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Breaking a Lease: What Landlords Should Know

Breaking a Lease: What Landlords Should Know

Every landlord wants to have a good tenant who will stay with them for the long run. However, sometimes, the conditions may not be entirely ideal for the tenant. Even after they have signed a year-long lease, your tenant may have to break the lease and move out before it ends. This can happen for several reasons, including job transfers, family emergencies, or personal preferences.

Therefore, as a Norfolk landlord, you need to be prepared to handle this situation. Having a tenant break the lease can be stressful, so you need to make sure that you know everything related to leasing breaks. It will also enable you to write a lease agreement accordingly.  

When Can Your Tenant Break The Lease?

The lease is a binding document between the landlord and the tenant for the occupancy of the rental property for a fixed period, most commonly one year. The lease expires once its term ends, and the tenant can move out of the property or sign a new lease.

Even though your tenant can break the lease depending on the situation, matters can become clearer if there is an agreement to cancel the lease mentioned in the agreement itself. Here are a few reasons when you can allow the tenant to break the lease -

  • Military Duty

In all of the United States, any tenant who enters active military service is allowed to leave right before the lease term ends without a penalty. However, such renters must also give you a notice of their intent to leave and a copy of their order. If you have signed a yearly lease with such a tenant, their tenancy will end on the last day of the month that follows the month in which the notice was delivered. If there is a month-to-month lease, then the tenancy will end thirty days after the day when rent is next due.

  • Uninhabitable Conditions

If there is breach of the implied warranty of habitability, that is if you fail to maintain a fit and habitable rental property, the tenant may have a justifiable reason for leaving. It is also known as constructive eviction, which is not available for all types of dwellings. Through this, it is implied that you have evicted the tenant for practical purposes by not providing an unlivable unit. The tenant can break the lease if you, as the landlord, fail to supply the basic amenities for living as stated under Virginia Law. However, they must send a written notice informing you about the breach and a reasonable time to correct it.

  • Domestic Violence

Under Virginia state laws, it is possible for a tenant who has been a victim of domestic violence, sexual abuse or other criminal sexual assault to terminate their obligations under a lease. The tenant must send a written notice of termination to you or the property management companies. If your tenant finds themselves in such a situation, make sure you cooperate and are available. There are also several hotlines which your tenant can use for help.

  • Privacy Violation

If the renter feels like the landlord is harassing them or violating their privacy, it might be a justified reason for them to break the lease. Such harassment includes landlord entry without notice. According to Virginia state laws, you must give your tenants 24 hours of notice before entering their rental property. However, if you repeatedly violate this law and the tenant’s right to privacy, or if you change the locks in the rental without the tenant’s permission, they can break the lease.

Apart from these, the renter can also break the lease if you have not made the required disclosures about the rental. Since the tenant is bound to the lease agreement, they first have to submit a notice and get your approval for breaking the lease.

What To Do When a Tenant Breaks the Lease

If your tenant is in the process of breaking the lease, you need to find out what your next steps should be. You need to understand the laws and your responsibilities as a landlord carefully.

Here are a few steps you can follow if your tenant is leaving –

  • Check the Tenancy Agreement

You may have mentioned specific clauses and penalties for breaking the lease in the tenancy agreement. Make sure you check the early termination clause and bring it to the tenant’s attention. For example, you can require your tenants to pay a fee for breaking the lease. Or you can outline in the agreement that it is the tenant’s responsibility to find another tenant.

  • Check Your State Laws

check the Virginia state laws and the local landlord-tenant laws to gauge the full scope of what is allowed and what is not. It will also help you verify how well you are covered and the obligations you and your tenants must uphold.

  • Find New Tenants

Finding new tenants to occupy your property is one of the most critical steps to take if your tenant is breaking the lease. If your area and agreement require your tenant to bring another renter, you can be relatively unworried about this process. However, if you are required to mitigate damages, you need to do your best and start looking for a new tenant immediately.  

  • Notify Your Property Manager

Lastly, you also need to notify your property manager as they may better handle these processes. They can help you with your responsibilities in this situation and will also inform you of your rights. With a property manager, you can correctly understand the reason for your tenant’s lease break and take the necessary steps towards eradicating issues, if there are any. They will also guide you through your state’s legislation.

What to Include in Your Lease?

It is essential to add specific terms related to breaking a lease to your agreement. This way, your tenant can know what to do after they break the lease –

  • Written Notice

A clause for written notice will specify when the tenant must submit a written notice to you, the landlord. The notice is generally provided between 30-60 days after moving out.

  • Early Termination Fee

You should also specify the amount your tenant is liable to pay if they choose to end the lease early. The termination fee mentioned in the early termination clause is usually equivalent to two months of rent. However, the amount varies depending on the reason for the lease break and on the specifications discussed between you and the tenant.

  • Subleasing Clause

In many states, the landlord must re-rent their property to new tenants. However, if the tenant plans to leave the rental early and break the lease, they can sign a sublease between them and a new sub-tenant. As the landlord, you need to add a csubleasings[lause to the agreement.  

  • Advertising Cost

Another expense that the lease-break fees can cover is the cost of advertising the rental to the next potential tenants. Since the tenant may be responsible for paying fair compensation for the loss of rent caused to you due to the lease break, they can be charged reasonably in the form of advertising costs.

Landlord’s Duty to Re-Rent

You cannot charge your tenant the remaining rent due under the lease. The tenant should only give you the amount they are responsible for during the vacant unit. The landlord’s duty to re-rent is also known as the landlord’s duty to mitigate damages.

Assignment of Lease

According to the Virginia residential landlord and tenant act, lease assignment is the transfer of the lease by any tenants. The tenant is only allowed to transfer the interests of the rental agreement to another tenant with the landlord’s approval. However, you, as the landlord, cannot unreasonably withhold consent. If the new tenant has a consistent payment history under past leases, you cannot withhold consent to assignment.

In Conclusion

property managersAfter your tenant has broken a lease, the complicated process that follows can be simplified if you hire a property manager. A good Norfolk, Virginia property manager can easily guide you through your duties and obligations. They can also help you find a new tenant to ensure that your rental does not stay vacant.

At Doud Realty Services, we provide our clients with a wide range of flexible services, including residential management and investor services, and help you diversify your real estate portfolio. Our transparency and tech-savviness have solidified our position as one of Hampton Roads’ highest rated property management companies.

If you need any assistance with handling tenant issues, reach us at Doud Realty Services.