Terminating a Lease of Rental Property & Related Legal Rights and Obligations
A lease is a contract that binds two or more parties to the terms of the agreement. Sometimes, after signing a rental agreement or lease, a tenant may need to vacate the rental unit early for a variety of reasons. Likewise, the landlord may terminate the lease under certain circumstances. It is important to abide by state laws, as well as specifications within the lease, for providing notice of intent to terminate a lease.
Tenant Termination of Lease
Since a lease is a contract, tenants are bound to the length of the lease. This means that they are responsible for paying rent during the lease period. Exceptions to this rule exist, particularly if the landlord breaks or violates the lease. Some states provide explicit reasons for tenants to break their leases, including a call to military service or domestic violence concerns.
If a landlord is violating terms of the lease, especially health and safety codes, the tenant may be able to move out without giving notice, or giving less notice than typically required. Legally, this is termed “constructive eviction,” meaning that since the rental premises are unlivable, the tenant is effectively evicted from the property. This may also be the case if a natural disaster, or significant damage to the rental unit, prevents the tenant from remaining in the rental property. However, if the tenant breaks a lease without a legally protected reason, the landlord may sue for damages.
When There Is No Landlord Violation
A tenant may be able to move out early even when their landlord has not violated the lease if:
1They negotiate with their landlord to mutually terminate the lease
2They find a new tenant willing to sign a new lease, and their landlord agrees
4A particular law gives them the right to leave early, such as a law for military members or people experiencing domestic violence
Landlord’s Duty to Mitigate Damages
The landlord has a duty to mitigate, or to use reasonable efforts to re-rent the rental unit after a tenant has broken the lease. Generally, reasonable efforts are what a reasonable person would do under similar circumstances. It probably would be unreasonable, for example, for a landlord to let the property sit vacant for three years and then sue the old tenant for the rent during this period of time.
The duty to mitigate may prove challenging for the landlord, since the inconvenience of re-renting arises from the tenant’s decision to terminate the lease prematurely. In the landlord’s favor, actual costs for advertising the unit can be charged to the vacating tenant. And some leases include a termination fee, or a specific forfeiture of the tenant’s security deposit if the lease is broken.
Security Deposit Issues
Typically, landlords have from two weeks to one month to return a tenant’s security deposit after the tenant moves out of the rental premises. Landlords may deduct from the tenant’s security deposit for valid reasons, and according to the proper method. Deductions should be presented in a written document and itemized, and payment should be returned for any deposit balance. It is important to follow up with the landlord if the deductions seem improper. Any agreement reached should be documented in writing.
Landlord Termination of Lease
A landlord may legally terminate a lease if the tenant is in violation of the terms of the lease or has broken the law. The violation by the tenant must be significant, such as late rent, or having a dog despite a prohibition against pets in the premises. Violations of the law, such as selling drugs on the premises, justify a landlord’s termination of the lease.
The landlord must first send a termination notice to the tenant, making clear that the tenancy has been terminated. Terms of the notice vary according to state law, as do the requirements on delivery of the notice. The tenant may be provided time to remedy the violation, by paying outstanding rent, for example. Or the notice may state that the tenant must vacate the premises or risk eviction.
A landlord may file an eviction lawsuit against a tenant who remains in the rental unit after receiving a termination notice. An eviction is a court-ordered removal of the tenant. The landlord typically files a complaint with the court, the tenant is provided time to answer, and if the landlord prevails in court, it repossesses the property.
Terminating Rental Agreements
Landlords and tenants are typically free to terminate month-to-month tenancies by simply providing written notice 30 days in advance. Check state and local laws and the rental agreement itself to determine the precise procedures.