Tenant Breaking Lease by Moving Out Early- Now What?
No landlord likes the tenant breaking a lease and move out early. After all, it costs the landlord money and turns the cash cow into a negative yielding property. Generally the landlords lease their property to a tenant for a fixed term. But then some tenants still break the lease by moving out early leaving the landlord in a mess.
Don`t worry if this is the case with your tenant. You can definitely collect rent of the remaining lease term. And even can sue your former tenant for the costs associated towards re-renting the property. Don`t panic about this situation. Simply make reasonable efforts to re rent your vacant unit to a new tenant.
A Tenant is obliged to comply with the lease unless the fixed term of the lease does not expire. This means, the tenant is under a contractual obligation to pay the rent unless the lease expires. Now if the tenant wants to move out early, first he has to serve a proper move out notice. And, pay the remaining term rent unless you find a new tenant.
However in some states, a tenant can break the lease by moving out early without under the obligation to pay for the remainder of the lease. Even for such a case, a tenant must need to serve a proper move out notice and has a legal justifiable reason for moving out.
So, let’s evaluate your situation and understand the recourse, you should take next.
#1 Tenant Breaking Lease By Moving Out Early With Proper Notice
Generally in this situation, when the tenant is moving out with a proper notice and has a legal justifiable reason to do so. The first thought that comes to the mind is whether you will be able to collect the rent for the remainder of the lease or not?
In these cases, it totally depends on your state laws and your lease to what will happen to the remainder of the lease. If you have provisions in the lease and your state laws allow. You may collect remaining rent of the lease term from this tenant.
Most state laws, however in all cases require you to mitigate damages i.e to make reasonable efforts to re rent the unit when a tenant is moving out in between the lease term. Well, also If you think for a second, your tenant has already given you a proper notice before moving out. This means you were having enough time to re rent the unit.
Also Read: A Tenant Move Out Checklist For Landlords
So, the question of collecting remaining rent should not bother you much. Still do review your lease and see what provisions are there in the lease for this case.
Early Termination of Lease:
If you have a provision of what is called as an Early Termination of Lease, then you are at a safe side. If not, here is what you need to know.
Including an Early Termination of Lease clause apprehend the tenant beforehand of the consequences of terminating the lease early. Putting this clause in the lease not only saves you from conflicting interests during early move out. But, it is also helpful in reducing tenant turnovers.
Simply include a flat fee or one month or two month worth of rent as early termination charges if the tenant wants to move out early. Though it is always better to include a flat fee instead of including a month worth of rent as it can instigate negative emotions. A tenant can think that you are collecting something extra and unnecessary from him.
The Tenant understands that if he chooses to move out early before the end of lease term or renewal thereof, the landlord incurs costs, which includes but not limited to the expense and time in renting to a new tenant.These costs can include employee costs, marketing expenses and other costs. The exact amount of which varies and is hard to determine.
The tenant prefers and agrees to pay a fixed known amount if he moves out early rather than taking the chance to pay an exact amount which can be higher or lower than the agreed amount. Tenant understands and evaluates that this charge is a reasonable estimate of Landlord`s re renting costs.
The tenant also understands that it is not an extra fee, penalty or extra rent charged to relive the tenant from the existing obligations of the lease. Tenant is still responsible under lease obligations including for damages, all the rent due, and other charges. Therefore the tenant agrees to pay $____________ to the landlord as early move out charges to cover Landlord re renting expenses. To implement this option, the tenant must submit a _____ day advance notice to move out in written.
#2 The Case of Protected Group
The Federal and State Laws allow individuals from certain groups to break the lease and move out early with minimum notice and no penalty. These groups include
- Active Members of the Military Service:
If your tenant is a member of either of the Armed Forces, US Public Health Service, National Oceanic And Atmospheric Administration, or the National Guard and is called for active or military duty. Then the tenant can move out and break the lease by giving a minimum 30 day notice.
As per the SCRA (Servicemembers Civil Relief Act), if the service person is assigned to a different or another location which is minimum 50 miles away can break the lease by providing a 30 day move out notice.
- Victims of Domestic Abuse
Around 27 States in the US allows the victims of Domestic abuse, Sexual abuse, and Violence to break the lease and move out if necessary. If your tenant has sent an early termination letter stating this as a reason and submit a proof of the same. He/ she can move out by breaking lease but still is responsible for remaining rent for the next 14 calendar days.
#3 Unforeseen Cases To Consider
Apart from normal circumstances, there can be some unforeseen circumstances when your tenant wants to move out before the lease term expires. In such cases, you need to be reasonable with the tenant. And let them break the lease with minimum to no penalty at all. Such cases can include
- Job Loss
- Illness
- Separation or Divorce
- Death of Some Family Member
If your tenant is facing such a situation, he/ she is already going through hardship. And paying rent or being able to pay rent at such times sometimes becomes very difficult. So, at that time, you must be reasonable with your tenant. Let your tenant break the lease with minimum to no penalty at all.
#4 Tenant Breaking Lease By Moving Out Early Without Notice
Things get a little messier here when a tenant breaks the lease and moves out without a notice. You are left with a property which is now sitting vacant. And even, no hope of collecting the rent for the remaining term from this tenant. And if it is your worst day, the tenant left you with some concerning damages.
Finding yourself stuck with this situation?
Don`t worry as you have two ways to deal with this situation
- Either move on and find a new tenant for your property
- Or, chase this tenant and sue him for the owed rent and damages.
Wondering to move on and cover the losses from the security deposit? Then understand that you can’t legally use the deposit unless you have a clause in the lease to use a security deposit in case the lease gets violated. So until before the tenant misses the next due rent payment, don’t use their deposit. Because it is only after that the lease is considered violated. Before that if the tenant came back, the lease will still be effective.
And if you are thinking of chasing this tenant and collecting the owed money, let me tell you that it will be a little muddy road but not a slushy one.
Suing The Tenant Breaking Lease By Moving Out Early
Understand that this tenant has literally abandoned your property by not giving a move out notice. And is responsible for paying rent for the remaining lease term. So in order to pursue him to pay the owed money, you need to go through civil court to collect money from this former tenant.
Here are few steps, you need to take before filing a suit with the civil court
- You must actually ensure with the tenant about the abandonment of your property. You can do this by sending a Belief of Abandonment Notice to your former tenant`s last known address. Send the notice via a registered mail with a deadline when the rent due date is 14 days passed through.
- If the tenant does not revert within the deadline, take the possession of your property back and document all the damages if any.
- Again send a letter to the tenant estimating repair costs and the rent owed from the date the tenant moved out till the lease is ending.
- Deduct this total owed money from the security deposit and if the security deposit isn’t enough, prepare to sue your tenant in a small claims court.
Read: Steps when Security Deposit is not Enough to Cover Damages
Remember you are a landlord and your reputation is everything. Ensure you must document all the proof of the communication that you have tried to make with the tenant to collect the owed money. And collect all the evidence of the damages if any before filing the suit.
The judge also wants to see that you have made reasonable efforts to mitigate the damages. So you should start looking for a new tenant and not wait for the judgment for the former tenant. Based on your case and circumstances, the judge can order for
- Execution of Former Tenant`s Assets (Freezing Bank Accounts or Seize other Assets)
- Garnishment of Wages
Further Read: Two Tenants on Lease, One Move Out
The Bottom Line
Being a landlord and handling tenants is not a cakewalk. But having the right lease in place does your job little easy. In this case; if it is not for the lease, you will definitely have trouble seeking a tenant for owed money. So, put a great attention while drafting your lease to avoid conflicts at all cost.
Do You Know?
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