as well as any penalties or consequences for them), and consider speaking to a local real estate attorney. They can fill you in on your area's tenant laws and help you weigh your options.

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