As owners of rental property, we all dread the unexpected call from a resident requesting to break the lease. What is your plan if this happens? As a landlord, sometimes you will find yourself in a situation where your resident wants to move out before the lease ends. It is important that you know how to handle these situations to make sure you don’t get into any legal trouble and follow the correct protocol.
Most likely an unexpected event has happened to your resident and they need to move out. These unexpected events could range from personal, such as health issues or divorce, or professional, such as a job relocation or loss of a job. A lease agreement is a legally binding written contract which typically guarantees the occupancy of the resident for a certain period of time, typically one year. When the fixed amount of time (the “term” of the lease) is over, the lease ends. It is important to have a detailed lease which clearly states what will happen if your resident breaks the terms of the lease, specifically lease breakage fees, locksmith charge, deposit refund, etc. The lease should be free of loopholes and reviewed by legal counsel to protect you.
A lease agreement will protect you as a landlord but there are also laws that protect the resident. Depending on the resident’s reason, you may be legally bound to release the resident. So the first thing to do is to find out the reason your resident wants to move out.
Legally Justifiable Reasons:
Military or Active Duty: If your resident is called for military or active duty, then the Federal law allows people in the military to break their lease to start active military duty or to be transferred to another post within the military. The law applies to people in the armed forces, the activated National Guard, the National Oceanic, and Atmospheric Administration, and the U.S. Public Health Service. They still need to give a 30-day notice.
Domestic Violence: This depends on what state you reside but some in some states the landlord-resident laws allows survivors of domestic violence, sexual assault or stalking to break a lease and move if necessary.
Unlivable housing: If you have failed as a landlord and your property is no longer habitable, then the resident can legally break the lease. The legal term is called: constructive eviction. As a landlord you are required to keep rental premises livable—this is called implied warranty of habitability.
Just a few helpful tidbits to help you through this process:
- Open communication between you and the resident at this point is of utmost importance.
- Any agreements made with residents outside of the lease need to be put in writing and signed by both landlord and resident.
- For most other reasons other than those listed above, the resident is responsible for the remainder of the lease, although you, as an owner, have the responsibility to re-rent the property as quickly as possible.