California Early Lease Termination

4 Replies

Hey BP Peeps,

I'm looking for feedback on what you would do in this situation. 

We have a tenant who gave us 60-days notice they are not planning to renew their lease (expires Jan. 31; 60 days notice required in lease). They're buying a house. There is an early termination fee, but I'm realizing it's a bit poorly worded: it says the tenant can either pay the balance on the lease, or pay a termination fee of $X-amount (about 2 months rent).

Tenant is asking to be let out of the lease at the end of next month, and to not be charged for January rent. 

What would you do?

We were in the same situation in San Bruno, CA. It was a large apartment complex and they claimed 2 month notice necessary as well as 2 months fee for early termination. We ended up staying 2 months after giving notice but ended up not charging anything as a termination fee. We claimed hardship tho...did the tenant claim any reason they could not comply? Loss of job? If they say no hardship, then they should pay in full. But it's also a difficult time for many.

They gave you 60 days notice that they will vacate a month early? I would not charge a termination fee for that. I would let them know they are responsible for rent until the end of their lease or until a new renter takes over. Ask if they are willing to let you market / show the home with 24 hours notice. If they are, you can probably have a new renter lined up right after the current ones vacate. Charge the departing tenant up until the new renter moves in. This ensures no vacancy on your part and it reduces the financial impact on the departing tenant. Win-win.

Originally posted by @Christine Smith :

@Nathan G., thanks for your reply. So you wouldn’t let someone out of their last lease payment (unless a new tenant was found)? 

I would normally hold them responsible until a replacement renter was found. In my market, I can almost always find a new tenant in just a few weeks, so nobody loses out.

What if it sits empty for the month of January and costs you $1,500 in lost rent and utilities? Why should you eat that loss for the convenience of the renter? 

It's not personal. It's not dishonest or taking advantage of them. You're holding them accountable for any loss. But if they work with you to facilitate marketing and showing, you can probably find a renter before they leave and save both of you from any losses.