Understanding Termination Rights And Clauses

Early termination clauses are all too common in rental agreements and they can also refer to more than just the right of a landlord to break a lease. Depending upon the jurisdiction, such clauses can also provide tenants with the same rights. In the most basic of senses, early termination clauses set the amount of notice that a party (which could be either the landlord or the tenant) must give the other to terminate the agreement early without any penalty.
The early termination clause is there for a reason, it protects both the landlord and the tenant . It does this by ensuring that the rights and responsibilities of both parties are clearly defined, setting a standard for how those mutual obligations will be conducted. It is for this reason that both parties should always review and sign the relevant agreements prior to entering into a tenancy arrangement at the property in question. This is true even when both parties know each other well, as their rights are still protected when the tenancy agreement is in writing.

Legal Bases For Early Termination

However, there are circumstances under which a rental agreement can be terminated prior to the expiration of the lease. Terminating a rental agreement does not come without penalty, as most landlords will charge for the early termination of a rental agreement. Sometimes, it is well worth paying that penalty in order to return home without additional stress.
Job Relocation
Many companies require their senior or upper-level management staff to relocate due to promotion or reorganization. Often, relocation is unexpected. In legally terminating a rental agreement early, tenants can move their belongings into storage and travel to their new location without the added concern of paying rent in both locations.
Military Deployment
Tenants can legally terminate a rental agreement by furnishing a copy of their deployment orders to the landlord pursuant to the Service Members Civil Relief Act (SCRA). Sometimes referred to as the Soldiers and Sailors Civil Relief Act or the Soldiers and Sailors Civil Relief Act, this specific act provides protection for service members who have signed a lease and are deployed into active duty. The SCRA does not allow a landlord to evict an active duty service member who is deployed, nor does it allow the landlord to collect rent from an active duty member who has been deployed.
Unsafe Living Conditions
Similar to unsafe working conditions, the safety and welfare of tenants is paramount to a comfortable living environment. Living in an unsafe situation puts tenants at risk of potential harm, especially for those with children. Most states have certain requirements for their rental properties pertaining to a minimum level of safety for tenants. Public water that is safe to consume and use for cooking is another requirement for a rental property.
Breach of Contract by Landlord
When rental agreements are signed, it is important that each tenant read the terms thoroughly. If the rental agreement contains a provision regarding subleasing, the tenant may sublease their apartment for one year. Although most lease agreements include termination and sublease provisions that are aligned with state law, some landlords write in illegal provisions that grant them additional rights. In these instances, the tenant can turn to a local housing agency or defense attorney for further assistance in terminating the lease.

Obligations And Penalties For Tenants

Without a mutual written agreement or statutory authority for breaking a lease, a landlord’s only remedy to enforce the lease is an action for damages caused to him by the tenant’s breach of the lease. While the landlord may recover the loss of expected rent, he cannot recover any damages other than damages for non-payment of rent. A consequential damage claim (such as additional costs to re-rent the apartment or lost profits due to the vacancy) is limited, except were the lease provides for recovery of them. In this case, the lease is an enforceable contract.
In the absence of a written lease provision allowing a tenant to terminate the lease early, a tenant is likely to be held liable for at least the reasonable cost to advertise the rental space, process applications, and complete a new lease. If no "holdover" tenants are interested in the rental space, the landlord could expect to recover the fair rental value of the rental space for the balance of the term (if requested by the landlord), limited by mitigation of damages principles, as described below.
The lease will also likely contain a security deposit agreement, establishing the landlord’s right to withhold the costs of tenant damages incurred due to early termination of the lease. This may include repairing damage to the property or doing extra work due to failed promised cleaning or repairs. However, if the lease is silent as to the early termination of the lease or its associated damages, the security deposit amounts may not be sufficient to cover any damages, due to the deposit limitations in many states’ security deposit laws.
If the tenant is the party breaching the lease, almost all states permit the landlord to assess penalty late fees for late payment of the rent. Most states will allow the landlord to withhold the rent owed until it is paid, plus the late fee. For example, if the tenant did not pay the last month’s rent (except in places where a tenant who defaults on the lease is required to forfeit his security deposit as a setoff for unpaid rent) by the first day of the month to be charged for that month, then the landlord can withhold the last month’s rent from the tenant and charge the tenant the late fee for the past-due rent. However, some states will not permit a landlord to keep the last month’s rent as an offset for unpaid rent; instead, the tenant will have to repay that amount once the lease has been terminated.
To the extent that the tenant may be forced to vacate as a result of the landlord’s action (such as failing to timely commence necessary repairs to the apartment), depending on the state, the tenant may be able to recover, either through a counterclaim or as an independent cause of action, the costs incurred as a direct result of the breach. This includes any payment made to a second landlord, a new security deposit, moving expenses, and other amounts spent due to the default.

Reaching Settlement Or Negotiation With Your Landlord

Negotiating with landlords can often prove challenging, but it’s beneficial to remember that the tenant-landlord relationship is one that is based on mutual benefit. For your landlord, renting to you is a business relationship that provides them with income. The prospect of losing a month-to-month tenant who pays their rent on time and in full may not be a situation they are keen to place themselves in. Keep this in mind during negotiations and highlight the benefits they will enjoy from an early termination by you.
For instance, you can offer to help your landlord find new tenants, which will save them from having to post an ad for new tenants, host viewings, and draft a new rental agreement, especially in busier seasons when they may have plenty of other responsibilities. Additionally, your understanding as a tenant means they’re more likely to give you the benefit of any vacate notice periods. You can also briefly explain your situation, like if you’re relocating for work, or if a relationship with another tenant has soured, and again emphasize how obliging you’re being allows them to avoid a potentially messy and expensive situation.
Having said this, you should only offer to help your landlord in this way if you are truly able to do so. The important thing to keep in mind about negotiating your termination is to choose your battles and remain calm. While the outcome may not be favorable initially, if negotiations don’t appear to be going anywhere, remind yourself graciously that you can opt to be legally bound anyway.

Taking Care Of Paperwork For Ending The Tenancy

For all its potential pitfalls, the process of negotiating the end of a residential lease does not have to include any surprises or misunderstandings. Keeping this process as seamless as possible may help landlords define and achieve their goals, while at the same time benefitting tenants.
A good step toward facilitating an amicable termination is to document everything in writing. A written agreement can clarify verbal information and prevent misunderstandings between landlords and tenants. Because a lease is a contract, it must be terminated by mutual consent of both parties. This process is simplified when both parties put everything related to the termination in writing.
Written letters, emails, or text messages can provide context for the termination of a lease , and they can be used to help define the responsibilities and obligations of each party. They can give you a trail to follow that can help when that landlord or tenant seeks the advice of an attorney about the end of the lease, or even when their dispute moves forward into litigation.
When a tenant decides to leave a rental property early, this important documentation should include:
When documenting the process, both landlords and tenants should take care to be clear and concise while remaining friendly and cooperative. Even if they are unhappy with aspects of the situation, the ability to communicate effectively in written form through this process can also help to protect both parties. Failing to keep a good paper trail might allow for an early termination of a lease agreement to take a very different direction later.

Legal Help And Resources

If you suspect your landlord is not abiding by your state’s laws you may wish to seek legal advice. In these cases reach out to organizations such as your local legal aid (law help) or tenants’ rights organizations to obtain information relevant to your area. Such organizations can help you understand your rights and navigate the process of termination. In addition, group housing co-ops or condo unit owners may contact their state’s real estate commission or board and are similarly protected. Should your claim be more complex or you suspect your landlord may retaliate, consider seeking the assistance of a real estate attorney. Attorneys specializing in landlord-tenant issues may be able to draft demand letters and help assess the validity of your claim for early termination or for a wrongful termination.

Preventing The Need To End The Lease Early

While there are steps you can take to mitigate the financial loss of early termination, the best way to deal with this issue is to prevent it from happening in the first place. You may not have a crystal ball that allows you to see the future, but you can employ these strategies to ensure you never have to worry about paying an early termination fee again. Choose a Shorter Lease If you know that the demand for rental property or your personal or professional prospects are uncertain, then consider a short-term lease. This will allow you the flexibility to move out without incurring extra rental fees. Just make sure that the landlord will allow a shorter lease. Some landlords are unwilling to enter into leases that are shorter than 12 months. Read the Rental Agreement Thoroughly Before Signing You should never sign anything you haven’t read fully , especially a rental agreement. Read through the entire document carefully to make sure you understand everything. If there is anything you are unsure of, ask for clarification before you sign anything. Never feel pressured to move into a rental if you don’t understand the terms of the contract. Be Proactive If you think you may have to move out of your rental early, start planning as early as possible. Give yourself plenty of time to put your plan into action. The worst thing you can do is put off taking action if you suspect you may need to leave. Contact an attorney early on in the process to get guidance on how to best proceed.