Tenant turnover—when a tenant leaves a property and a new one has to be found to fill the vacancy—is one of the most stressful and expensive parts of owning a rental property. Vacancies are expensive and finding good tenants is time consuming. It’s almost always in a property manager’s or owner’s best interests to keep the rental property occupied with suitable tenants for as long as possible, and lease agreements help achieve that goal.
Leases are legal documents which provide assurances for guaranteed occupancy by a tenant, among other things. Lease terms can range in duration depending on the property manager and the needs of the tenant. They can be month-to-month or stretch on to require multi-year contracts, depending on the terms that have been agreed upon. Regardless of the length of the lease, when a tenant signs one they become contractually obligated to pay rent on the property until the terms of the lease have expired.
Despite their legal commitment however, some tenants still try to move out of a property before their lease is finished. When this happens property managers and rental property owners should remember that even if a tenant provides notice, they are still liable for rent payments owed for the rest of the lease term. In most cases, the only way that a tenant can get out of a lease without having to pay rent through the end of the term is when a property manager or owner gives them permission to break the lease early without financial consequences.
Though allowing a tenant to move out before the lease has expired can be expensive, there are some situations where it will be easier for a property manager like Martin Feinberg to let the renter go. When it’s not feasible or smart to let a tenant out early without any financial resolution, some states allow landlords to collect penalty fees or early termination fees to help offset costs while still allowing the tenant to break the lease without paying for the remainder of the time due.
Tenant Loses a Job
When a tenant loses their source of income it might mean that they just cannot afford their rental payments, and without reasonable employment prospects, they essentially become an unqualified tenant unable to pass the screening. In such situations it’s often easier for everyone involved to let them break the lease and move on.
Tenant’s job gets Transferred
Tenants do not typically have control over job transfers and most have to go where the job goes. At such times it usually makes sense for a property manager to work with the tenant to responsibly terminate their lease early. In fact, in some circumstances and in some states, landlords legally have to allow tenants to break their lease for a job transfer out of the area. However, for local transfers experienced property managers can usually question the need to move.
Tenants get Divorced
If a couple in a lease breaks up or gets legally divorced, it can be a smart decision for a property manager to allow the couple to break the terms of the lease rather than get into the middle of the drama or a legal battle.
Tenant gets Sick or Experiences a Death in the Family
Tenants have the right to privacy, but if a tenant chooses to share an extraordinary circumstance like a serious illness or death in the family, and asks to move out before the lease is over, many professional property managers will choose to demonstrate compassion and help the tenant out of their rent obligation.
In the end, every property manager and rental property owner must decide on a case-by-case whether to let a tenant break their lease without having to pay the rest of the term or not. When the question comes up property mangers need to find out the reason the tenant wants to move, remind them of their legal obligation to stay through the lease term, and if appropriate and feasible, exercise compassion and wisdom in letting them go early. If a tenant is allowed to leave early, property managers must never allow the tenant to find their own replacement for a sublease. All new tenants should go through the same application and screening process as the one leaving, to help ensure that the new tenant will be a suitable replacement.
