Standard Texas Lease: Is an agreed early termination a default?

2 Replies

Hoping someone out there has had lots of experience with clauses 27 (Default) & 28 (Early Termination) of the standard Texas Association of Realtors lease as it read in 2013... 

My tenant wished to exit the lease early with approximately 5 months left on the lease. I agreed to allow this so long as I could find a replacement tenant. Otherwise, the tenant agreed to stay for the remainder of the term.

I contracted with an agent to find a new tenant, which happened in time for a move-out with three months left in the rent.

My position would be that the tenant is responsible for re-letting fees (agent commission). But the tenant argues this was not actually a "default" since I agreed to allow the tenant to exit the lease.

The tenant thus argues that he was not "abandoning" the lease and that he would only be liable for re-letting fees were this an actual default under Section 27. By contrast, the tenant argues that this was a far more innocent agreed early termination under Section 28, which makes no mention of the tenant's potential liabilty for re-letting fees.

I countered that I am not waiving my rights to re-letting fees and that this remains a default situation. Indeed, I am just facilitating the tenant's early departure while trying to mitigate their liability as a consequence of the default. My agreement to switch tenants does not transform my current tenant's early exit of the lease into a non-default. Nor does the conditional nature of the tenant's departure and the tenant's willingness to stay for the duration of the lease had I not been able to find a replacement tenant render his early exit a non-default.

In brief, switching tenants was not a mutually beneficial activity. And had the situation not been so urgent I would not have incurred agent commission fees (I would have just advertised online like I usually do).

Needless to say, the smart thing would have been to chart all of this out in an ancillary agreement. But I am curious as to any views under these circumstances for future cases. Thanks!

Hello Gunnar, I'm certainly sorry to hear the trouble that this situation has caused you. The only thing that I could suggest would be to just amend the lease to be more clear and in favor of you (the landlord). We use our own as do many landlords that I know. They, of course, are always written to protect us from situations like these. Have a great one!