Prepare For A Tenant's Request To Break Their Lease

You can bet on it!  Tenants will have life changing events that will cause them to request to break their lease.  As a landlord, you should be prepared with a response.  Assuming your lease is well written, you likely have the option to tell a tenant they are obligated to the end of the lease.  Or, if you want to provide a path to break their lease you should plan a program that can be offered.

Reasons To Allow A Tenant To Break Their Lease

An experienced landlord realizes that tenants will incur life changing events.  If not provided an option ultimately they will break their lease with or without the agreement of the landlord.  So, it makes sense to know how to respond to the inevitable request with a plan that can work for all parties.

Should A Lease Breakage Offer Be In The Lease?

We have seen detailed lease breakage offers in the language of leases.  In our opinion, there should not be a written plan offered in your lease that allows for its breakage.  Each situation is different and the landlord should have the opportunity to consider all the circumstances in order to offer the best solution.

What Should Be Considered In A Lease Breakage Solution?

There are several important considerations before offering a tenant the opportunity to break their lease.

  • Cost- what will it cost to market the property and locate a new tenant?
  • Rent- will the tenant continue to pay rent which likely means marketing the home while occupied.
  • Maintenance- who will pay for maintenance if the home becomes vacant?
  • Time- how long do you expect it will take to rent the home?

Our Preferred Solution

We utilize all of the above considerations to create an offer to allow a tenant to break their lease.

Typically:

  • The tenant will be required to pay the rent through the date we are able to start a new lease.
  • The tenant is also required to maintain the home and utilities per the terms of the lease until we are able to start a new lease.
  • Finally, we do not want this event to cost the owner any money.  So a non-refundable lease breakage fee is required to be paid as part of the agreement.

The amount of the lease breakage fee compensates for the costs associated with finding a new tenant.  These are costs the owner was not planning to pay prior to the end of the lease.  They become the responsibility of the tenant who requests to break their lease.

Final Word- Plan!

Be sure you have a plan in place before a tenant asks to break their lease.  Remember, one size does not fit all.  If you consider the above factors in your plan you can be protected while accommodating the unexpected needs of your tenant.

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WILMOTH Group is headquartered in Indianapolis and Fort Myers, Fla. WILMOTH Group focuses on providing creative local solutions for a variety of residential real estate needs including, properties for sale, property management services in Indianapolis, and short-term management services in Tampa and Fort Myers.

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