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Landlords: How to Handle Early Lease Termination
Whether initiated by you or your tenant, early lease termination must follow the terms and conditions laid out in the lease as well as any applicable laws in your state. Work with a lawyer to minimize the financial impact.
Learn the Laws that Govern Early Lease Termination
Did you know that if a renter is called for military service the Service Member Civil Relief Act allows them to terminate their lease?
While leases are legally binding agreements, there are a variety of situations that allow both landlords and tenants to terminate a lease early without any financial or legal penalties. For the long-term success of your real-estate business, it’s important that you understand your rights and responsibilities as a landlord.
Early Termination by a Tenant
There are federal and state laws that provide reasons tenants can break a lease early without penalty. In other situations, it may be in a landlord’s best interest to let a tenant out of their lease early even if the tenant is not technically allowed to under the law.
Circumstances that Allow Tenants to Terminate Early
Although tenants have significant rights in the situations outlined below, they still have certain legal obligations, such as providing proper notice, to terminate a lease early without any financial impact.
- Military deployment (must provide proper notice)
- Domestic violence (only allowed in some states)
- Job transfer (only allowed in some states)
- Landlord’s failure to provide a safe and habitable rental unit
- Landlord entering the property unlawfully
Circumstances that Do Not Allow Tenants to Terminate Early
Although there are no laws that let tenants break a lease early for the reasons listed below, if a tenant is in bad shape financially or physically, it may be in your best interest to allow them to break the lease and move on to a new renter, rather than wasting time trying to evict them.
- Job loss
Know that landlords have a duty to mitigate damages by making an honest effort to find a new renter, even if a tenant breaks the lease without any legally permissible reason. Regardless of the specific circumstances you’re dealing with, speaking with a provider lawyer can help you sort through your options and create a strategy designed to minimize financial damage, reduce stress and avoid litigation.
The Maximum Security Deposit a Landlord Can Require
You may be wondering how much of a security deposit the law allows your landlord to require in the first place. The answer depends upon the state in which the rental unit is located. Here are a few examples:
- Some states limit security deposits to an amount equal to one month’s rent.
- California limits deposits to 2 month’s rent, unless the rental is furnished, in which case the deposit can be up to 3 months.
- Some states have no limit on the amount of a security deposit a landlord can request.
- Cities and counties might have different security deposit laws you need to check, especially if the unit is rent controlled.
If you’re about to sign a lease and have concerns about the security deposit required or questions about any other aspect of the agreement, it’s a good idea to get legal advice. When you join LegalShield, you can be on the phone with an experienced lawyer within 4 hours after your membership is approved and after initial contact. Your membership gets you unlimited legal advice by phone, the ability to submit your lease, help from a lawyer to negotiate your lease terms, and more.