Help! My tenant needs to break their lease

Salvatore J. Friscia
Salvatore J. Friscia | 3 min. read

Published on March 28, 2012

It was just a few months ago when the tenants were in the office signing the one-year lease agreement. The leasing agent followed the office procedures and made sure to review the lease terms and obligations prior to asking for binding signatures. Then, with the swipe of a pen, the property was considered off the market and occupied for the year.

So, it can be somewhat frustrating when two months later, you receive the dreaded call from the tenants stating that for some unforeseen reason, they need to move out of the property earlier than expected, consequently breaking their lease agreement. As a property management expert and the owner of San Diego Premier Property Management, I’ve had the opportunity to prepare, execute, and negotiate lease agreements for the better part of a decade, and I can say with all honesty that this scenario happens on a regular basis to the most qualified of tenants.

Whether the breach occurs one month or six months into the one-year lease agreement, it is important to understand that the lease agreement, and the terms agreed upon and signed by both parties, constitute a legally binding contract that, when breached, can carry monetary and legal consequences toward the tenant. With that said, the situation doesn’t have to escalate to a legal issue since it can be mitigated to the benefit of both parties.

If the lease has an opt-out clause, then advise the tenants of the cost associated with that clause, and make arrangements to cancel the existing lease agreement in writing. If not, then I suggest reminding the tenants that they are legally responsible for the loss of rental proceeds for the remainder of the lease term until the property is re-rented. However, with their willingness and cooperation to assist in finding a replacement tenant, they could minimize any potential out-of-pocket costs and help find a solution that limits rental losses in exchange for an early lease termination.

If the tenant agrees to assist with finding a replacement occupant, there are many things they can do that will minimize or completely avoid out-of-pocket expenses for both parties. Having the existing tenant pay for advertising and marketing the property (Craigslist, newspaper, etc.), conduct daily showings, allow easy access for potential applicants, and keep the unit spotless for showings are all ways that they can assist with re-renting the property. If the existing tenant is successful in finding a new applicant who meets all of your office criteria and written rental requirements, then a solution may have been found.

There is no guarantee of success in this situation; but the best solution is to leverage the current tenants’ help in finding a new renter that fills the vacancy and minimizes rental proceed losses, allowing the tenant to move on without incurring costly fees and blemishes on their credit and rental history.

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Salvatore J. Friscia

Salvatore J. Friscia is the Managing Broker at San Diego Premier Property Management in California.

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