Landlords and tenants in Santa Rosa sign a lease agreement so that both parties understand exactly how long the residency will last. Typically, a lease is for a one-year period. Sometimes, it’s longer and in rare situations, it might be shorter. There’s always a start date and an end date and you expect your tenants to stay in place and continue paying rent for the entire lease term.
When tenants do not fulfill the term of the lease and they move out early, they’re breaking the lease.
What does this mean for you, and how can you handle it?
First, don’t panic. It’s not the news you want to hear, and lease breaks are rare. But, they do happen and sometimes they’re even justified.
A lease break can be handled professionally and with minimal loss or disruption to either the landlord or the tenant.
Let’s talk about how to hold tenants accountable for the consequences that come with a lease break and what you can do to make the situation a bit better for everyone involved. As you might expect, California’s rental laws have a few things to say about when a tenant might be permitted to break a lease.
Steps to Take When a Lease is Broken with Cause
Your lease agreement will likely include all the penalties and potential consequences for a broken lease.
However, California state law allows for certain situations where a tenant can legally leave without being penalized. In this case, the steps you take will simply be to accept your tenant’s notice and to begin making plans for a smooth transition. You’ll want to move your tenant out of the property, take care of any cleaning or turnover work that needs to be done, and immediately begin looking for a new tenant.
Here are the reasons that your tenant can legally break a lease in California.
- There’s an Early Termination Clause in your Lease Agreement
Your lease agreement might actually allow for a lease break.
Some leases will include an early termination clause, which usually requires tenants to pay a penalty or a fee. It might be a flat fee or the equivalent of one month’s rent. Tenants might use this clause to leave early because of a job change, a job loss, a divorce, an illness, or a change in life circumstances that makes it impossible for them to stay in their home and continue paying rent. In this case, you’ll want to hold your tenant accountable to the requirements of the early termination clause. There may be a notice period that needs to be fulfilled as well as a penalty for leaving that needs to be paid.
Don’t use the security deposit to cover that early termination fee. You may get inside the property and find that there’s damage that needs to be paid for out of the deposit. You don’t want to deplete those funds.
- Your Tenant is Deploying for Military Duty
Federal law allows tenants to break the lease early and without penalty if they enter active military service while their lease is still in effect. They have their own steps in order to manage this process, which includes informing you in writing of their need to end the tenancy because of military service. Once that notice has been sent to you, the lease terminates 30 days after the next rental payment is due.
This law covers tenants who are serving in the U.S. Armed Forces, National Guard, the Public Health Service, and other government service groups and agencies.
- Domestic Violence and Other Crimes
California will allow victims of crimes such as domestic violence and sexual assault to break their lease and move out of the property early. They need to demonstrate that staying in the property they’re renting puts their safety at risk. They can also break the lease and move out if their immediate family members have been victims of these crimes or are in danger of becoming victims.
It’s hard to push back about this one. You don’t want to be held liable for a tenant being hurt because you wouldn’t let them out of the lease. When your tenant sends you a signed termination of lease letter with this stated reason, you cannot legally collect damages or sue them for a broken lease. Do what you can to facilitate an easy move-out process.
- Habitability Issues at Your Property
Habitability is an important requirement for landlords and rental property owners. If your rental home is not habitable, your tenants can break the lease early and move out immediately.
What does an uninhabitable property look like?
- Lack of running water.
- Lack of basic utilities like access to electricity.
- Pests or rodent infestations go untreated.
- Leaking roofs.
- Missing smoke detectors.
- Doors and windows that do not lock or open and close reliably.
If your tenant is breaking the lease early for one of these reasons, you’ll want to work with your tenants to establish a move-out date and then work quickly to get the home ready for your next renters.
Steps to Take for Lease Breaks with No Cause
Maybe your tenant is breaking the lease for a reason that is not lawfully permitted.
When this is the case, your job is to hold the tenant accountable to the lease agreement but also to work quickly to get a new tenant placed so that neither party loses too much money while the home is unoccupied.
Here are the steps we recommend.
- Communicate Openly with Your Tenants
When you learn that a tenant is going to break the lease and move out early, you need to keep the lines of communication open.
Talk to your tenant about the details of their move so you know how long they expect to be in the property and what they’re willing to do in terms of showings, cleaning, and maintenance. You’ll want a quick turnaround, and your tenants will, too.
Don’t take lease breaks personally. A lot of landlords become nervous and maybe even angry when a tenant notifies them that they’re moving out before the end of the lease term. That’s understandable, but try to remain professional and respectful. This happens, and as long as you work quickly to replace the departing tenant, you don’t necessarily have to lose much money.
- Explain the Tenant’s Financial Obligations
Typically, when tenants break a lease early, they are required to continue paying the remaining rent for the lease period until the term ends. For a tenant who is leaving one or two months before the end of the lease term, this may be a penalty that’s worth paying. However, residents who are only halfway through their lease term may find these financial responsibilities difficult to meet.
Your departing tenant will certainly want to minimize what they owe you, and they’ll be willing to work with you to get a new tenant placed quickly. This is to the benefit of everyone involved.
Explain to your tenants that they can save themselves and you some money by ensuring the home is available to show prospective new tenants. This will help get it rented faster. Work together as best you can with your tenants who need to move.
- Reduce Your Vacancy
Your priority is to fill the vacancy with a qualified tenant as soon as possible.
It’s important to find a new tenant quickly. Price your property competitively and begin marketing the home as soon as you receive notice from your departing tenant.
The Santa Rosa rental market is favorable to landlords right now, and you should not have trouble finding a new tenant if your current resident breaks the lease. That lets your departing tenant off the hook pretty quickly and it also means that you’re not at risk for long vacancies and disrupted rent.
Give your tenants the opportunity to suggest a new tenant who can take their place until the end of the lease so you don’t have a vacancy. If someone takes over the current tenant’s lease, you can still collect the same rental amount until that lease period ends. Your tenant might have someone in mind already, or maybe together you can advertise for a resident who is interested in finishing out the lease term.
Ideally, you’ll find a new long-term tenant who can move in without delay. Get your marketing plans in place right away and make sure there are only a few days of turnover between the time your current tenant leaves and a new tenant moves in.
We don’t recommend that you let a tenant off the hook completely when a lease is broken, but if it’s a good tenant, be accommodating. When a new tenant is quickly found and there aren’t many vacancies between the two tenants, you will end up okay.
However, if the vacancy drags on and you have trouble finding a qualified tenant, you’re within your rights to bill the former tenant for rent.
Much of this will depend on your relationship with your tenant and the systems you have in place to get the property rented quickly.
Working with a Santa Rosa property management company can help you avoid the risk and the expense of a lease break. If you’d like to hear more, please contact us at Prestige Real Estate & Property Management. We manage homes in Sonoma County, including Santa Rosa, Windsor, Sebastopol, Petaluma, and Rohnert Park.