landlord insurance

One of the worst situations that a landlord may face is when their tenant wants to break their lease.

This situation isn’t fantastic for a landlord because it means that they face loss of income and the hassle of having to search for another tenant.

Sadly, this situation is becoming common in 2020 as many tenants across the State of California are facing life changing decisions, including loss of income, due to Covid-19 and landlords have to know when to allow their tenants to break their leases.

In this article we will break down some situations where a landlord should consider allowing a tenant to break their property lease.

What to Do When a Tenant Breaks the Lease

Before making your decision, review your state and municipality’s landlord-tenant laws. Lease-breaking laws vary, but many areas require you to mitigate damages—or find a new tenant. You typically can’t collect double rent. If your first tenant’s lease ran through May, but they left in February, you can’t demand rent for April and May if another tenant is occupying the property.

5 Legitimate Reasons to Allow Breaking a Lease

Tenants dealing with hardships might be a different matter. Job loss, for example, may be a good reason to permit breaking a lease.

In fact, sometimes you have to allow your tenant to break a lease agreement without consequence. Legal reasons to leave include active military duty as protected under the Servicemembers Civil Relief Act (SCRA) and victims of domestic violence, sexual assault, or stalking. Check your state and local landlord-tenant housing laws to learn more about your rights and obligations around lease-breaking and lease assignment policies.

How and when you decide to allow your tenants to break their leases will be up to the laws and your own personal opinions and business practices—but here are five times you might consider softening your policies.

1. Military orders

Active duty and reserve military service personnel, such as the national guard, can be transferred or activated very quickly. If they have to go, there is really nothing you can do, as federal (and often state and local) laws allow these tenants to break any lease. In fact, you might even be required to hold their property for them so it will be there when they return. Be sure you understand the potential ins and outs of these laws.

2. Job transfers

A job transfer is not the tenant’s fault, and it can often be a good thing for their family. Many times they have very little control over where the new job is located, so there is no reason trying to enforce your contract. It is very unlikely that any sitting judge would actually allow you to do so anyway.

As a cautionary measure, it is wise to place a clause in your lease that allows for the lease to be broken due to a job transfer so long as the transfer is more than 50 or so miles away. After all, you don’t want them to move if they are just transferring to another local branch.

3. Job loss

If a tenant loses their job and generally has no prospects of finding replacement income in the near future, it may be best to let them move on. You can’t wring blood from a stone. If a tenant has no income, your relationship will become more and more strained as resources dry up. Best to sever the relationship early, get your property back, and move on.

4. Extraordinary circumstances

Unfortunately, bad things happen to good tenants. We have had tenants get divorced or diagnosed with cancer or suffer some other type of misfortune. These types of circumstances can cause radical shifts in income and life outlook. Suddenly, rent is not a big deal if you are fighting for your life or trying to survive a bitter breakup. It is best to have a bit of sympathy here and let folks move on.

5. Ultra-irritating tenants

Some tenants are a pain in the neck. They seemed like a good fit during the application process, but once they move in, nothing is ever right. Nothing can be fixed, they constantly complain constantly, and they are late with rent. Enough is enough.

When is that point reached? It is hard to say, but sometimes it is best to just say something like, “I do not think this is the home you are looking for, as I cannot seem to meet your needs. I will be happy to let you out of your lease so you can find something that better fits your needs.” They will either move and you will be rid of the problem, or they will tone themselves down. Either way, hopefully your problem is solved.

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