Managing Early Lease Termination

Having to deal with an early lease termination can be difficult and stressful. Let’s face it, if it hasn’t happened to you yet it’s a matter of “when” not “if” a resident will request an early termination. As a property management company, we have a specific procedure to follow for early termination requests. 

Depending on your exact location there are certain legal rights and processes that must be followed. To help you manage this situation, here are some ideas on how to deal fairly and consistently with early termination requests.

Consult with your attorney

First, as stated above, it's important to be aware of the regulations in your area regarding early lease termination before you start any action. It is crucial to review the rules that apply to your location because each state and city has distinct legislation. You must speak with your legal counsel or attorney to be sure you're taking the proper actions to safeguard your interests.

Expectations

Expectations are always a great place to start. Your best opportunity to set expectations is in your lease and the day that a resident moves into the property. By placing information about early lease requests in your lease, this will help answer questions before they come to you. 

Creating a win-win

The idea is to set up a situation where both you and the renter win in order to have a successful early termination, a.k.a. a win-win for both. Remember as a resident making this early termination request it is also stressful for them. Maybe their family is growing, or their job is relocating or they just ran into financial hardship. The reason doesn’t matter so much, anytime someone has to move it’s a very stressful moment in their life. Residents are more likely to leave the property in good showing condition and cooperate with arranging showing times all the way through the move-out process if they feel you are working with them, not against them.

Communication

Throughout the early termination procedure, it's effective to keep the tenant informed explicitly and frequently. Put all communication in writing. When needed, add an additional addendum with the specific information even if that means taking a section out of the lease and getting a new signature and date to assure all parties have a clear understanding and expectation. In this case, the new document should state the items from the original lease that was signed and then also include the actual fees, dates and even details on how the property will be shown to prospective residents. You can even include the real estate agent's name and details that will be handling the rental listing. Setting clear expectations paves the way to a smooth transition. Future misunderstandings will be less likely as a result.

Are you a property owner who's faced with the challenging experience of early lease termination? Dealing with such a situation can be overwhelming, but it doesn't have to be. By following a few practical tips and taking the necessary legal steps, you can make the process smoother and less stressful for everyone involved. These proactive measures can help you handle early termination requests fairly and consistently.

Happy Investing!