Property Management Blog

Can My Tenant Break Their Lease?

Property Management Blog

In most cases, tenants stay the full amount of time required in the lease, usually 12 months. However, sometimes tenants want, or need, to leave before their lease is up. Federal and California state laws permit tenants to break their lease under certain circumstances. Otherwise, tenants are responsible for the remainder of their lease. As a landlord, it is important to know both your and your tenant’s rights surrounding early lease termination, follow legal protocol, and communicate fairly and clearly with your tenant. 

Is My Tenant Responsible For the Remainder of the Lease?

A lease is a binding agreement that protects both the landlord and the tenant. The tenant is protected from being removed from the property before their lease is up, and the landlord is protected from tenants leaving early and losing the subsequent rental income. In most cases, tenants are responsible for the remaining lease while you look for a new tenant. 

It is important to note that the state of California’s Civil Code 1951.2 requires landlords to “mitigate damages” or make a reasonable effort to keep your losses to a minimum. This means you are required to make an effort to re-rent your unit, no matter the reason for your current tenant’s vacancy, before you can charge your tenant the payments for the remainder of the lease. 

However, this does not mean you have to relax your tenant standards. For example, you do not need to accept someone with poor credit history just to fill the vacancy. You are also not required to rent the unit for less than fair market value or immediately turn your attention to renting your unit while disregarding other business. 

If you find a new tenant to fill your vacancy, you can charge your old tenant for the time the property was left vacant, as well as any legitimate expenses associated with re-renting your property. For example, the costs of advertising the rental. If you make a reasonable effort to mitigate damages, but you cannot find a new renter, you are allowed to charge your tenant the rent for the remainder of the lease.

Reasons Your Tenant Is Not Responsible For the Remaining Lease 

There are a few reasons protected by federal and California state law that prevent your tenant from being liable for the remaining rent payments in the event they break their lease.

  1. Your Tenant is Called for Active Duty - The federal War and National Defense Service Members Civil Relief Act requires landlords to terminate their tenant’s lease without penalty if they are called for active duty. Your tenant must be part of the “uniformed services.” This includes the armed forces, commissioned corps of the National Oceanic and Atmospheric Association (NOAA), activated national guard, or the commissioned corps of the Public Health Service. Tenants are still required to provide written notice of their intent to terminate their lease for military reasons. Once you receive written notice from your tenant, you have 30 days from the time the next rent is due to terminate the lease.  

  1. Your Tenant Is a Victim of Sexual Assault, Domestic Violence, Elder Abuse, Or Stalking - California State Law Civil Code 1946.7 allows early termination rights for tenants who are victims of domestic or sexual assault, stalking or elder abuse, given that specific conditions are met. For example, the tenant has secured a temporary restraining order. 

  1. The Rental Unit is Unsafe or Violates California Health and Safety Codes - As a landlord, if your rental unit does not meet habitable housing requirements under local Escondido and California state housing codes, a court will conclude that your tenant has been “constructively evicted.” This means that for all practical purposes, the landlord has evicted the tenant by not meeting livable housing requirements. To be deemed unlivable, the housing issue must be dangerous, like holes in the floor, exposed wiring, gross infestation of pests, or non-working air conditioning during dangerously hot summer months. 

  1. The Landlord Harrasses or Violates Tenant Privacy Rights - Under California Civil Code 1954, a landlord must give tenants a 24 hour notice (or 48 if it is the final move-out inspection) before entering the rental property. If you repeatedly violate your tenant’s right to privacy, or harass them by turning off utilities, removing windows or doors, changing locks, or other similar acts, your tenants would be considered by a court “constructively evicted” as described above. In this case, your tenant would not be liable for any remaining rent costs. 

Create Set Guidelines for How Your Tenant Can Break the Lease

Lay out clear guidelines in your lease in the event of an early termination without just cause. Having a set clause can help ease the tension between you and your tenant, and create a smoother and quicker transition from your old tenant to a new one. If both parties understand upfront the procedure for early termination, it can shorten the time the property is left vacant and eliminate any costly court fees. 

Consider including a clause about early termination fees in the lease agreement. This allows your tenant to pay a set fee, break the lease, and walk away without being tied to the remaining rent payments. The fees usually equate to two months’ worth of rent. Depending on how fast you find a new tenant, this can either work in your favor or the original tenant’s. 

Make Sure Your Tenant Gives You Written Notice of Early Termination 

Nothing is official until it is in writing. Be sure your tenant provides you with formal written notice (text messages do not count) that includes the date they gave you the notice and when they plan to vacate the property. This protects both you and your tenant. 

Do Not Relax Requirements For a Sublease 

Your current tenant might offer to help find a new tenant, or already have someone in mind, as an act of good faith. If done correctly, it can help quicken the process; however, do not let a tenant make commitments on your behalf or find an informal sublease for your property. This ensures you maintain control over who you allow to live in the unit, so you can make sure they will be good tenants, not damage your property, or cause other problems down the line. 

Although you might be anxious to find a new tenant to fill the vacancy, do not relax your screening process for a sublease. Hold a sublessee to the same standards on their credit and background checks as any other tenant. If you do not, this could end up hurting you financially in the long run. You could also be held liable for violating fair housing laws by relaxing requirements for certain tenants. 

It is never ideal when a tenant breaks their lease, but knowing the laws surrounding early lease terminations, creating a clear course of action in your lease agreement, and approaching the situation with compassion and responsibility will help create a smoother transition from tenants, as well as lessen, or eliminate, any financial loss. 

Our expert team can help answer any of your questions regarding early termination and help create a plan of action in case a tenant breaks their lease. Give us a call--we look forward to speaking with you!

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