GREAT TENANT, may want out of lease early

[Chris Matthias]

Good afternoon BP

I have a great tenant who has been just about  flawless as my first tenant experience. They signed a 2 year lease. Year 2 starts June 2023. They recently asked about procedures if they were able to break the lease early as they are  trying to buy a house to fit them better. Looking for recommendations on how this process is handled best if it were to get to that point. 

Thanks again.

Kind regards. 

[Randall Alan]

@Chris Matthias

Yesterday's answers to a very similar question here:

https://www.biggerpockets.com/...

All the best!

Randy

[Alecia Loveless]

@Chris Matthias Be a good person and let them out of the lease once they have found their home. Home buying is unpredictable and this could take months.

[Theresa Harris]

I'd work with them.  They've been there for a year, so it isn't much different than a 1 year lease.  Let them know you need X days' notice and if rentals are hard to fill in your area at a certain time of year, let them know that.  As Alecia said, home buying can be unpredictable.  Talk to them about their timeline because if it will take them 8 months, you may not want a vacancy in the middle of the winter (in some areas it is harder to find tenants then).

[Adam Martin]

I wouldn't necessarily call a tenant looking to break a lease early a great tenant.  My leases have a 60 day notice requirement, forfeiture of the deposit, and 2 months of rent as damages.  While I am unlikely to get all of this I'm not about to be out any money and am going to be charging for my time.  Good on them for buying a home but they have to realize that there is a cost involved and at a bare minimum they are out their deposit assuming there are no other damages.  

This is a personal rant but I feel there is a real disconnect between peoples contracts and expectations.  Tenants want the ability to break their lease with no penalty like the signature was on about the same level of significance as signing someone's yearbook.  We are no better and have the same expectations on backing out of deals and getting our earnest money back.  

What does you lease say is the real answer and is your starting point for negotiating.  If you are silent of any penalties in the lease they are responsible to rent until you are able to find a renter and I would 100% hold them responsible for this.  If it is an easy place to rent you can also offer them an option of either paying until it is filled or give them a dollar amount to break and they aren't responsible for any additional time and know the cost to break.  

[Benjamin Aaker]

The lease is a contract and the tenant is obligated to carry it out, but both of you can agree to change the terms or terminate the contract together. Explain the reasons that you asked them to sign a 2 year lease and ask for the reasons that they signed for that long. Explain how long you expect to be able to find a new tenant and explain the cost that goes into advertising, writing a contract, and showing the place. I would suggest that part or all of the security deposit would not be refunded.
Additionally, determine when they will be out with the place cleaned and ready for the next tenant. They should continue to pay rent until you have a new tenant moving in (or if the 2 year lease has elapsed).

[Bill B.]

Don’t forget to google your states landlord tenant handbook. It could very easily be covered and tell you the most and the least you can do. Getting hit with triple deposit penalties because you violated one of these rules would be less than ideal. 

[Richard F.]

Quote from @Adam Martin:

This is a personal rant but I feel there is a real disconnect between peoples contracts and expectations.  Tenants want the ability to break their lease with no penalty like the signature was on about the same level of significance as signing someone's yearbook.  We are no better and have the same expectations on backing out of deals and getting our earnest money back.  

Aloha,

The "disconnect" is largely due to people...Tenants, Owners, Buyers, Sellers, NOT taking the time to actually read what they are signing; NOT asking even the most basic of questions about any portion of the document; NOT understanding the consequences of whatever details they might have actually read; NOT understanding the basics of Contract Law; and, frankly, NOT caring...it is so much easier to ask forgiveness than permission, and you can always lie to support your position.

For these reasons, I require all adult tenants, and Guarantors if they reside locally, to meet at our office where I go through each page of the Rental Agreement and addenda, pointing out key elements and in particular those which are most important to me as PM. I spend 30 - 45 minutes, asking and answering questions regarding the terms and the processes, including adding/removing parties from the agreement, early termination by tenants, and mounting big flat screens on the wall is not allowed. No pets; Assistance Animal Policy; Outside storage; Window AC's; Vehicles and parking; etc.

I wish I could tell you this solves all of my tenant problems, but it does not. It certainly DOES minimize them however, and when I remind them that we discussed a certain point prior to move in, they reluctantly admit it and correct the issue, 99.9% of the time.

[Bob Stevens]

Quote from @Chris Matthias:

Good afternoon BP

I have a great tenant who has been just about  flawless as my first tenant experience. They signed a 2 year lease. Year 2 starts June 2023. They recently asked about procedures if they were able to break the lease early as they are  trying to buy a house to fit them better. Looking for recommendations on how this process is handled best if it were to get to that point. 

Thanks again.

Kind regards. 

 Simple, let them go and replace them, Really not understanding the issue. If the place needs nothing but a cleaning, then all good. If needs a bit more keep SD