Hi From Rent Hello

    What to Expect When Ending a Lease Early Part 2

    by Cincy Project is licensed under CC BY 2.0

    As a landlord, a lease is design to protect both the tenant and the landlord. The tenant benefits as it controls the rent for the leasing term and requires the landlord to maintain the living situation for the tenant. The lease protects the landlord as the tenant has agreed to pay the rent payments for their duration of leasing contract or the term stated in the lease.

    Now, even with a leasing contract, there is always the possibility that the tenant may decide to vacate the lease early as life is both unpredictable and occasionally messy. This is why it is best to include a “Breaking the Lease” clause in your lease, so if this situation does occur, the guidelines and responsibilities are already outlined. Who is responsible for finding the new tenant, how much notice is required and what happens to the security deposit are all concerns that can be addressed in this clause. Consult your local tenancy act to determine what regularities and restrictions are standard in your area.


    However, if there is not a breaking the lease clause, hopefully the landlord tenant relationship is strong enough that the tenant is comfortable informing their landlord about the desired change in living arrangements with plenty of notice (60 days is desirable), as it is the tenant’s responsible to cover any rent payments until a new tenant take procession of the property.  However, the landlord is required to show good faith in finding a replacement tenant and can’t charge both the new and vacating tenant for the same rental period. This is called double dipping and is illegal.

    There are two main options when it comes to finding a replacement tenant. The tenants can be responsible to find a new tenant and lease reassign. This means the tenant is responsible for marketing cost and the time needed to screen potential the tenants. However, if the landlord is doing the advertising and spending the time to screen tenant and show the space, they are actually allowed to charge the vacating tenant a fee called liquidated damages.

    siigning contract

    Liquidated damages are intended to keep the landlord whole solely with regards to the cost of finding a new tenant because this cost was not expected to happen until the end of the lease.  Liquidate damages terms must be agreed upon in the original lease for a landlord to make this legal claim when the tenant vacates early. The amount charged should be a reasonable estimate of direct and indirect costs (ie: advertising, credit checks, travel to show the unit, forms and landlord’s time).  Please consult your local tenancy act for more information on liquidate damages to make sure you know the standards and regulations for your area.

    As life can be unpredictable at the best time, a lease should always been keep between a landlord and the tenant. It’s wise to included a “Breaking of the Lease” clause in the lease that included the terms of liquidated damages payment if the situation occurs and the tenant vacates the lease early. To make sure that all bases are covered, it’s important to be familiar with the local tenancy act about the terms and conditions specific to your area. This means that if a worse case scenario does occur that the landlord is covered and won’t be at a loss of that rent payment.


    For more information on what to expect when a lease is ending early, check out these links below.



    What to do When Your Tenant Wants to Break the Lease

    The Solution to a Broken Lease: The Buy-Out Clause


    Follow by Email

    Tags: , , , , , , , , , , , , , , , , , , , , ,


    Leave a Reply

    *Required field