Landlord wants to terminate lease early

[Kayla Shock]

Hello Fellow Property Managers,

I started my property management company earlier this year and currently manage several properties in Sonoma County, California. I have a landlord who wants to terminate a 12-month lease early so they can move back into the property. Is this possible? What is the process? I have been researching this all day and keep getting different answers. I appreciate any help you can provide.

Thank you,

Kayla

[Theresa Harris]

Why not reach out to another PM in the area and ask them for advice?  It will be specific for your area.

[Diran Deukmajian]

From what I have read, as long as both parties agree to terminate the lease, without any penalties, it should be ok. All that's due is the security deposit, for you to return as long as no damages to the property. 

I also understand you can charge them a certain amount as a penalty....1 month rent to cover the downtime for finding a new tenant. 

[Adam Bartomeo]

Of course it is possible. First, both parties have to agree to terminating the contract and then they need to sign a termination agreement. The problem is that both parties need to agree. When a tenant wants to break the lease, we charge them a lease break fee. More than likely the owner will have to entice the tenant to move by offering them some compensation.

[Drew Sygit]

@Kayla Shock doubt it can be done unilaterally.

So, what is the owner willing to entice the tenant with to agree?

[Arvand Sabetian]

As others have already stated, you would need to get the tenants to agree. A termination agreement with a defined move out date. The landlord needs to provide just cause for wanting to terminate an existing lease. This would be considered a no fault just cause eviction since it's based on the landlord's actions--wanting to move back into the property. The reason should be communicated to the tenants.

Since this is a case where the landlord wishes to terminate the lease early, the landlord may want to consider offering a cash incentive to the tenants.

If the tenant doesn't agree, they're legally allowed to remain tenants until the remainder of the lease. Make sure to the landlord is aware they will need to issue a 30/60 day notice prior to the lease expiring.

[Kayla Shock]

Thank you everyone for the advice/recommendations! I also spoke with a landlord/tenant attorney over the weekend, who confirmed the same. I informed the landlord of their options. Hopefully, the landlord and tenants can mutually agree on an early move-out and fair compensation.