Help! Tenants want to break lease without penalty.

[Eilene Gil]

Hi everyone, 

My partner and I are only in our second year as a landlords, with our second set of tenants in our ADU unit. We live in the main house next to it. There has been construction on the street we share to repair/replace the main sewer line. It's been a long process with street closures and smells, and the city keeps pushing the end date for completion; these are all issues beyond our control as landlords. Tenants were aware of construction prior to move-in, but apparently not aware that it was to replace/repair the sewer. This has had no impact on indoor plumbing.

Odor is obviously not pleasant, but they are claiming that this is the sole reason they want to break the lease immediately and without penalty and that it violates health/safety codes. They claim the odor was not present before signing the contract. For background, the odor is most noticeable when they are actively working on the site which has been sporadic. Much has improved in the last couple of weeks as well, since they finally poured pavement, covering up a majority of the worksite. 

Based on our research and reading extensively into our contract, we're responsible for any odors/plumbing issues emanating from within the unit, but the unit itself is in perfect condition; it's only two years old and they haven't brought up a single issue in the couple months they've been there. There is a small patio area that's gated in with the unit, but hasn't been "enjoyed to the fullest extent" because of the smells.

Can we hold them liable for breaking the lease? 

Has anyone here had a similar situation or know of additional resources I can refer to? Possible solutions?

We're in the middle of COVID and heading into winter, so turning the property and looking for new tenants is obviously not ideal. It seems they're absolutely set on moving out, so we're now wondering if there may be other reasons behind this move. We don't want to be taken advantage of. 

Appreciate any insight!