Are Landlords Allowed to Terminate Leases Early?
Though it may not be ideal, especially for a tenant, there are instances when a landlord may want or need to pursue early termination of an existing lease. If done correctly, you as a landlord have the right to do this, but first you should gather information on your rights, your tenant’s rights, and the best steps to follow when breaking a lease so you don’t end up in a sticky legal situation.
Reasons Why a Landlord May Break a Lease
There are a few reasons you might want to end a lease with a tenant, but can a landlord break a lease for any reason they want? No, and you shouldn’t. Local laws dictate what causes are acceptable for a landlord to terminate a lease, and while they may differ from region to region, there are usually a few standard reasons a landlord is allowed to terminate a lease early. Reasons outside these must be disclosed clearly in a termination clause found in the lease agreement.
1. Rent Nonpayment or Other Lease Violations
Every once in a while, a tenant might make an honest mistake and pay their rent a day or two late. No one is perfect! Others, though, may stop paying you altogether, even after several reminders, and this lease violation is grounds for eviction. Similarly, tenants may commit other lease violations, such as hiding a pet or extra roommate or extensively damaging the property. When a tenant violates the lease agreement by consistently failing to pay rent or follow its terms, it is grounds for eviction.
As a landlord, you’re owed payment for the property you’re offering a tenant as well as respect for the space. If a tenant is violating the agreed-upon terms of the lease, you gain the right to terminate it. It’s a good idea, though, to talk to your tenant first about the issues to see if they can be resolved without taking more drastic measures.
If you end up deciding to break a lease, make sure to check your local landlord-tenant laws before taking action — look for specifics on issues like grace periods for rent or a “cure” period a tenant is provided to correct a lease violation after receiving an eviction notice.
2. Ending the Lease Before it Begins
Another reason a landlord might want to break a lease is an extenuating circumstance that occurs before the lease even starts, like the landlord deciding to sell the property (more on that later), wanting to live in it longer, or needing extra time to complete repairs or renovations. This can either lead to the landlord wanting to push back the lease start date or end it completely, which can become a hassle for all parties.
Since leases are legally binding for both the tenant and the landlord, a tenant must also agree, through a written agreement, to break the lease; otherwise, the tenancy must move forward as originally agreed upon. If both the tenant and the landlord cannot come to a solution, it may be best to discuss your options with a lawyer.
3. Sale of Property
As mentioned above, a landlord may want to break a lease to sell the property to someone else. This can sometimes be a cause for ending a rental agreement early, but in this scenario, it doesn’t necessarily have to come to that.This can sometimes be a cause for ending a lease early, but in this scenario, it doesn’t necessarily have to come to that.
The easiest way to mitigate issues in this instance is to include clauses in your lease for what should happen if the property is sold. Some landlords choose to include a clause that states that either party can terminate the lease for any reason with reasonable notice (usually around 30 to 60 days). Others may decide to transfer a lease to the buyer of the home, making the new owner the landlord for the same tenant.
No matter the decision you make, you should communicate to your tenant that you plan on selling the property. That way, tenants will have ample time to secure new housing (or prepare for a new landlord) before the sale takes place.
4. Extensive Renovations, Repairs, or Other Improvements
Can a landlord break a lease due to renovations? Yes, especially when these renovations are long-term or involve needing full access to the property. When a landlord is renovating, repairing, or otherwise improving their units, it’s common for things to go wrong or for projects to take longer than originally anticipated. This poses a problem when renovations conflict with a lease’s start date.
You, as a landlord or property manager, are responsible for providing a safe, habitable space for your tenants that meets health and safety standards. If, for example, you’re knocking down a wall or repairing pipe issues on the property, the unit may not be habitable for a renter.
If your renovations will take a long time, perhaps months, it’s advisable to make your tenants aware in advance so they have time to look for new housing.
Understanding the Process of Breaking a Lease
The process of breaking a lease can vary at both the state and local levels. Not only is it important for landlords to understand the specific conditions under which they can terminate a lease agreement, but also the laws of their state about the process of early termination.
Below is an example of Ohio’s state laws for lease termination with cause (the tenant violated the lease in some way, like not paying rent on time):
- For a rent demand notice, 3 days to pay or quit (must be sent by certified mail)
- For a notice of lease violation, 30 days to cure or quit
- For unconditional notice to quit, 3 days to quit
- Deliver this notice to the tenant following the preferred delivery method outlined in the lease (or by certified mail if the notice is a rent demand)
- Share the reason for ending the lease early
Here are Ohio’s state laws for lease termination without cause (i.e. selling the property, renovations, etc.):
- Provide written notice of the lease’s end with proper notice (the amount of advanced notice required depends on the type of tenancy: week-to-week requires seven days, month-to-month requires 30 days)
- Deliver this notice to the tenant following the preferred delivery method outlined in the lease, usually in person or by mail
- Share your reason for ending the lease early
- Tenants can break a lease as well for reasons such as active military service, domestic violence, or uninhabitable living conditions
The Rights of Tenants When a Lease Ends Early
It’s important to remember that tenants have rights when a lease is terminated, and if you don’t follow your state and local laws, you could be sued by your tenant for damages, partial rent payments, or the right to stay in the property for the full term of the lease.
Generally, tenants can contest or object to the lease termination for reasons like these below:
- Insufficient or incorrect notice
- Harassment or discrimination
- Failing to keep the property habitable and safe
- Insufficient time to fix the issue
- Handling improperly or damaging their personal property
Remember that tenants also have the right to terminate their leases early under specific circumstances. For example, under the Servicemembers Civil Relief Act (read more about this law here), tenants who are active military members have the right to terminate their lease early if they receive deployment orders.
To avoid a lawsuit, communicate professionally with your tenants and keep records of rental documents and conversations. This will not only keep you organized but will protect you from issues in court if the situation reaches that point.
Making the Right Decision for Your Property
At the end of the day, the choices you make for your property are up to you. It’s always preferred to honor a lease, but sometimes situations come up that get in the way — and that’s okay! We recommend researching your local laws or consulting with a real estate attorney before making decisions (other invaluable resources include information provided by trusted sources like the American Apartment Owners Association). If you follow the correct legal processes to terminate a lease early, you’ll be able to end it in most cases and move forward with your unit.
