Early Lease Termination

6 Replies

Hello BP,

Details:

- Lease expires 1/16/20

- Planning to vacate by 10/31/19

- Security Deposit: $3,475

- Early Termination Fee: $4,000

- No sublease

My fiancee and I will be moving from California to Germany earlier than expected and, unfortunately, will need to break our lease by 2.5 months. We have to move early as my fiancee is acquiring her father's business earlier than discussed due to health reasons.

I reached out to the PM a week ago as I wanted to give ample notice (Approx 7 months from lease expiration).

Being that we are moving half way across the world and had planned to save for 7 more months, we are a bit tight on funds and were wondering if we forfeited our security deposit (less any deductions), could it apply toward the early termination fee?

I understand that per the contract that we signed, we are liable, but I'm trying to mitigate relocation expenses as best as I can without violating any laws, obviously.

I know there are certain situations per CA law that allows early termination without penalty, but would our situation apply?

Any advice is much appreciated!

Best,

Kyle

@Kyle Mendez Unfortunately, the early termination is mostly up to the Property Manager and if they are willing to allow it. Some will allow the early termination with no charge if it is a very urgent matter such as a death or terminal illness to one of the leaseholders. A relocation due to family emergencies will probably not fall in this category unfortunately.

As far as your security deposit goes...technically it should be used for damages but if there are none upon move-out then yes they will likely use that to cover the early termination fee. If there are damages left after move-out and this exceeds the amount you left to cover everything then don't be surprised if they take legal action.

Best of luck!

I know this is obvious and you've already reached out to the property manager, but ask for details (written wherever possible) and see what s/he says. The property manager or owner may be willing to waive some expenses based on your history or just because.

Under normal circumstances and unless your lease allows for it, I am not aware of any CA laws that allow your early termination without penalty. Those are generally limited to things such as violations of habitability, military duty, landlord harassment.

Under CA laws, landlords are required to minimize losses if a tenant prematurely vacates a rental. That may not exactly help you given the early termination fee of what I guess is slightly more than 1 month rent, but you may be able to use this logic in your favor. Ask the property manager to market the property for rent before you do leave. If the property can be rented quickly after you leave, there should be incentive for the property manager to waive the early termination fee.

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Originally posted by @Steve DellaPelle:

@Kyle Mendez Unfortunately, the early termination is mostly up to the Property Manager and if they are willing to allow it. Some will allow the early termination with no charge if it is a very urgent matter such as a death or terminal illness to one of the leaseholders. A relocation due to family emergencies will probably not fall in this category unfortunately.

As far as your security deposit goes...technically it should be used for damages but if there are none upon move-out then yes they will likely use that to cover the early termination fee. If there are damages left after move-out and this exceeds the amount you left to cover everything then don't be surprised if they take legal action.

Best of luck!

Thanks for the input, Steve.

The contract clearly states the circumstances that could waive the early termination. I was just hoping our PM would have a little sympathy for our situation and understand that this is going to take a big chuck from our moving expenses, but she wants to follow the contract to a "T". I completely understand that she has no obligation to be flexible and may be following clear instructions from the owner(s).

Being a novice investor, we take great care of our unit as I expect the same from my tenant, so we should hopefully receive 90%-95% of our deposit back.

Thanks again for the reply!

Originally posted by @Hubert Kim:

I know this is obvious and you've already reached out to the property manager, but ask for details (written wherever possible) and see what s/he says. The property manager or owner may be willing to waive some expenses based on your history or just because.

Under normal circumstances and unless your lease allows for it, I am not aware of any CA laws that allow your early termination without penalty. Those are generally limited to things such as violations of habitability, military duty, landlord harassment.

Under CA laws, landlords are required to minimize losses if a tenant prematurely vacates a rental. That may not exactly help you given the early termination fee of what I guess is slightly more than 1 month rent, but you may be able to use this logic in your favor. Ask the property manager to market the property for rent before you do leave. If the property can be rented quickly after you leave, there should be incentive for the property manager to waive the early termination fee.

Hi Hubert,

I was able to speak with her over the phone yesterday. She doesn't seem too flexible.

She also said that she was unable to market the unit while it was still occupied. I find this kind of odd, especially if I provide written consent. I gave her ample notice (~4 months) in hopes that she would have plenty of time to market the unit and fill the vacancy by the time we move out. I even offered to help market the unit and forward prospective tenants to her. No budge.

Sorry to hear, but keep trying (as appropriate, of course) and maybe an opportunity will present itself. You may be losing a month+ rent, but you get to do going to Germany! Not too bad.

Regarding your security deposit, unless stated differently in your lease, you will give written notice of lease termination (along with a forwarding address) at least 30 days prior to your moving out. I gather your property manager will require payment of the early termination fee in order to actually terminate the lease. After you receive your copy of the lease termination agreement, you vacate. The property manager will send you an itemized statement and security deposit refund (if any).

Document everything and request a pre-move out inspection if you think it will help. Good luck!

@Kyle Mendez You are obligated to the contract. You may have to suck it up and pay, which is the right thing to do.

I think your property manager is being unreasonable when you've given notice so far in advance and are willing to try and work with them. On the other hand, the PM is obligated to protect the owner, not you, and they are simply trying to run a professional business.

My main suggestion: stop talking to them about it because she's clearly not negotiable. When the time comes, give notice but refuse to pay the termination fee. Move out 30 days later and they will apply your deposit to the fee and charge you for any unpaid balance. Pay the balance and move on.