Every time you sign a lease agreement, it’s with the expectation that your tenant will fulfill the terms of that lease agreement. However, things happen that are beyond your control and even beyond your tenant’s control. As a landlord, it’s inevitable that at some point, you’ll get a tenant who wants to terminate their lease early. While it’s frustrating, it’s important to handle these situations professionally and proactively. Communication will be important. Compassion, too.
As a tenant, you may be nervous about breaking your lease. You may hesitate to tell your landlord what’s going to happen. The sooner you relay this information, however, the better the entire situation will be for everyone.
We’re providing everything that landlords in Santa Rosa and tenants need to know about requesting an early lease termination. These aren’t always fun, but when you manage them professionally, they do not have to be contentious or expensive.
Where to Start for Both Tenants and Landlords: Review the Lease Agreement
The first thing you need to do is to review the lease agreement. Both tenants and landlords should have a copy of the lease that was signed. Consult it before anything else happens. The lease agreement is a legally binding contract between landlords and tenants that outlines the terms and conditions of the lease. There will be a termination clause included, and this is the logical starting point.
When a tenant wants to terminate their lease early, it’s important to understand what the lease agreement says about early termination. Some lease agreements require a certain number of days’ notice while others may require the tenant to pay a fee or forfeit their security deposit.
Review what the lease says and decide how to proceed. If you’re the tenant, make sure you’re providing enough notice. If you’re the landlord, make sure you understand your responsibilities for allowing the tenant to leave and for mitigating the expense. Tenants will ultimately be responsible for paying the rent for the remainder of the lease term, but everyone can work together to ensure the vacancy time is limited. This will save the landlord and the tenant money, time, and stress.
Communicating about Move-Out Dates and Expectations
Once all parties have reviewed the lease agreement, it’s time to discuss it. The next step is to communicate early and often. It’s important to be honest, transparent, and professional. This is not something that a landlord needs to take personally. It’s not something that a tenant needs to feel defensive about. It’s happening, and if everyone is willing to communicate with one another, it will be a lot less difficult to manage.
We recommend putting as much information in writing as possible, but in this situation, a personal conversation is often necessary. Schedule a meeting or a phone call to discuss the tenant’s need to terminate the lease early. This will help landlords to understand the situation better and it will help tenants to understand what their responsibilities are as they prepare to move out.
It’s also a good opportunity to address any concerns that either party may have.
Consider the Financial Impacts of Early Lease Termination
It cannot be avoided; there are financial consequences to lease terminations.
Early lease termination can have financial implications for both landlords and tenants. As we have discussed, this will largely depend on the lease agreement. Typically, tenants will need to pay a termination fee or forfeit their security deposit. Landlords will no doubt consider the financial impact on the consistency of their rental income, as you will want to quickly find a new tenant to replace the one who is leaving early.
Some tenants will have the right to terminate the lease agreement without financial penalties. Military members who receive PCS orders, for example, or victims of domestic violence. If a situation such as this applies, make sure you follow all of the applicable California rental laws.
If there is a habitability issue at the property, tenants have the right to terminate their lease.
Working Together to Reduce Vacancy
The priority of both tenants and landlords is to fill the vacancy with a qualified new tenant as soon as possible. This will ensure that the departing tenant doesn’t have extra financial exposure and the landlord doesn’t have to worry about an extended vacancy.
What can landlords do?
- Price the property competitively. This will attract a strong pool of potential renters.
- Market the home as soon as notice is received that your tenant will be moving out early.
What can tenants do?
- Keep the property clean and attractive for showings.
- Be accommodating when someone is coming to see the home.
- Make a referral if there’s someone who would make a good tenant.
The Santa Rosa rental market is pretty strong right now, and it should not be too difficult to find a tenant who can fulfill the remainder of the lease term. Ideally, a new tenant will be able to move in almost immediately after the current tenant leaves. Allow a few days for cleaning and minor wear and tear touch-ups.
What Santa Rosa Landlords Must Do
Here’s an easily digestible checklist for landlords who have a tenant requesting an end to the lease. You want to be accommodating, especially to good tenants, but still protective of your income and your property.
- Talk to your tenant about their move-out date and their willingness to help you show the property to new prospective tenants.
- Ask if they know anyone who might want to take over the lease and move in until the lease term ends.
- Evaluate the current market and establish a rental rate that fits the Santa Rosa rental market.
- List your property for rent right away, and in addition to the usual rental websites, share the opening on social media as well.
- Avoid using the security deposit to cover that early termination fee that might be included in your lease agreement. This is likely to be a flat fee or the equivalent of one month’s rent. You’ll need the security deposit, however; what if you 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 give up those funds.
- Work with your tenant to coordinate showings, and ultimately the move-out.
What Santa Rosa Tenants Must Do
And here is a quick checklist for tenants who might need to break a lease. Hopefully, you have a good relationship with your landlord and you’ll be comfortable discussing the best case scenarios for a smooth move-out.
- Make sure a lease break is the only way. Breaking your lease is expensive and inconvenient to both you and your landlord. You’ll want to be comfortable that this is the best option for you. If it’s a money issue, can you work out a payment plan? Can you look for a roommate?
- Communicate with your landlord as soon as possible. It’s better to provide as much notice as possible when you have to break a lease early. Put it in writing so you have the documentation, and invite your landlord to have a conversation about the logistics and how you can help re-rent the property.
- Be available and accommodating when it’s time to show your home. This will help your landlord find a tenant sooner, which means you won’t have as large a potential penalty to pay.
- Understand your financial obligations. Your lease may technically keep you responsible for the entire year of rent payments. It’s unlikely the place won’t be re-rented, but you want to understand the expectations and the requirements.
Document Everything to Protect Landlords and Tenants
Even as all parties work together and communicate easily and openly, it’s always important to document everything in writing. Sign a written agreement that outlines the terms and conditions of the early lease termination, including the date of termination, how any fees or deposits will be handled, and any outstanding rent owed. This will help protect both landlords and tenants from any misunderstandings or disputes in the future. It will also give you something easy to refer to, in addition to the lease agreement, if there are any questions along the way.
Dealing with an early lease termination can be frustrating, but it’s important to handle these situations professionally and with the right priorities. No one can force a tenant to stay in place. Work together to make this transition as easy as possible. You’ll want to review the lease agreement, communicate openly and transparently, consider the financial impacts, document everything, and work together to find a new tenant.
By following these steps, landlords and tenants can minimize the impact of early lease terminations.
We know this can be stressful and frustrating for landlords and tenants, and we’re here to help. 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.
