I am a landlord in VA. I have a current tenant who has been good and is trying to find a home to move into. Their lease renews with me on June 1. It is a nice family neighborhood and i do not want to offer month to month rental. The tenant is hesitant to sign another lease as they are actively looking for a new home and asked what is the early termination fee if they break an annual lease agreement. Can i include a fixed fee if they terminate early? my concern is that if they leave in the winter i could be 2-3 months without a new tenant.
Many leases include a termination fee. As long as it is agreed up-front and in the lease correctly, there shouldn't be any problems.
Another idea for you is a month-to-month fee. In the apartment space, it is common to charge more if a tenant goes month-to-month. A win-win solution might be to charge some amount extra per month such that if they give the house back in the winter, you don't care because you have already made your money. But, that gives them the flexibility to move on short notice.
My lease includes a termination fee that is dependent on the time of year when the lease is broken. The fee is small if the tenant leaves when it will be easy to fill the vacancy, and big if the tenant moves out during the slow winter months.
Give them two options, either lock in the low rate for 1 year lease or pay something like $100 extra on month to month. If they stay until December, then you have collected $600 extra. I don't like the early termination fees, because they can be hard to collect. Also if allowed in your area, you can require 60 days notice. That gives you extra time to market your property.
No reason to lock them in a lease they intend on breaking.
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