Ending a Lease
A lease may be terminated for a variety of reasons. The process of terminating a lease requires landlord and tenant to follow certain procedures to ensure the termination is conducted in a legally compliant manner.
The contractual relationship of landlord and tenant is a binding agreement between the two parties detailing the lease terms and conditions during a specified period of time. The lease imposes duties and obligations on each party by statute and the lease terms. Primary among these duties and obligations is the obligation of the landlord to maintain the rental premises in a safe and habitable manner during the term of the lease and the obligation of the tenant to pay rent during his tenancy as agreed.
Fixed-term Lease Agreement
A fixed-term lease agreement may be the most common rental agreement between landlord and tenant. A fixed-term lease obligates landlord and tenant to a set period of time for tenancy, i.e., has a designated start date and end date. The fixed-term lease automatically terminates at the specified end date unless the lease agreement provides other options.
During a fixed-term lease, a landlord cannot raise the rent or change other rules, terms, and conditions of the lease unless the lease provides for such future changes and the tenant agrees to the lease modification in writing.
A landlord is not required to extend renewal terms to a tenant nearing the expiration date of his current lease nor is a tenant obligated to accept a renewal offer.
Periodic Rental Agreement
A periodic rental agreement, typically a month-to-month agreement, provides lease terms and conditions for a shorter period of time, and renews automatically at the end of that specified period unless landlord or tenant give the proper amount of written notice to terminate as required by statute or the rental agreement. With proper notice to the tenant, a landlord can change the rent or other terms and conditions of tenancy.
Due Diligence
The landlord must conduct due diligence for state and local regulations for lease termination including notices, notice periods, and other requirements per statute and ordinance. The lease agreement must be compliant with all statutory requirements.
End of Lease Term
Generally neither landlord nor tenant may end a fixed-term lease unless there is cause, such as a violation of lease terms by one of the parties. The fixed-term lease simply ends of its own accord on the expiration date set by the lease. At that time the tenant is expected to move out, sign a renewal lease, or convert to a month-to-month tenancy with the landlord’s approval.
As noted above, the periodic agreement continues until proper termination notice is given by either landlord or tenant.
Lease Terminations
Lease Default
For a fixed-term lease, a landlord cannot remove tenants from the rental premises or terminate the lease before the set expiration date unless there is tenant violation of the lease terms. As examples, lease default by a tenant could be:
- Material rent default – habitual missed rent, late rent, partial payments,
- Property damage – intentional damage, negligent use,
- Unauthorized occupants in rental unit,
- Repeated violations of rental rules, terms, conditions – e.g., violation of no pets policy, noise and disturbance issues, violation of guest policy,
- False or misleading information provided to the landlord for tenancy,
- Violation of health and safety standards for sanitary conditions at rental unit, or
- Illegal use of property, criminal activity, danger posed to others.
To terminate a lease, the landlord must follow the statute requirements of the state where the rental property is located. While each state may vary in requirements for lease termination, commonly, statutes require landlords to notify tenants of the intent to terminate a tenancy. Some states allow tenants the opportunity to cure a lease violation before the landlord can take further action for lease termination; while other states allow a landlord to terminate a tenancy without giving the tenant a second chance to cure the violation.
Notices commonly used for notification of intent to terminate a lease are
- Pay or quit notice – applicable to rent defaults. The notice gives the tenant a specified number of days, usually 3–5 days, to pay the rent or quit the premises (move out).
- Cure or quit notice applicable to default of lease conditions. The notice gives the tenant a specified number of days to comply with lease terms by curing the default or quit the premises (move out).
- Unconditional quit notices – This notice requires the tenant to quit (vacate) the premises immediately without opportunity to cure the lease default.
If the tenant ignores a notice to pay, cure or quit a lease default, the landlord can begin legal action for eviction. If the landlord proves the default, a legal order will be issued to remove tenants from the rental premises.
Breaking the Lease
Early termination of the lease agreement breaks the contract terms and conditions of the lease and could be requested by landlord or tenant as a business or personal necessity.
The lease agreement may contain language that specifically allows the landlord to terminate a lease before the contracted end date. Reasons that a landlord may want to terminate a lease early include:
- Sale of the rental property,
- Landlord intends to move into the rental as his personal residence, or
- Rental unit requires extensive repair or renovations that require the unit to be vacant for an extended period of time.
There could be other circumstances whereby landlord and tenant reach mutual agreement to end the tenancy without further responsibility by either party.
The landlord cannot terminate a tenant’s lease for discriminatory or retaliatory reasons nor lock the tenant out of the rental unit.
State statutes provide protection for tenants who have legitimate reason to request early termination of their lease. In some states landlord-tenant statutes allow a tenant to terminate a tenancy before the end of term without landlord permission for reasons such as:
- Military Duty – A tenant who is a member of the armed forces, or that tenant’s spouse or dependent, who delivers copies of reassignment or deployment orders to the landlord within the required number of days of receipt of orders.
- Domestic Violence – A tenant who is a victim of domestic violence, sexual assault, unlawful harassment, or stalking, and who has a legal protection order or has reported the incident to the authorities.
- Harassment – A landlord or landlord’s agent violates the tenant’s right to privacy and quiet enjoyment of the property by stalking, sexual assault or unlawful harassment of the tenant.
- Habitability Issues – As a remedy to the landlord’s failure to maintain fit and habitable housing resulting in constructive eviction of the tenant.
- Withholding of essential services to the tenant excluding or limiting access to rental premises
- Property Damage – The rental property is significantly damaged or destroyed by natural disaster or other reasons beyond the tenant’s control.
- Violation of Privacy Rights to Quiet Enjoyment of the Premises – Intrusiveness of the landlord that violates tenant privacy, such as landlord entry to unit without tenant notification.
In a few states landlord-tenant statutes allow for early termination of tenancy for reasons such as tenant health problems, or tenant need to move to assisted living facilities.
The death of a tenant during an active lease requires due diligence by the landlord to determine how state statutes address the issue. Lease termination may be allowed at a certain period of time after the landlord has been notified of the tenant’s death. In some states the death of a tenant does not automatically terminate the tenant’s lease agreement unless the landlord’s lease agreement specifically contains language to the contrary. The tenant’s lease agreement remains active to the lease expiration date. What happens to a lease agreement following the tenant’s death depends on whether the tenant was in a month-to-month rental agreement or a fixed term lease agreement. A landlord will need to review applicable state laws and terms of the lease agreement to determine how to proceed.
There might be other reasons that a tenant could have cause to break his lease such as the rental unit did not meet required building codes, licensing requirements, or compliance with federal and state regulations regarding environmental issues, such as lead-based paint regulations. Not as likely, a lease could be terminated because the lease was made void and unenforceable because the lease agreement contained illegal clauses that require the tenant to:
- waive landlord liability for landlord negligence,
- accept an as-is clause for habitability,
- accept responsibility for repairs to the property,
- waive their right to privacy and quiet enjoyment, or
- waive their right to take legal action against the landlord.
However, the most common tenant reasons for requesting early termination of the lease are personal matters such job transfer/relocation, job loss, divorce, serious illness, buying a home, moving in with a family member, partner/roommate, other life events or changes in in lifestyle. In most states these reasons are not considered legitimate reasons for early termination of a lease. The landlord’s lease agreement may contain clauses that address the issue of early termination by the tenant and options that could be pursued for release from the lease contract.