22 Jun What Happens When You Need to Terminate Your Lease Early
Most leases are for a fixed term of 12 or more months, and when you entered into the lease agreement, you most likely had good faith intention of fulfilling the entire lease term.
However, life sometimes has a tendency to throw us curve balls and you may find yourself needing to “break” your lease. This can be due to involuntary job transfers, loss of employment, or changes in domestic or cohabitation arrangements. Other times the decision to break a lease is a voluntary and calculated decision because you want to purchase a home or move for some other reason that benefits your situation.
Regardless of the reason, the process to terminate our standard lease is the same and we’ve outlined the process below. The only exception to this process is that of a military transfer in which case the process below will most likely not apply and you should contact our office for more information.
Contents
Here’s the Bottom Line
The lease break situation is covered in the lease, paragraph 1.11 “RE-LETTING CHARGE UPON LEASE BREAK”. In this paragraph you’ll find well written legalese by attorneys, but here’s the rub:
As of right now, you have a lease agreement that says you agree to pay rent and maintain the property per the lease provisions from the published lease start date through the published lease end date. In exchange, the owner has agreed to let you have exclusive use of the property during this time. If you want to break the lease, this can only be done so long as the owner does not suffer damages as a result.
In even more simple terms, the owner has no responsibility to subsidize your early move by absorbing adverse financial impacts that they otherwise would not have been faced with had you fully honored the term of the lease. Hey, we get it! Something came up and you need to move. It happens. But when it does, the full cost falls on you.
So What’s That Mean?
The only way to release you from the lease is to find another tenant who will move in and take over paying rent and maintaining the property. Until that happens, you must continue to pay rent, keep utilities turned on, remove snow if applicable, mow the lawn, control weeds, trim bushes, etc. This requirement remains even if you decide to vacate prior to a new tenant moving in. Meaning simply moving out does not terminate your obligations in the lease.
In addition to the usual property upkeep and rent payments, you also are responsible for the cost associated with replacing you. The lease in paragraph 1.11 calls this a Reletting Fee and is equivalent to one months rent payment. When you signed your lease, you agreed that one months rent would be a liquidated damages charge to cover your replacement costs. Note that this IS NOT a lease cancellation fee or lease break fee. This means that paying this fee does not in turn terminate your lease and obligations thereunder. The reletting fee simply covers the time and effort required in procuring a new tenant and getting through the leasing process.
Process
Step 1: Notice to Vacate
To get started, you need to submit a notice to vacate form letting us know the date you’ll be turning over the property to us. This is the date you will be fully moved out, any move-out cleaning you’re responsible for under the lease will be completed, any other move-out requirements satisfied, and you will have absolutely no reason to need to come back into the property. You can either give us a firm date (because you know you’ll be out by this date whether we’ve found a tenant or not), or it can be a dynamic date (i.e. 14 days from new tenant deposit). In the latter, you decide how many days it will take you to move out and have the place ready should we find a new tenant. If you need a full month, then list 30 days. If you think you can do it in only a week, list 7 days. This method allows you to continue living in the property while we market it and you don’t have to start your moving operations until we have a tenant committed.
Submit your Notice to Vacate
Step 2: Re-letting Fee
Once we have your notice, we will charge you the reletting fee called for in the lease which is equivalent to one months rent. Log into your tenant portal and pay this charge.
Step 3: Begin Marketing
Once the reletting fee is paid, we will begin marketing the property to new tenants and conducting showings. After we have a tenant apply, get approved and pay the deposit, we’ll let you know that your obligation is close to coming to an end.
Step 4: You Move Out, They Move In
You’ll move out of the property on or before the date you indicated on your notice to vacate and will need to follow our standard Move-out Policy regarding general cleaning/carpet cleaning*. The property will be kept vacant for at least 5 business days between your move-out and the new tenant’s move in. You MAY NOT be in the property during this time and must relinquish possession otherwise it can delay the new tenant’s move-in thereby extending your obligation.
During this small vacancy gap, we’ll complete our move-out inspection, have needed cleaning done, and complete a move-in inspection for the new tenant. The new tenant will then take possession on their lease start date. Your obligation of rent concludes on the day before they move in. They will begin paying on the date they move in (full rent if on the 1st of the month; pro-rated rent if other than the 1st of the month).
(*Note: if your lease was executed after May 2020, we will handle cleaning of the interior and carpet cleaning for you with the cost being deducted from your deposit.
Step 5: Security Deposit Disposition
Your security deposit will be handled the same as it would if you had completed the lease without a lease break. We have up to 60 days in Colorado, or 30 days in Florida, from the date your lease ends to complete the deposit disposition statement and mail it to you along with any refund. Note that in a lease break situation, your lease end date for the purposes of security deposit disposition timeline will be the day before the new tenant moves in; not when you moved out. So for example, if you vacate on June 5th because you have to report to your new job shortly thereafter and we can’t get a new tenant to move in until June 28th, your lease end date would be June 27th. That adjusted lease end date is the beginning of the security deposit refund clock.
Assuming the place was cleaned properly, carpet professionally cleaned, no physical damages to the property, and you don’t have any remaining unpaid charges on your account, you’ll receive a full refund. Note that if your lease was executed after May 2020, we will have the interior cleaning and carpet cleaning performed for you and the cost will be deducted from the deposit as agreed to in the lease.
So that’s the process. As always, we are happy to answer any specific questions you have that this article did not address. In these lease break situations, our goal is to help you move on as quickly as possible with the least amount of financial impact as possible. Working together along with you almost always helps accomplish that goal!
