Learned a Valuable Lesson About 2 Year Lease Terms

[Jim Macedon]

Well, put me in the camp of no longer accepting two year leases.  The problem, as I've learned recently, is that the lease really only binds the landlord.  The tenant can still leave whenever he wants.

One of my tenants who still has 8 months left on a 2 year lease emailed me the other day to say that she got married, she has a house under contract, and she's moving out November 30th.  "Sorry, I know this is early, but this is what is best for my family."  I responded, congratulated her on her wedding, and politely explained that unless she is the victim of domestic abuse or is a member of the armed services with official orders, she is contractually obligated to pay rent until the end of the lease.  However, I would love to work with her and if she could pay through January to give me at least some opportunity to market after the holidays, I'd waive February through June.  She has not responded, and my wife and I came to the obvious conclusion that she's probably just going to leave November 30th and there really isn't anything I can do about it.  Am I really going to hunt her down and sue her?  No.  Therefore, 2 year leases are worthless for the landlord.

[Nathan Gesner]

As soon as I saw your headline, I knew it was a tenant leaving early. In my experience, tenants terminate early about 80% of the time on leases longer than 12 months. I can't explain why.

I only allow one-year leases and I include a termination clause that requires them to give 30 days notice in writing and pay a penalty for terminating early. If they meet my requirements, they walk away free-and-clear, get a good Landlord reference, etc. This is a money-maker about 90% of the time. The remaining 10% opt to take their chances and continue paying rent while looking for a replacement tenant. We almost always get a new lease before they leave or shortly thereafter, so the tenant doesn't pay much out of pocket.

The last tenant to move out and cause a loss was almost two years ago. I attribute a lot of this to proper screening and a higher-quality tenant.