Not all tenants work the way we want them to. Perhaps the tenant is habitually late in paying rent, disruptive to other tenants, or engages in illegal activity. Whatever the reason, you may be wondering: “Can a landlord break the lease?”
The short answer is – it depends. Before you breach your tenancy agreement, make sure you have good cause and comply with all legal requirements.
Can the landlord break the lease?
The landlord can break the lease, but only for certain reasons. This depends on the terms of the lease agreement and local and state landlord-tenant laws.
If the landlord violates the lease, the tenant must be given written notice and a reasonable time to vacate. Notice periods vary depending on the location of the property. In some cases, the landlord must go through court proceedings to terminate the lease and evict the tenant.
Justifiable reasons for early termination of tenancy
Since a lease is a binding legal contract between two parties, it can only be broken by certain things. Here are some of the most common reasons why a landlord may break a contract.
Not paying rent
As a real estate investor, you rely on timely rent payments each month to pay for your property and earn monthly income. Your rental property is a business, not a charity. A tenant who is behind on rent is not just an inconvenience; This can cost you money and lead to other problems.
Rent payments are usually included in the lease agreement. If the tenant overstays, the lease agreement is broken. You can then notify your tenants that they need to move. Under local and state landlord-tenant laws, the number of months a tenant has been behind on rent before they can be evicted.
Damage to property or breach of lease terms
Routine rental property maintenance is part of being a landlord. You may need to occasionally repair or replace your water heater, HVAC unit, leaky pipes, or other things. However, property damage caused by the tenant’s negligence or intentionality may be grounds for breaking the lease.
Lease agreements often include a damages clause. If you need to evict a tenant due to property damage, be sure to thoroughly document and take photos. Under landlord and tenant laws, you may need to provide them with written notice to repair the damage before notifying them that you need to vacate.
Conducting illegal activities on property
Like most landlords, you probably want your property to be a safe place for everyone. If a tenant engages in illegal activity, it could create an unsafe situation or give your property a bad reputation, which could make it difficult to attract good tenants in the future.
Examples of illegal activities that may be grounds for breach of lease include:
- Manufacturing or selling illegal drugs
- domestic violence
- theft
- running an illegal business
- Holding a party that disturbs the peace
If you are evicting a tenant for engaging in illegal activity, be sure to gather evidence of that activity before notifying them. This may include police reports, witness statements, photos, and anything else you can think of to support you throughout the process.
property for sale
After owning the property for a few years, you may decide to sell. You may want to diversify your portfolio by investing in different types of properties, or you may need cash.
When a rental property is sold, the existing lease agreement usually transfers to the new owner. If you are selling, it is a good idea to notify your tenants of the sale and provide them with information about the new landlord and what they can expect. This will help ensure a smooth transition and alleviate concerns.
Extensive repairs or renovations
Your rental property may need extensive repairs to ensure it is properly maintained or meets local code requirements. You may also want to completely renovate a property that has appreciated in value and sell it for a profit. If the lease contains a renovation clause, the lease can usually be broken in order to complete the required work.
Before breaking your lease, consider the scope of your renovations. If the work is minor, such as painting, installing new flooring, or adding security upgrades, the tenant may be allowed to stay and you will have to work around their schedule. If you are planning extensive renovations that will disrupt the tenants’ use of the property, such as major alterations, foundation repairs or a complete rewiring of the property, it may be necessary to terminate the lease to prevent disruption to the tenants’ lives.
Legal proceedings to terminate a lease
If you want to break your lease, be sure to strictly follow legal procedures. This will minimize the possibility of you getting into legal trouble.
- View rental terms and conditions: Find out if the tenant is in violation of the lease. This will give you an easy “exit”. If a tenant makes unauthorized changes to your property, such as painting, installing fixtures, or removing walls, you may be able to terminate the lease under a property damage clause.
- Check local and state landlord-tenant laws: Tenants may have special protections, or you may have to follow certain procedures to break the lease. Be sure to check the landlord-tenant laws where your property is located to make sure you are complying.
- Make sure you have a valid reason: If you terminate your lease without just cause, it can result in time-consuming and costly legal issues. Before notifying your tenant, make sure your reason for breaking the lease is legally permissible.
- Provide appropriate notice: You must give your tenants adequate notice (usually in writing) that you are ending the tenancy so that they have sufficient time to find new housing. The length of the notice will vary depending on the location of your property.
- Document the process: Be sure to keep detailed records of the tenancy termination process in case you have to go to court. Keep a copy of your written notice to the tenant and document all communications. If you violate your lease due to property damage, illegal activity, or similar reasons, be sure to take photos or keep a copy of the police report.
- Start eviction proceedings (if necessary): If the tenant does not move out after the notice period is over, you will have to file eviction proceedings in court.
- Deposit refund: Conduct a move-out inspection and then calculate any deposit deductions for any unpaid rent, cleaning costs, or repairs beyond normal wear and tear. When you return the remaining balance, provide the tenant with a detailed list of deductions with explanations.
Tenant rights to be aware of
Depending on the location of your property, tenants may have special rights that affect the termination of the lease, which you should be aware of.
squatters rights
As hard as it may be to believe, you may have difficulty evicting certain people from your property even without a lease. These people live without your knowledge and consent. They are known as squatters and enjoy strong legal protections (or squatters’ rights) in many jurisdictions.
Although most landlords consider squatters to be trespassers rather than tenants, in many places you can’t call the police to evict them. You will have to file an eviction lawsuit. In addition to legal fees, you will also have to deal with lost income until the problem is resolved.
Tenant’s rights to terminate lease
Just like a landlord can break a lease agreement for a variety of reasons, a tenant can break a lease if the landlord fails to abide by the terms of the lease or fails to comply with landlord-tenant laws. For example, if the landlord does not maintain the property, the tenant may break the lease. Other reasons may include the landlord entering the property without giving the required notice, or the landlord harassing the tenant.
Tenant’s right to give advance notice of lease termination
You need to give your tenants adequate notice that their tenancy is coming to an end so that they can find new accommodation. The amount of time you need to give varies, but is usually 30 to 60 days.
Proactive Steps to Avoid Early Tenancy Termination
Breaking a lease is a hassle. You may also lose valuable rental income until the vacancy is filled. Although terminating a lease early isn’t always avoidable, there are steps you can take to minimize your risk and help you find great tenants, including:
- Thorough Tenant Screening: Taking the time to carefully screen applicants can help you find tenants who pay rent on time, respect your property, and are considerate of their neighbors. Although screening tenants may take some time, it may help minimize the need to terminate the lease.
- Clear, Comprehensive Lease Agreement: Making sure your lease is easy to understand can reduce the need to break the lease. Your rental agreement should also cover potential issues that may arise, making it easy to terminate the agreement. Be sure to provide the new tenant with a copy of the signed lease for reference if needed.
- Maintain open communication with tenants: You can avoid some misunderstandings by making sure your guests know how to contact you with questions, concerns, or guest complaints. Also, make sure they clearly understand their responsibilities.
- Meet reasonable requests: Your tenants may have special needs or circumstances (such as a medical emergency, death in the family, or job loss) that may affect their rent payments or other circumstances. As long as the situation is temporary, and if they are otherwise responsible and easy to work with, consider being flexible on the terms of the lease.
- Pre-rental walkthrough: Your rental home may not be in perfect condition due to age and wear and tear. Maybe the carpet is worn or stained, the laminate flooring is scratched, or the painted walls are peeling off in places. Conducting a property inspection with tenants prior to move-in may help reduce disputes and misunderstandings. Be sure to document the condition of the property and have the tenant sign before moving in.
final thoughts
Although breaking a contract is no fun, sometimes it is necessary. Before you break your lease, make sure you have the legal right to do so where you live. A thorough review of the landlord-tenant laws where your property is located can help you understand whether you have a legitimate case.
If you’re not sure whether you can terminate your lease, talk to an attorney. Although you will have to pay an attorney’s fee, it may be a good investment if it helps you avoid expensive legal problems.
Save time and money with this refreshing guide to managing your own property.
exist self-managed landlordAmelia McGee and Grace Gudenkauf share tips for efficient property management, tenant screening and onboarding, and scaling your business, all to help you escape the 9-to-5 drudgery and create lasting wealth through real estate.
Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
