Early Termination Clause

[Ryan Spath]

This one clause has helped my rental property management possibly more than anything else. Every time something happens good and bad I modify my lease, make an addendum, make it stronger, another thing to consider for future agreements.

The Lease is what you and your tenant legally agree to when entering into the relationship of landlord tenant. You always want to check with state and local laws to make sure you are being compliant.

Many moons ago I had a tenant move into one of my properties and after they occupied the property for a week they notified me the wrote an offer on a home and would be out by months end. We ended on great terms and because of this interaction I added this clause to my lease:

(I)
Early Termination. In the event the tenant needs to terminate this rental agreement earlier than the
agreed upon for any reason, the tenant shall give the landlord a 30 day written notice and be subject to pay two (2)
months rent and forfeit the security deposit.
Example: Tenant notifies landlord on July 25th with intent to vacate property. Tenant will pay normal
August rent and possess property until the end of August. At this time the tenant will be liable for two (2)
month’s rent and forfeit the security deposit. For this lease the total sum due would be $4,410.00 and the
tenant would forfeit the $1,845.00 security deposit.

This clause does several things, it allows the tenant to move out and know what is expected from them financially if they chose to end the agreement. From the property-owner side, it gives you an easily copied and pasted portion of the lease if an occupant needs to move out early for whatever reason.

What clauses have you added that has improved your business?

[Drew Sygit]

Quote from @Ryan Spath:

This one clause has helped my rental property management possibly more than anything else. Every time something happens good and bad I modify my lease, make an addendum, make it stronger, another thing to consider for future agreements.

The Lease is what you and your tenant legally agree to when entering into the relationship of landlord tenant. You always want to check with state and local laws to make sure you are being compliant.

Many moons ago I had a tenant move into one of my properties and after they occupied the property for a week they notified me the wrote an offer on a home and would be out by months end. We ended on great terms and because of this interaction I added this clause to my lease:

(I)
Early Termination. In the event the tenant needs to terminate this rental agreement earlier than the
agreed upon for any reason, the tenant shall give the landlord a 30 day written notice and be subject to pay two (2)
months rent and forfeit the security deposit.
Example: Tenant notifies landlord on July 25th with intent to vacate property. Tenant will pay normal
August rent and possess property until the end of August. At this time the tenant will be liable for two (2)
month’s rent and forfeit the security deposit. For this lease the total sum due would be $4,410.00 and the
tenant would forfeit the $1,845.00 security deposit.

This clause does several things, it allows the tenant to move out and know what is expected from them financially if they chose to end the agreement. From the property-owner side, it gives you an easily copied and pasted portion of the lease if an occupant needs to move out early for whatever reason.

What clauses have you added that has improved your business?

 Check your state laws as most don't allow a security deposit to be liquidated as you have structured.

Can only be liquidated as legally allowed - which may cover unpaid rent when a lease is broken.