Property Management Tips – How to Deal with Tenants Who Want to Break Their Leases

It doesn’t matter if you’ve owned rental properties in Portland for years, or you’re just getting started, one thing that you can expect to happen at some point during the years that you own rental properties is encountering a tenant who informs you that they are planning on breaking their lease.

Although this situation is unpleasant, the reality is that you can smoothly deal with this situation by following these tips.

Tip #1 – Find Our Why They Want to Break Their Lease Early

One very important thing to do before anything else is to find out why your Portland Oregon Renter wants to break their lease.

If they are a member of the military and have been transferred more than 50 miles away, they legally have the right to break their lease if they give you a 30-day notice.

Are they a victim of domestic violence? If their situation has been documented then you should be open to them breaking their lease especially if their own personal safety is at stake.

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Tip #2 – Make Sure Your Lease Has an Early Termination Clause

Does your lease have an early termination clause? If so, the easiest way out of this situation is to inform your tenant that they must pay your early termination fee in accordance with your lease. This fee typically equals two months-worth of rent plus any additional fees that you need to charge to get the property in rent-ready condition again.

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Tip #3 – Offer Your Tenant A Buy Out Option

Let’s say that your current lease doesn’t have an early termination clause, in this case, you should consider offering them a “buy out option”. This is usually two-months-worth of rent and will allow you to have the cash flow that you need until you can find another tenant.

More Tips For Dealing With Tenants Who Break Their Leases 

It may come as a surprise, but it’s technically legal for a renter to break a lease for any reason. In many states, they just need to give at least 30 days’ notice.

This is where your lease agreement comes into play. It should spell out the financial consequences for the renter leaving early, as permitted by your local laws and regulations. At least one month’s rent is the typical minimum, and, in some cases, the tenant may be required to pay the remaining rent for the rest of the term.

So, if four months are left on the lease, this clause in the lease agreement says that the departing tenant must pay four months’ rent or for as long as the property remains vacant. But many jurisdictions require you to find a new tenant in a reasonable amount of time, rather than purposely leaving it open to collect rent from the vacating party. You also cannot penalize the renter by charging more than your actual damages.

Require your tenant to give notice in writing

Regardless of whether your tenant has a legal reason for breaking the lease, as soon as your tenant informs you of their need to break a lease ask them to provide a written request to terminate early, detailing their reason for leaving. Explain to your tenant the course of action for ending the lease early, as required by the law and your rental agreement.

Hold the tenant responsible — within reason

Just because the tenant is vacating the property doesn’t mean they aren’t responsible for the home. The lease is a legally enforceable document stating that the landlord has given up possession of the unit for a specified amount of time in return for rent.

The renter may want to find someone to finish out the lease as a sublet. There are pros and cons to subleasing, and many leases forbid it. For your protection, the lease should include a subletting clause that requires your written permission before a renter can hand over the place to someone else. Even if the leaseholder finds a subletter, they retain the responsibilities for damages and payments until the end of the lease. It’s also possible they’ll find a replacement renter for you to screen. If all goes well, you’ll sign a new lease with the new renter — a win-win all-around.

While the leaseholder has a legal responsibility, most states require landlords to make a reasonable effort to find a new tenant; purposefully leaving the unit vacant to collect rent from a tenant who’s broken their lease is not usually permitted.

Know your rights and responsibilities as a landlord

A tenant breaking a lease prematurely might put you in a tight spot, but you can always seek legal advice. Attorneys know the ins and outs of the landlord laws in your state and can help you determine the right course of action. Be sure you’ve read through your lease agreement carefully — ideally in person with the tenant. Landlords and tenants alike can miss details in the fine print, and it’s in your best interest to be fully informed about your lease as well as local statues.

In the end, your best defense is a good offense. Keep your rental units in good condition. Be cordial and reasonable. And whatever the landlord experience throws at you, attorneys in your area can help you navigate local laws and proactively make sure your lease terms protect you.

Contact Rent Portland Homes

To learn more about the Portland Oregon Property Management services we can offer you contact us today by calling (503) 515-3170 or click here to connect with us online.

 

 

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