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A lease agreement is a legally binding contract between a tenant and a landlord that outlines the terms of the rental property, but tenants breaking their lease is still a common occurrence. While some reasons are out of a landlord's influence, some may be resolved by making a few adjustments. Here are common reasons why a tenant breaks their lease early and how you can prevent it.
Key Highlights:
- Tenants often break leases due to job transfers, changes in household size, loss of income, domestic violence, or better housing opportunities. Some reasons are beyond a landlord’s control, while others can be mitigated with adjustments or incentives.
- Strategies include offering larger units for growing households, creating flexible payment plans for tenants facing financial hardship, and adjusting rent to stay competitive in the market.
- Tenants may legally break a lease in cases of domestic violence, active military service, unsafe living conditions, or repeated landlord privacy violations, provided they follow state-mandated documentation and notice requirements.
- For situations like domestic violence or unsafe conditions, landlords must act promptly by addressing safety concerns, complying with legal protections, and ensuring the property meets habitability standards.
- Regular maintenance, clear communication, fair rent pricing, and respecting tenant privacy can reduce early lease terminations and improve tenant retention.
1. Job Transfer
There's not much you can do when a tenant moves to a different city or state for work opportunities or transfers, except collect the rent owed and other fees for advertising the rental unit for a replacement tenant. Depending on your lease agreement, breaking a lease early can also result in forfeiture of the entire security deposit amount.
Solution: While there's nothing you can do short of giving them a better job opportunity closer to home, you can create an environment in your rental property that's more welcoming to professionals, such as a remote work setup.
2. Change in Household Size
When you own rental units that are typically suited for single, young professionals, it's more likely that they will move out after a few years. It's not common to see them break a lease often, but a sudden change of plans can lead to early termination of the lease agreement.
Solution: First, clarify what this would mean for the tenant, such as forfeiture of their security deposit or additional fees to find a replacement renter. In some cases, the tenant will have to pay rent until a new tenant is found. However, if you have a larger unit, breaking a lease agreement may be unnecessary. You can simply offer them that unit instead and draft new lease terms.
3. Loss of Income
Layoffs, reduced work hours, or other employment issues that lead to financial hardship can lead to tenants failing to pay rent. When they cannot afford rent anymore, they have no other choice but to break a lease. Since it is rarely within their control, you can find ways to make paying rent easier for them.
Solution: You can create a payment plan to cover unpaid rent instead of breaking the lease early. It's much easier to compromise than to face more costs to re-rent the unit. You may also refer them to rental assistance programs in San Diego to help cover the remaining rent payments they can't cover. Other solutions include reducing the rent amount or allowing sublets, at least until the lease expires.
4. Domestic Violence
Domestic violence is one of the many reasons a tenant can legally break the lease, whether it happens to the tenant or a family member. State law mentions that there are certain requirements that need to be met, such as the tenant securing a temporary restraining order.
Solution: Once the tenant shows you proof, you can evict the abuser or change the locks of the rental unit for the safety of the abused tenant. The tenant who shares a lease with the victim can request that the abuser be evicted. You then need to provide a five-day written notice with no right to cure. They can also ask to break the lease, but they need to provide their landlord with written notice as well.
5. Better Housing Opportunity
A tenant may break your lease early if they find better housing options, whether it's larger in size or cheaper in rent amount. It makes sense for any renter to choose the less expensive option, especially if they offer the same things you do.
Solution: Conduct market research and look into comparable properties to set the right rent amount and encourage lease renewals instead. Keep in mind that you're better off lowering your rent amount than having to find a new tenant. You can draft a new rental agreement stating the new amount.
Valid Reasons a Tenant Can Legally Terminate a Lease
Domestic Violence
To some extent, you can place protections for your tenant, but certain circumstances cannot be remedied, and they have a valid reason to leave early. The victim of the abuse can either be the tenant who signed the lease agreement or a family member. They will need to provide you with:
- A copy of a protection order against domestic violence, harassment, stalking, or sexual assault that was issued to the tenant, cotenant, or a household member
- A copy of the written police report
- A copy of a written affidavit signed by a qualified third party acting in his or her official capacity
- A copy of a written report indicating that law enforcement was notified
- A copy of the temporary or extended protection order
Active Military Service
An active duty military personnel may leave before the lease term ends once they receive military orders. If they enter military service after signing the lease, they can still break the lease agreement without paying a termination fee. A tenant must be part of the uniformed services, according to the War and National Defense Service members Civil Relief Act, which includes:
- Armed forces
- Commissioned corps of the National Oceanic and Atmospheric Administration (NOAA)
- Commissioned corps of the Public Health Service
- Activated National Guard
Unsafe Rental Unit
If the landlord fails to respond to maintenance requests or conduct regular inspections to ensure everything is in working order, breaking a lease early may be justified. It's a landlord's duty to create livable conditions for their tenants, which means that the HVAC, plumbing, and electrical systems are working, and the rental unit is secure. Otherwise, even the replacement tenant may opt for early termination, or even lead to legal action.
Violation of Privacy
Whether you're conducting an inspection or regular maintenance, local laws require landlords to provide a proper notice 24 hours before you enter the premises. If you continue to violate this, tenants can break a lease without having to pay rent.
Early Lease Termination FAQs
Can a tenant break a lease early without legal reasons?
- They can break your lease, but you need to enforce consequences, such as reporting unpaid rent to credit bureaus or retaining a collection agency to get what is owed. The only way a tenant can break a lease without penalties is if they have legal reasons or if the written agreement had an early termination clause.
How much notice should a tenant give before breaking a lease?
- Most leases require 30 to 60 days’ written notice, but the exact requirement is stated in the lease agreement, or depending on how long the lease period is. The notice period in California is 30 days for a month-to-month lease term.
What’s the best way to handle early lease termination disputes?
- Document all communications, scan through the entire lease, and refer to state and local laws to avoid misunderstandings or legal issues. When in doubt, seek legal advice. In some cases, when the tenant breaks the lease without paying due rent, you can send a report to the credit bureau, and it will be reflected in their rental history for future landlords.
Ensuring Tenant Retention with Harland Property Management
There's no need to worry about losing a tenant after their lease ends. Companies like Harland Property Management specialize in creating a welcoming and efficient living environment for your tenants to promote retention, as well as handle any legal proceedings with expertise when needed.
If a tenant does leave for reasons beyond anyone's control, our marketing strategies will ensure that you will find new renters in no time, avoiding a disruption in your cash flow. With our professional services, both the landlord and the tenant can remain stress-free.
Sounds like a plan? Contact us today, and we can make it a reality!
