Most property owners seek a valuable asset for their investment property – a long-term lease agreement with good tenants. A lease is a contractual arrangement calling for the lessee (tenant) to pay the lessor (owner) for use of an asset (property) for an agreed period. The perfect situation, of course, is a tenant who is obligated to a set period of time, pays on time, takes care with the rental unit, gives proper notice as their lease is about to expire, and satisfactorily completes the agreement.
What happens when the resident requests to be let out of their lease agreement? Unfortunately, even the best tenancy can want or need to be let out of a lease. Although this is not something the property owner really wants to hear, it is important to take a common sense approach to the tenant’s request. Burying one’s head in the sand and informing the tenant that it is “too bad, you are obligated to the lease” generally does not solve the problem.
Find out the reason for this unfortunate request. As your property manager, we know it is critical to ascertain the underlying reason WHY the tenant wants out of the lease. Many scenarios cause a resident to make this request – they have an unexpected job transfer, they wish to buy a home, they are experiencing financial difficulties, there is going to be a divorce, etc.
Sit down and review the lease. It is important to have a frank discussion with the tenant on the terms of their lease. This is a contractual agreement and it is important for residents to understand what this means financially and legally. If they have a clear understanding of their obligations, this can assist both parties in working out a solution.
Avoid a combative confrontation. It is easy for emotions to cloud the issues. The tenant feels they have justification for the termination and the property owner feels they are legally bound to the contract. A shouting match about who is right will solve nothing. Instead, now is the time to set up the road map to achieve a resolution for solving the problem.
Take a reasonable approach. There are important steps we take with the tenant to resolve the situation.
- Although the owner cannot prevent residents from moving, we discuss with the resident that they have an obligation to the lease until we can re-rent the unit. We do this verbally and in writing whenever possible.
- We counsel the tenants on their obligation to continue rental payments until the property is re-leased. If the reason for terminating the agreement is due to financial difficulties, we endeavor to set up a payment resolution. It is also important to review the disposition of the security deposit.
- We set up an agreement with the tenant that they cooperate with marketing and showing of the property. If they are moving out early, we strive to set up a walk through, obtain possession in order to re-rent the property as quickly as possible. Moving out does not absolve them from the terms of the lease.
- We remind the tenant that the condition of the property while showing the property or when they move out is a key factor that can affect both their financial obligations and possibly their credit and rental history.
- We also make clear to the tenant that the property management company on behalf of the owner will rent the property and they are not to “sublease” the property according to the terms of their agreement. If they do know of any party that is interested, we ask them to contact us as soon as possible so they can make an application to rent the unit.
There is no “one” answer to a request from a tenant to be let out of their lease agreement. Every situation is different. What is important is to have open communication and whenever possible have both sides working toward a peaceful and successful resolution.