Gary Cripps 
There are many reasons why a rental contract might end early. However, once you receive your tenant lease termination letter, you’ll have a lot of work ahead of you. In this post, we’ll highlight the steps to take when tenants abruptly end their contracts.
When Early Termination Happens
A lease can end due to a breach or a mutual agreement. Your contract might also have an early termination clause that lets either side end it in other circumstances. Here are seven reasons a tenant might have to exit the lease:
- Job relocation: If the tenant gets a new job in another city, they’ll need to relocate. They might even need to move to another property within the week.
- Military service: The military may call the tenant for service. The Servicemembers Civil Relief Act allows them to end tenancies without penalty.
- Health reasons: If your tenant has a health crisis, they might need to be closer to family. In serious situations, they may be moving to a health facility.
- Financial hardship: Money problems can make your tenant unable to pay their rent. Their moving out can be better for everyone.
- Safety concerns: Your renter may have a stalker or be in an abusive relationship. They might need to relocate for their long-term safety.
- Dispute: If a dispute emerges with your renter, your relationship with them might break down. If you can’t de-escalate the situation, they might move out.
- Eviction: Your tenant might break the lease in a way you can’t forgive. If this happens, a full eviction could be necessary.
Checking Your Rental Contract
Look over your lease and see if the tenant’s exit fits your early termination clause (if one exists). Even if they’re breaking the contract’s rules, consider their situation. They might not be in a position to accept a penalty.
For example, your contract might stipulate that early terminations void the deposit. If your tenant is moving out because of money issues, the deposit could help them. No matter the specifics, it’s worth being lenient when it isn’t your tenant’s fault.
If your current tenancy doesn’t have an early termination clause, consider adding one. In most situations, these clauses let either side end the agreement with sufficient notice. This will usually be around 30 days, possibly even 60.
Inspecting the Property
Depending on the renter’s notice, you may not have time to inspect the property together. Try to find a suitable date before they leave. After all, you must ensure it’s fit for the next tenant.
If you’re parting ways on bad terms, they might not cooperate. However, they should still work to keep the property in good condition. Otherwise, they might lose some of their deposit.
Once the tenant leaves, you could always carry out the inspection alone. If there are any repairs or problems, you’ll have to address them quickly. You might have someone viewing the property in a matter of days.
Take photos of the property as you walk through it. You can use these to promote it online or to prove the previous tenant’s negligence.
Handling the Security Deposit
If the deposit isn’t void, make sure you return it promptly. Every state has different deadlines for giving it back. For example, in California, you’ll have 21 days to return the security deposit. You must also send an itemized list of deductions.
You can generally only take from the deposit to cover the following:
- Unpaid rent
- Cleaning costs
- Repair costs
- Restoration costs
However, make sure you check your state’s laws. Colorado lets you deduct more for utilities and generally abandoning the property. Once again, try to understand the tenant’s situation. They may not deserve a significant deduction.
Moving Forward With the Property
If a lease ends early, you must scramble to find someone else. Every week the unit is empty might be another week without your passive income. Put the property back up on rental sites as soon as possible. Add new photos that reflect the property’s current state.
Use an online template to put together a robust rental application. Templates already come with every necessary and relevant field. For example, it’ll have space for potential tenants to explain their job contracts and income.
Your previous rental contract should be a good learning experience. You might include or modify an early termination clause or otherwise tighten up the lease’s conditions. Depending on the local market, it may even be worth lowering the weekly or monthly rent prices.
Screen potential tenants via background checks. Once you find a renter you’re happy with, give them the contract. After they sign it, you can start earning rent again.
Final Thoughts
A premature lease exit could throw everything into disarray for you. However, you might end up with an even better tenant once you move forward. For your applications, contracts, and more, make sure you use robust online templates.
