landlord pointing to his lease with tenant stressed out

September 28th, 2018

What are my options if my tenant breaks the rental agreement?

A broken lease occurs when either the tenant or landlord terminates the rental agreement before all pre-set terms are met.

For example, if you're renting out an apartment under a one-year lease, but decide to move out after only 10 months, you're breaking the lease. On the rental agreement it states when the lease-term is over, and how much money is owed to the lessor once that term ends.

In this post, we’re going to look at a few options landlords can take if and when a tenant ends their side of the agreement early.

In order to minimize damages, your lease needs to be written in explicit terms that outline the consequences of a broken lease. You can get help with drawing up a lease by hiring a reputable realtor.

Collecting rent owed

The only thing on your mind might be getting the money that’s owed to you based on the contract. If your tenant ends the lease three months ahead of the scheduled date at a $1,000 per month rental rate, you'd be owed $3,000 -- a decent sum of money.

Before the tenant ends things, they may look to re-assign the lease to a new tenant who would cover the remaining rent. If you’re okay with this, it should be written on the lease or discussed between parties, and put down in writing once accomplished. A replacement tenant can help protect you against financial losses due to a vacant unit.

You can state on the lease that you will take action against any tenant breaking the lease without finding a replacement, including a forfeiture of the rental or security deposit, the potential to take things to small claims court, or other legal action.

Including this in writing on the lease can discourage tenants from breaking the lease in the first place.

No notice

If the tenant leaves without notice, you are typically entitled to seize last month’s rent, and you might wish to take the tenant to court depending how much money is owing, though it might be hard to locate them.

You may wish to start looking for another tenant concurrent with your search for your former tenant.

Why the lease might be broken

Tenants are not always breaking a lease on purpose, as real life circumstances could throw things out of whack. It’s up to you to be sympathetic or understanding depending on these reasons.

A renter may get a new job elsewhere, experience relationship turbulence, have family emergencies, or even lose the job they once relied on. 

In these hands-tied instances, you can still suggest they find someone to rent out the unit before the lease term is up, and this is something you can choose to help with or not.

End of the day

It’s up to you to decide where to enforce things, and where to move on to the next tenant. You may choose to release them from the agreement in writing if their hands are honestly tied, or if they have found another, more secure tenant for the space.

You may wish to start things off with some form of notice if they have broken their lease agreement, then use communication and understanding to work out a solution.

If niceties aren’t your thing, you can use the legally binding lease as evidence in small claims court to recuperate your losses.