Medical Clause in Lease

12 Replies

My tenants in a SFR are a retired couple, in their 70's. They signed a 1-year lease last April and have expressed interest in renewing (yay!). They want to change the lease this time to include "an escape clause in the event of needing to move because of a medical event with 60 days notice." In theory, I have no problem with this because 60 days is quite a bit of time. In reality, though, how would we define a "medical event"? Why even sign a 1-year lease if they can leave with 60 days' notice?

Any advice you can offer is appreciated. Thank you.

I would nail down medical event a little. A common cold is a medical event.

Or do you think I should go M2M?

M2M might be a good option.  We tell our tenants they can stay as long as they like as long as they pay and follow the rules.  The risk on their side is if you sell it and they aren't protected by a lease.

If you add a clause I would define it as an extended hospital stay or need to move to a more suitable housing situation.

You could also consider a no-cause fee to break the lease.

With 60 days notice, does it really matter? You’ll have time to re-rent, and it sounds like there have no interest In moving if they don’t have to.

Besides, I’m quite sure they can get a Dr’s note to say it’s medically required if/when the time comes.

My guess is that when they say "medical event" they mean like one or both of them is transferred to assisted living, or one of them passes away and the other goes to live with their kids....that sort of thing.  If they have been with you for at least 1 term and are looking to renew with this addendum, I don't think they are looking to escape with a common cold.

I don't think these clauses are bad, and you are better off to have a lease with the 60 day notice than to go month to month with no lease.

I suggest asking for a fee for the early release and agree to leave it without defining the “medical event”.   If you ask for a half (or full) month’s rent for the early termination, that will buy you an even better buffer.  

Just have them sign a M2M and if they are good tennats they will give plenty of notice.

Fact is tenants will leave when necessary regardless of a lease.

They may be asking for the one year term versus M2M to try to avoid rent hikes.  I would give it to them, since they are good tenants.  Sixty days is more notice than you would get with M2M anyway.

Basically if you are ok with a 60 day notice at anytime, I would just put that in the lease... Sounds like they are good tenants who are renewing, so they will most likely stay unless they need to move.  No need to specify medical issue, because at that age, they probably already have 5 between them that would qualify for notice.  Anyhow, I would just say, no problem, 60 days is fine. 

Thanks, everyone. I will reply to them today and let you know how it goes!

Quick update: I told them I'd allow the 60-day notice to break the lease with half a month's rent as a fee ($750). They agreed and I'm going to the house on Sunday to do an inspection and sign the addendum. Thanks for your help, everyone!

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here