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Picking Up The Pieces Of A Broken Lease: Consider Your Options....And Choose The Right Lease

Jan 24, 2008
There are many different situations that can result in the violation of the terms of a lease. Tenants can breach a lease by breaking rules, missing rent payments, abusing the rental property, or otherwise failing to hold up their end of the lease agreement. Alternately, tenants may elect to deliberately break a lease by moving out of the rental property before the conclusion of the lease period has arrived.

So, as a landlord, how should you choose to respond to a tenant who has violated the terms of the lease? Clearly, your best course of action will always depend on the exact circumstances of the situation you are dealing with. However, here are a few general guidelines that will help you make the right decision for addressing a breach of the lease agreement.

If Your Tenant Has Broken the Rules:

* First, assess the level of seriousness of the violation. Is the problem in question a major violation of the rules or a repeat offense? If so, a more severe penalty may be justified. If not, a written warning and a signed form promising future compliance may be the best option.

* Has the property been damaged? If so, you can bill the tenant directly, include the repair costs on the next rent invoice, work out a payment plan to allow them to reimburse you for the repairs over several months' time, or deduct the amount directly from their security deposit. If you have any reason to believe that the tenant may be considering a premature departure, it may be best to deduct the repair costs directly from the security deposit to protect your own interests.

* What is your legal vulnerability? If the tenant's actions are in direct violation of the terms of the lease, you will be more likely to receive a favorable judgment if the matter winds up in court. However, if the rule that has been broken is only implied, vaguely worded, or missing altogether from the lease, it may be best to hold off on eviction until you have amassed a paper trail of documented warnings to the tenant.

* Is your property or your investment at serious risk? If your tenant has been engaging in activities or behaviors that could imperil the property, the neighborhood, your cash flow, or your reputation, an eviction could be warranted. If repeated warnings have been issued and the situation has not been resolved, consider your options, double-check your documentation trail, and begin the process.

If Your Tenant Has Moved Out Before the End of the Lease Period:

* Again, consider the circumstances of the lease violation. Does the tenant have a compelling reason for moving out early, such as a family emergency, a financial crisis, or a divorce? Has the lease just begun, or is it close to completion? Have they tried to talk to you and work out an arrangement? If so, it may be best to try to compromise and find a mutually beneficial solution to the problem, rather than pursuing a legal course of action.

* On the other hand, if a tenant moving out before the conclusion of the lease period has failed to communicate with you, left the property in disrepair, appeared to be deliberately trying to evade paying you, or has otherwise acted in bad faith, it may be best to hold them to the terms of the lease and demand rent payment for the remainder of the stated lease period.

Technically, there is no such thing as breaking a lease by moving out early from a contract law point of view. By signing the lease agreement, they have obligated themselves to honor the contract for the duration of the lease period specified, so you are perfectly justified to attempt to collect rent due by any legal means necessary.

As always, each situation that arises must be carefully considered in context. Take a rational, measured approach, calmly identify pros and cons, and select the course of action that best reflects a balance between ethical property management practices and a respect for the legal rights granted in your jurisdiction. If you think things through carefully rather than responding rashly, you will always make the right decision.
About the Author
Read more articles from the author, Kevin Kiene, at his on-line resource for Landlords, http://www.ezLandlordForms. Take control today of your rental situation and create a Rental Agreement using state-of-the-art Lease Builder Wizard, the only Intelligent Document System for State specific Lease / Rental Agreements.
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