Early termination fee

10 Replies

Hi,

I read a post here that states every lease should have an early termination clause with a fee. What do you suggest as the terms and the fee?
Thanks very much in advance.

Mike

In my lease if a tenant wants to break a lease they must give 30 day notice and pay a fee equivalent to 2x the monthly rent.

If the landlord wants to break the lease, the landlord should follow the same rules as the tenant must follow.


Joe Gore

Thank you Chris and Joe!

Chris, what recourse do you have if they don't give 30 days or don't pay the fee?

Realistically, not much except a lawsuit. Unfortunately, you would need to know their new address to have them served for such.

If they've simply taken off, breaking their lease, I still file for an eviction against them. My reasoning is that I want to go the legal route in getting the property back in my name but honestly, I want this eviction to end up on their credit history. In my county it's less than $80 to file against one tenant.

Sometimes that's the only "revenge" a landlord has with a tenant who views a lease in the same light as toilet paper.


Gail

@Gail K. If a tenant takes off, breaks their lease, moves out and is no longer in residence, it does not make sense to file for eviction. That would be abandonment in our jurisdiction and require a completely different course of action and would return our property to us sooner. We try to avoid lawsuits. They are not a productive way to use our resources or the court resources. Revenge leads to bad karma. Inflicting harm on others is unnecessary, especially in such a simple situation as this.

Better to have procedures in place that will help you easily transition from one tenant to another in the event that someone needs to break a lease. Clear communication with the tenant from the beginning and a sufficient security deposit to cover your real losses is a better approach.

@Mike Russo This is why I always say that tenant screening is THE most important part of being a landlord.

A lot of issues that cost time, money, and vacancies revolve around poor tenant screening. Not all issues, but a good majority of them.

Thanks again folks. You've given me a broader perspective on the subject.

Mike

Vote

"@Gail Kaitschuck If a tenant takes off, breaks their lease, moves out and is no longer in residence, it does not make sense to file for eviction. That would be abandonment in our jurisdiction and require a completely different course of action and would return our property to us sooner. We try to avoid lawsuits. They are not a productive way to use our resources or the court resources. Revenge leads to bad karma. Inflicting harm on others is unnecessary, especially in such a simple situation as this.

Better to have procedures in place that will help you easily transition from one tenant to another in the event that someone needs to break a lease. Clear communication with the tenant from the beginning and a sufficient security deposit to cover your real losses is a better approach."

Please reread what I posted. I wrote "if they've simply taken off, breaking their lease".

If they notify us they must break their lease, they are offered the option of beginning the process of both of us finding new tenants to take their place. Once this has happened, they would no longer owe rent. They do understand the process would involve (if they continue to reside in the rental unit) applicants walking through to view the place.

Security deposits would be used to pay rent if the unit is abandoned. And, as required by most states, the forner tenant would be notified of the status of their deposit, even if this means sending the notice (and then collecting it) to the last known address...the rental property. The unopened envelope would then be stored in the tenants file as evidence that I made the legally required effort to notify them of the status of their security deposit within the time period required for my state.

Revenge may lead to "bad karma" (whatever that is supposed to be) but sometimes that's all a landlord has when a tenant packs up and moves out without notice. I get some enjoyment doing this and frankly, don't really care all that much how much "court resources" are wasted.

Gail

If a tenant disappears and doesn't destroy the property, I'm perfectly happy with keeping their deposit in accordance with our state laws and lease agreements. It's when they disappear and leave destruction that I pursue further action. We just went through this a few months ago. A great tenant for several years gave 3 days notice, breaking the lease with 5 months left. He said he would leave the condo clean and give the keys to my contractor. He gave him the keys all right, but the unit was trashed.

If a tenant disappears without formal notice, in both states of our rental properties, we can keep the deposit for any rent owed and any damages. No need to file an eviction. We photograph the property and change the locks as long as it looks like there is only garbage left. Often the utilities have been shut off. The tenant gets a mailed a certified letter to their last known address, as @Gail K. said.

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