Breaking Lease Early

[Aaron Antis]

Appreciate any input, in advance.  

I am just thinking ahead, just in case, but wanted to get input on what options I could have with current tenants in a lease that might not expire for close to 1-2 years from now in the event I "needed" to sell a house or two, either for a better cash position for myself, or to 1031 into a larger investment property, etc.?  

The lease from my management company doesn't have anything in it currently in case the landlord (me) needs to break the lease early.  If I can break it still, what does that look like, and are there standards on kinds of concessions for having done so (like giving them 2 months to find another place, those 2 months on my dime, etc.).  Obviously I would like to give them plenty of time to uproot their lives, but also want to balance being too generous or giving away way more than is necessary.

Thoughts?  Thank you again!

[Caleb Brown]

In my area when you sell a property leased you HAVE to honor the lease. You can't just kick the tenant out randomly unless the lease specifically states otherwise or it's MTM. If the lease was going to end you can not renew it but you can't kick someone out because you want to sell them vacant.

[Tim Baldwin]

Like Caleb's response, in Florida, a landlord can't terminate a specified lease term on grounds the the landlord wants to sell, unless the lease provides the landlord with that termination option. You have to wait until the term expires. But you can offer a "buy out" agreement to the tenant, and yes, 2 months' rent value is commonly seen. I would not necessarily give up the deposit (if you have one) until a move-out inspection is performed so that there is some security for damages caused to the property. That said, if the circumstances warrant, you could agree to return the deposit as part of the buy-out agreement. 

[Nathan Gesner]

Quote from @Aaron Antis:

The others are correct. When you sell the property, the existing lease transfers with the sale to the Buyer. You can try to negotiate an early termination with the tenants, or the buyer can try to negotiate a termination, but the tenants have no obligation to leave. You can only kick them out under specific scenarios. 

[Matthew Morrow]

Quote from @Aaron Antis:

Appreciate any input, in advance.  

I am just thinking ahead, just in case, but wanted to get input on what options I could have with current tenants in a lease that might not expire for close to 1-2 years from now in the event I "needed" to sell a house or two, either for a better cash position for myself, or to 1031 into a larger investment property, etc.?  

The lease from my management company doesn't have anything in it currently in case the landlord (me) needs to break the lease early.  If I can break it still, what does that look like, and are there standards on kinds of concessions for having done so (like giving them 2 months to find another place, those 2 months on my dime, etc.).  Obviously I would like to give them plenty of time to uproot their lives, but also want to balance being too generous or giving away way more than is necessary.

Thoughts?  Thank you again!

 If you need to sell your property before the lease expires, you'll typically need to negotiate with your tenants. Since your lease doesn't include a break clause, you'll want to communicate openly and give them ample notice, ideally a few months. Offering to cover their moving expenses or providing a rent concession for the last month can help ease the transition. The key is to balance being fair with protecting your interests; consider what would motivate them to move and how much time they might need to find a new place. It may also be beneficial to consult a local attorney or your property management company for guidance on lease-breaking standards in your area.

[Aaron Antis]

Thank you!!!

[Michael Smythe]

@Aaron Antis check your state and local laws because even if a lease has an early termination clause for the owner, statutes may override the lease.