In the situation that a tenant wants to end their lease early, not only can it create a potential loss of income for you, the property owner, but it also requires that you go through the hassle of finding a new tenant as quickly as possible. Luckily, the terms of the lease usually give landlords some protection against loss in these situations. When a tenant signs a lease, they commit to paying rent until the expiration. However, some situations can call for exceptions. Here is an overview of what to do if a tenant wants to end their lease early.

Depending on the terms of the lease, a tenant is usually obligated to pay the full amount of rent for the lease period. In legal terms, this usually means the tenant is required to pay rent until you are able to find another tenant. A lease agreement can, however, contain an early termination of lease clause that allows the tenant to pay a termination fee to break the lease early; this is usually two months’ rent. While this can be a convenient solution for both parties, if you take longer than two months to find a new tenant, you may start to lose profit.

You or your property manager is also generally required to search for a new tenant once you have received a termination of lease notice. In legal terms, you shouldn’t hold a tenant to the terms of the lease (charge them rent) after they have moved out if you are not making a genuine effort to find a new tenant.

The best approach for both you and the tenant is to negotiate a solution that suits both of your needs. You can, for example, negotiate a buy-out clause that means you are paid a certain amount to terminate the lease. Note that you are not usually required to have an early termination lease clause for such an agreement to be struck.

Sometimes the tenant may offer to find someone to sublet the property for the remainder of the lease period. This is generally not a good idea unless the proposed tenant is subject to the same screening process the landlord applies. You should be in control of the letting process and shouldn’t allow the tenant to make commitments to a subletting tenant.

In some situations, a property manager may be legally required to allow a tenant to end their lease without having to pay a penalty or the remaining rent owing for the lease period. This can include the tenant losing his job, being subject to a military transfer, the property being uninhabitable, or the property manager otherwise not meeting their obligations under the terms of the lease.

Whatever the situation, it is always best to negotiate a settlement that suits both you and the tenant (and that satisfies their respective legal obligations) when a lease is terminated early.

Situations such as this can be difficult to navigate on your own, and that is why Specialized Property Management Birmingham is here to help! We will help you create a lease that will be beneficial to both you and your tenants. We will also screen any prospective tenants when the need arises. We’ve got you covered! Contact us online or call us for a quote.

Contact us today for a quote! Click here for a comprehensive list of all of our Birmingham property management services! Contact your Specialized Property Management Birmingham team today at  (205) 417-1475