Early Termination in Minnesota - What do I Use?

Question

I am having trouble figuring out what to put for the early termination for my lease. I know there should be fees, but can someone point me in the right direction for the wording and fees I should use for Minnesota.

I am a brand new landlord and would really appreciate any help!

-nikki

Account Closed · Answer

Hi. There is a lot of information there that I don't think really needs to be on the lease. All you really need is:

If Tenant(s) move out prior to the end of the Lease term without having paid the rent in full, Tenant(s) agree to pay to the Landlord an early move-out charge in the amount of $2050 (two months rent plus $150 for advertising costs) and is separate from security deposit deductions. To implement this option, Tenant(s) must submit an advance written notice to the Landlord at least 60 days before termination. The notice will not go into effect until the early move-out payment is received. Normal regular monthly rent is still due in addition to the amounts above.

Nikki Swansen · Answer

Better, I hope:

If Tenant(s) move out prior to the end of the Lease term without having paid the rent in full, Tenant(s) agree to pay to the Landlord an early move-out charge in the amount of $2650 (two months rent), the security deposits, and rent while the property is vacant. Tenant(s) must submit an advance written notice to the Landlord 55 days before termination. The notice will not go into effect until the early move-out payment is received.
	
	Tenant(s) understand that this charge is not a penalty or fee that releases the Tenant(s) of his/her obligations under the Lease. Tenant(s) are still responsible for all obligations under the Lease including paying for all rent due, damages and other charges.

Thomas S. · Answer

I think that you are capped at 2 months rent though you can continue holding them liable for rent until the lease runs out or you find a new tenant assuming you are making a reasonable effort to place a new tenant. I don't remember entirely as I picked that part up from the free landlord seminar the city of minneapolis puts on every month and the one I went to was quite a while ago.

Personally I charge them the deposit (1 month rent for 1 year, 2 month for 2+ years) as well as any rent while the property is vacant. The only times I've had early breakers I've also offered them partial refunds on their deposit if they are accomodating in finding new tenants and give proper notice. Never had a problem getting a new tenant in before the early termination date.

Nikki Swansen · Answer

Okay.. after a ton of reading, I have changed it to:

If Tenant(s) choose to move out before the end of the least term, or renewal thereof, Tenant(s) understand that the Landlord will incur costs which include, but are not limited to, the time and expenses in finding and renting to a new Tenant these costs may include Employee costs, advertising, marketing and other expense. Naturally, the exact amounts of these costs vary and are difficult to determine.
	
	Tenant(s) agree that he/she prefers to have a fixed, known amount that the Tenant(s) agree to pay if the Tenant(s) move out early, rather than taking a change that the actual costs could be more or less that this agreed-to amount. Therefore, if Tenant(s) move out prior to the end of the Lease term without having paid the rent in full, Tenant(s) agree to pay to the Landlord an early move-out charge in the amount of $2050 (two months rent plus $150 for advertising costs) and is seperate from security deposit deductions to cover the Landlord's expenses in having to re-rent the Leased Premises in lieu of paying the Landlord's actual damages. To implement this option, Tenant(s) must submit an advance written notice to the Landlord at least 60 days before termination. The notice will not go into effect until the early move-out payment is received.
	
	Tenant(s) have evaluated and agree that these charges are very reasonable estimates of the Landlord's re-renting costs. Tenant(s) also agrees to pay these charges whether or not the Landlord is successful in re-renting the Leases Premises. Additionally, the Tenant understands that this charge is not a penalty or fee that releases the Tenant(s) of his/her obligations under the Lease. Tenant(s) are still responsible for all obligations under the Lease including paying for all rent due, damages and other charges.

If anyone could give me a quick critique.... I would be so thankful!!!

Nikki Swansen · Answer

Thanks James! Okay, so if I read what you said correctly, how does something like this look?

If Tenant chooses to move out before the end of the least term, or renewal thereof, Tenant understands that the Landlord will incur costs which include, but are not limited to, the time and expenses in finding and renting to a new Tenant these costs may include Employee costs, advertising, marketing and other expense. Naturally, the exact amounts of these costs vary and are difficult to determine.
	
	Tenant agrees that he/she prefers to have a fixed, known amount that the Tenant agrees to pay if the Tenant moves out early, rather than taking a change that the actual costs could e more or less that this agreed-to amount. Therefore, if the move-out date is within the first 6 months, Tenant agrees to pay to the Landlord an early move-out charge in the amount of $2600 to cover the Landlord's expenses in having to re-rent the Leased Premises in lieu of paying the Landlord's actual damages. If the move-out date if after 6 months of tenancy, Tenant agrees to pay $1250, advertising costs and rent until a new tenant is found and occupies the unit. To implement these options, Tenant must submit an advance written notice to the Landlord at least 60 day before termination.
	
	Tenant have evaluated and agree that these charges are very reasonable estimates of the Landlord's re-renting costs. Tenant also agrees to pay these charges whether or not the Landlord is successful in re-renting the Leases Premises. Additionally, the Tenant understands that this charge is not a penalty or fee that releases the Tenant of his/her obligations under the Lease. Tenant is still responsible for all obligations under the Lease including paying for all rent due, damages and other charges.

James Hamling · Answer

Nikki,

Here in MN it all depends on the lease structure you are starting with. Under MN law you can not charge a fee for a person breaking a lease early per say, if you have a 1yr lease and they break at month 6 you can charge for the entire time it is not released and reasonable costs to release the unit given you put forth good faith efforts to release the unit.

Now sure there is other ways to skin the cat, deposits and so on to cover the time period but here in MN you wont get far charging a fee thats is above and beyond covering the original lease amount, follow?

What I have for MN is a dual rate lease for here in MN, the unit is rented at X with discount Y for certain performance like rent on time and so on. Early breach of lease violates discount and then there liable at the regularized rate, not a fee.

You'd think you should be able to get a fee for breaking lease but every time I have seen that challenged the landlord has lost and only recieved monies to cover the lost rants for time of vacency.

Nikki Swansen · Answer

Thank you!

You saved me a headache!

Have a great day!

-nikki

Elizabeth Colegrove · Answer

@Nikki Swansen

I call it a Buy Out Clause so it can be used by both parties. My leases try to be far for btoh sides with no bias. I created this clause because I had two tenants break their lease this past summer to buy. Below is exactly what I have in my lease. This is just an example, I am not a lawyer.

Buy Out: This allows either the tenant or the landlord to break the lease without penalty as long as they have provided 60 days’ notice and two months break lease fee ($3200). 60 days’ notice begins on the day that the fee is received. If the tenant moves out before the end of the 60 days’ notice, the additional days will be accessed as a fee. For military provisions please refer to XVIII.

Initial ______________ ______________

Nikki Swansen · Answer

Thank you for your reply.... Minnesota doesn't say anything for the amounts, so that would be a good way to go, yes? By chance, do you know where I can find the "wording" that I should use? I have search extensively here with no luck.

-nikki