An early lease termination letter is written by tenants to notify the landlord of their intention to terminate a lease agreement earlier than previously agreed upon and request a formal release from the agreement. Once the request is accepted and the tenant has fulfilled all their pending contractual responsibilities, they are relieved of any financial and legal obligations to the lease agreement.
Early termination will typically result from unprecedented events such as financial struggles, relocation, or deployment by the military. Any legally justifiable reason can be enough justification for the early cancellation of a lease agreement. An early lease termination letter lets the tenant convey this information to the landlord. Usually, early termination will attract a penalty to the tenant. Examples of penalties include forfeiting the security deposit, paying a few months’ rent, or an agreed-on fee. Alternatively, tenants can be asked not to pay any penalty as long as they can find a replacement or sublet the space.
One way of planning for an early lease termination is requesting a termination clause to be added to the lease agreement before signing. However, it does not limit early termination to lease agreements with a termination clause; tenants can terminate their lease agreements in most conditions as long as they follow due diligence. Early termination of lease agreements is also subject to State laws which tend to vary from State to State. However, a written early lease termination letter is a standard legal requirement to prevent disputes and misunderstandings and ensure tenants are legally protected from any future claims of lack of due diligence.
Why you may want to Terminate the Lease Early
As mentioned earlier, diverse reasons can lead to an early termination of a lease agreement. A lease agreement being a legal document, can not simply be broken without legal and financial ramifications. However, several legal reasons for cancelling a lease agreement can guarantee leniency to tenants.
Some of these reasons are as discussed below;
One common justifiable reason why tenants tend to terminate lease agreements early is financial constraints. Sometimes tenants can face financial problems, such as getting laid off from work in between a tenancy period, resulting in having to terminate the lease to cope with the situation (inability to raise rent). This reason is considered legally justifiable, and in such a situation writing an early lease termination letter would be necessary.
The military is deploying you
Entering active military service is another legally justified reason for terminating a lease agreement earlier than projected without penalty. This right is awarded to active military personnel through the Service Members Civil Relief Act, as long as the tenant signed the lease before being deployed. The tenant should present to the landlord a written letter of early lease termination, after which their tenancy is terminated 30 days after the next rent payment due date.
You’re leaving because of domestic violence
Domestic violence is another prioritized reason for tenants’ early termination of lease agreements. Therefore, if you’re a signatory to a lease agreement and happen to be a victim of domestic violence during the tenancy, most state laws permit you to cancel the lease before the expected expiry date. The early lease termination can be written as a notice to the landlord while giving the applicable reasons for this termination.
The rental unit is unsafe or violates health and safety codes
Rental properties are expected to comply with local and State housing codes. If a property fails to meet these standards, tenants can file for constructive eviction through a court exempting them from contractual obligations such as monthly rent payments. As a tenant, ensure to follow the right procedures for vacating an inhabitable piece of property, including providing written notice to the landlord and an early lease termination letter.
The landlord violates your privacy rights
Tenants, by law, are entitled to privacy and the “quiet enjoyment” of the property they are renting. This prevents landlords from entering the rented premises without notice, typically of 24 hours. Other than unexpected visits, breach of peace includes excessive phone calls from the landlord, loud neighbors, constant dog barking, etc. Under these circumstances, tenants can leave prematurely as long as they issue a notice through a letter of early lease termination.
The rental unit is illegal
If the house being rented has some irregularities, for example, lack of a rental license, no lead inspection, or has not been determined as suitable for occupancy by the state, a tenant can terminate the lease agreement earlier than the expiry date. The tenant will also get compensated by the landlord, which will eventually help them find a new rental. This is because the rental unit is deemed illegal, and it is the landlord’s obligation to ensure the property is compliant before tenants move in.
Other possible reasons
Other than the mentioned reasons, a lease can be prematurely terminated for other reasons such as inhabitability due to lack of maintenance and repairs, harassment or stalking within the premises, moving in with a spouse or moving into a retirement home, etc.
How to Terminate your Lease Early
The process of terminating a lease prematurely needs to be carried out in accordance with the stipulations of the lease agreement and applicable State rental laws. Due to the contractual rights of you as a tenant, the property owner is always the risk of being taken to court, forwarded to debt collectors, losing the security deposit, and damaged reputation if he or she does not act appropriately.
This article will look into the straightforward steps of ending your lease agreement before the expiration date.
Step 1 – Send the early lease termination letter to your landlord
The process of terminating a lease prematurely is initiated with an early lease termination letter. However, before writing the letter, it is recommended that you review the lease agreement to identify any stipulations regarding early terminations. Look out for terms associated with the notice period, termination fees, the termination clause, and other associated rules. If an early termination clause was included in the lease, follow the outlined procedure. If there isn’t an early termination clause in the agreement, follow the legal procedure applicable in the respective State.
Clear communication is fundamental during the entire process, and an early lease termination will typically be standard. Once you have familiarized yourself with applicable provisions of the lease agreement, craft the letter of early lease termination and send it to the landlord. Try to send it as early as possible to give the landlord sufficient time to seek a replacement. Early notices ensure the process is completed smoothly.
Step 2 – Mutual lease termination agreement
Once the early lease termination letter has been forwarded to the landlord, talks on how to successfully complete the process. Firstly, any agreements should be written in a mutual lease agreement – a contract stipulating the date and the conditions under which the tenant will move out. Negotiations often occur when the original lease does not have an early termination clause, and the tenant does not have special circumstances purporting the termination.
Some of the key areas which are negotiated include;
Forfeit security deposit
Losing your security deposit is one of the financial repercussions tenants should anticipate when terminating a lease prematurely. Note that landlords can decide to keep the security deposit; therefore, you may need to channel your best-negotiating skills to salvage all or part of the amount.
Ask for a buyout
Tenants can also ask for a buyout, a lump sum fee paid by a tenant as compensation to the landlord in exchange for absolving the tenant of all contractual obligations. In some cases, the security can be used as the buyout fee, whereas in other cases, landlords may ask for an additional fee above the security deposit.
Sublet the property
Subletting is another approach tenants can adopt to get landlords on board with you moving out without necessarily terminating the lease. Proposing to sublet will occasionally be a better alternative for landlords as it eliminates the hassle of looking for a replacement tenant, which is normally a lot of work. A subletting clause could be added to the original lease agreement if it was not initially included.
Under a sublease agreement, the sub-tenant assumes the financial responsibility to cover monthly rent payments, but the tenant remains obligated to the original lease with the landlord. Therefore, the subtenant pays the tenant monthly rent, which the tenant forwards to the landlord. Subletting can be an incentive for landlords during negotiation since it eliminates the workload of searching and screening new tenants for the landlord, while guaranteeing that monthly rent payment will still be paid as agreed upon in the original lease.
Other negotiation tactics suggest finding a replacement tenant and paying a few months’ rent to give the landlord enough time to find a replacement tenant themselves. However, note that it is the landlord’s duty to mitigate damages in most States and can therefore not sit back waiting for the lease term to end and then sue the tenant for rent accrued during that period, even if the lease was terminated prematurely. As a tenant, you should thus consult state laws or real estate attorneys in such a situation.
Note: If you believe you have justified reasons to terminate a lease prematurely yet the landlord seems strictly resistant to the idea, it is recommended that State renting laws or legal counsel be consulted to ascertain the next course of action. There will typically be provisions protecting tenants and allowing them to cancel a lease prematurely without repercussions.
Step 3 – Keep all documentation
Always keep copies of any documentation used in the process of terminating a lease, for example, a copy of the early lease termination letter, mutual termination agreement, original lease, etc. These documents may be presented as evidence of due diligence in court should you find yourself on the defensive side against contractual breach claims.
Step 4 – Move-Out
The last step on how to terminate a lease agreement early is moving out on the day agreed on. Honour the new agreement and do not stay past the move-out date as this would be considered a violation of the agreed terms. Also, collect the security deposit if applicable. Each State will have a State-specific security deposit return period, and as a result, the security does not have to be collected on the move-out date. However, it should be collected within the associated period.
What to Include
An early lease termination letter should have certain key components to communicate a tenant’s intention in a formal manner effectively. Below are the basic components tenants should incorporate in their letter for early lease termination.
Your personal information
Personal information such as name and contact information must be included in the early lease termination letter. Also, add your address. This information is used to clearly identify yourself to the landlord.
Landlord’s personal information
The landlord’s identification should also be presented in the letter. Write down their name, contact details, and address. An early lease termination letter being a formal letter, having identified the sender, must also identify the recipient.
Date of writing the letter
An early lease termination letter must be dated. This is the date when the letter was written. Ensure to use the appropriate format, for example, dd/mm/yyyy.
Building and apartment details
A brief and precise description of the property in question should be given. Try to be as descriptive as possible by including location, type of rental (duplex, penthouse, etc.), house number, plot number, number of bedrooms, etc. The description in the letter of early lease termination should match the description in the original lease agreement.
Reason for termination
Tenants are required to give reasons for the sudden termination of the lease. Be diplomatic and give a comprehensive reason that doesn’t make the landlord question legitimacy.
Requested termination date
An early lease termination letter also has to include a proposed termination date (also the date of moving out). This date can be negotiated once the landlord decides to accept your request for early lease termination.
Penalties and fees for early lease termination
The lease termination letter should declare any associated penalties the tenant is aware of. If an early termination clause exists in the original lease agreement, check the agreed-upon penalties and fees and list them in the letter. You can also include a payment plan to illustrate your commitment to ensuring the successful completion of the process.
Request for inspection before leaving
It is advisable to request an inspection before you vacate the premises. The inspection is meant to confirm if there are damages that need repairing so that you can attend to any repairs you’re liable to. The inspection date can be a few days or weeks before the move-out date.
Details of your forwarding address
Tenants should include their new address where any correspondence can be forwarded later on, should the landlord have pending issues they want to discuss. Including a phone number in the termination letter is also recommended.
Reminder for the payment of security deposit
An early lease termination letter should have a reminder to the landlord that the tenant is entitled to a security deposit refund.
Keys and property
As part of moving out, tenants have to return keys to the property. Therefore, they should ask the landlord how they should return keys to the house and other areas.
Dates & signatures
The tenant should then provide a signature followed by their name. The date of signing should also be declared.
Once the letter has been finalized, a copy should be made before sending it to the landlord. When sending the letter, a delivery method that verifies that the landlord receives the letter, such as certified mail with return receipt or hand-delivery, should be used. Once received, the letter serves as formal notice to the landlord. It is advisable for a tenant not to move out before giving notice; otherwise, the landlord would be within legal limits to sue or charge the tenant rent for the months remaining on the lease term.
Tenants can use an early lease termination letter template to prepare their termination letters. Templates are a good way to identify what information to include in the letter. They are also fillable, prompting users to complete the blank spaces with the appropriate information. You can access such professionally designed early lease termination templates from this website for free. The templates are readily downloadable and easy to personalize.
It is common to find yourself needing to move out in the middle of a lease term due to unavoidable circumstances such as financial constraints, deployment by the military, divorce, or domestic violence issues. In such a case, as a tenant, you are required to follow due diligence, which includes submitting a written notice to the landlord communicating your intention to terminate the lease prematurely.
This notice is referred to as an early lease termination letter. The letter must contain key components such as the tenant and landlord’s personal details, date, the reason for termination, termination date, applicable penalties and fees, forwarding address, signature, and date of signing. Premature termination of a lease agreement is governed by the original lease agreement and applicable State renting laws, and it is advisable to review these stipulations before initiating the process.
Frequently Asked Questions
Since a lease a binding agreement between a tenant and landlord, if you break the contract, you can expect any of the following repercussions: penalties, legal action due to breach of contract and damage, eviction on record, judgments & eviction affecting your credit score.
If you’re a victim of domestic violence
If the landlord fails to meet their obligation
When you are a member of the military, and you’ve received orders to change your station
If the landlord violates health codes
If the property is inhabitable