Early Termination Clause in Contract

5 Replies

Hello, I am in the process of revising our contract here in KS.  (Live and Learn!)  I am wanting to add an Early Termination Clause, but I can't find any examples online to modify and work with.  Does anyone here have one in their contract and if so, can you share if it's just a set amount or if the amount you charge changes depending on how many months early they are leaving.  We just had a tenant move out of state (personal issues) after being with us for 2 months.  Thank you much for your input and thoughts!

We have an early termination offer for tenants but we leave it outside the boundaries of the lease because I want the tenants specifically signing something for early termination rather than it just being one more clause in the lease. The lease obligates the tenant to the term - usually one year. If they leave early, they're still responsible for all the remaining payments with the caveat that the landlord (me) has to make a reasonable effort to re-rent. They're also responsible for utilities, yard care, and anything else set forth in the lease.

With that in mind, we offer an early termination option that is priced at two months of rent, if they don't want to do the "pay until it's re-rented" option. If there's no damages, the tenant gets to use the deposit + pay the difference. Once they move, sign that offer and pay, they walk into the sunset and we take everything back (utilities, etc). Having them sign a new termination option makes it clear that they understand what they are signing and that they were doing it voluntarily. We've had a few break the lease over the years and I've never had anyone choose the "we'll pay until it gets rented" option. It's a clean break for everyone, they don't have to worry about utilities or anything else, or hope that I get it re-rented, and if I get it re-rented fast enough I've collected a little extra money for my aggravation. 

Thank you for your responses.  We will think about it a bit more and see which one works best for us.  Kelly, I appreciate the lease statement and an amount.  JD, I appreciate the option to wait until re-rented or pay early termination fee.  Good stuff to think about a bit more!  Thanks again!

@Melissa M. my lease reminds them they are obligated for the full term but we will offer them a method of early termination as long as they abide by our Early Termination Agreement. This is a separate document that details our process and the price. The policy is on my website under Tenant > Forms if you want to check it out.