“What To Know About Termination Of Lease” written by Mike Marko.
Are you a property manager who wishes to terminate one of your tenant’s lease agreement?
In a rental property business, you are lucky if all of your tenants are good at paying their rent and in taking care of the rental units. But, this doesn’t mean that you won’t encounter tenants who are irresponsible renters. These irresponsible renters are those who can’t pay their rental dues on time or those who caused great damage inside your property. The reasons are endless.
If you have a tenant who’s causing you a problem during their lease term or if you have tenants who wish to vacate your property, then you should know what to do next. In this article, I will share information about the termination of lease process.
Process Of Termination Of Lease
Terminating a tenant that has signed a fixed-term lease or contract is not that easy. In addition to showing a breach in the contract, you will need need to have valid reason detailed in the lease contract or agreement first before you could proceed on trying to terminate or evict that tenant.
Once you have a valid reason, like not paying rents or causing undue damage to the property, there is a process you need to follow before you can terminate that tenant. The process of terminating a lease and evicting a tenant begins with a termination notice where you legally have to give that tenant a chance to remedy the violation..
If the tenant doesn’t remedy the violation or change the behavior or habits that caused the termination notice, but the tenant still won’t leave the rental unit, this is the time where a property manager could start the process to evict the tenant.
Acceptable Reasons For Termination Of Lease
To terminate a lease you have to have actual documented reasons or need to show cause that the tenant has violated the terms of the contract or lease. As a property manager you have no right to just kick out a tenant whenever you want to. There are state and federal laws and even a lease agreement which provide the regulations preventing you from terminating tenancy without cause. To proceed with termination of a lease you should have valid reasons that will permit you to proceed in terminating the lease.
Here are some examples and valid reason used to terminate a lease:
- If your tenant fails to pay rent
- Your tenant is consistently late paying rents and this is listed as a violation or breach of contract in the lease agreement
- If your tenant violates a clause in the lease of the rental agreement. For example: If your tenant violated a no-pet clause or subleasing without your permission
- If your tenant violates a responsibility imposed by law. For example: If your tenant caused a serious damage to appliances or the property, participated in illegal activity, or interfered with other tenants’ peaceful enjoyment of the property
There are also some instances where a termination of lease can be permitted by the law if the action results in the tenant breaking or breaching the terms of the lease agreement:
- If your tenant lost a job AND fails to pay rent
- If your tenant wants to move to a better accommodation, depending on early terms the tenant could be liable for lost rents if this occurs
- If your tenant is complaining about a bad roommate, remember the lease is with the person who signs it-if both roommates are on the ease you might allow for a one time change of roommates if the new roommate qualifies for the rental process.
- When terminating a lease early is allowed by federal or state law – Laws may differ from one state to another. However, the federal law allows a tenant that enlists in active military service to terminate a tenancy early. There are also some states which allow a tenant to legally break a lease if planning to move to an elderly care facility or because the present employer of the tenant moved to a new location.
- The landlord violates a term of the lease – In many states, when a property manager violates the health and safety codes, this means that the living condition of the tenant is unbearable and this could result in a “constructive eviction” of the tenant. Depending on the state law, the tenant is allowed to move out even without giving notice.
- Significant damage to the rental unit prohibits occupancy – When a natural disaster or some other occurrence greatly damaged the rental unit, a tenant has the right to move out even before a lease is up.
Types Of Termination Notices
Terminating a tenant from leasing is not an easy process and if not done correctly could result in legal action against your property management firm. Once you have a valid reason for the termination of lease of one of your tenants, the first thing you should do is to give that tenant a termination notice to give the person a chance to fix the violation.
The termination notice may be the result of one of the following:
- Pay Rent or Quit Notice – The tenant must pay rent within a set time (usually three to five days) or vacate the rental unit.
- Cure or Quit Notice- The tenant must correct a violation of the lease or rental agreement within a certain time.
- Unconditional Quit Notice – The tenant must vacate the premises without the opportunity to cure the violation or pay the rent. Most states only allow this notice when the tenant
- Tenant repeatedly violated a significant lease or rental agreement clause
- Tenant has been late with the rent on more than one occasion
- Tenant seriously damaged the premises, or
- Tenant is or has engaged in a serious illegal activity, such as drug dealing on the premises.
There are numerous reasons and forms of termination notices, it is best to check with a lawyer or review local and state laws prior to proceeding with the process to terminate a lease.
After your tenant receives the notice of termination and the tenant still did not leave the property, this is the time for the property manager to file an eviction lawsuit against the tenant.
How To Evict A Tenant?
Eviction of a tenant may take place after the property manager sends a notice of termination to the tenant. The process starts if the tenant still doesn’t vacate the rental unit upon receiving the termination notice.
Eviction is ultimately the removal of tenants and their properties through the help of a law enforcement officer. But most often it often doesn’t come to that.
Filing For An Eviction
When a tenant doesn’t leave your rental unit after receiving the termination notice, you can start the eviction process. You must file a complaint with the court and wait for the tenant’s answer. Often the result is a court date where the court will hear both sides of the story. The court will decide who shall win the case based on the answers of the tenant and the complaint given by the property manager.
The eviction process varies from state-to-state, and you may need a lawyer in this process. Know your local laws.
In my experience, the tenant will often leave the property soon after the eviction is filed (to avoid an eviction on their record) or after the court awarded the property manager the winning verdict. Though, not all tenants will “go quietly into the night…”
If the property manager wins the case, the property manager will be legally allowed to reclaim the property. There are some instances where a tenant will still refuse to leave the property even after a property manager wins the case, and even after receiving a notice of eviction. At times like this, a law enforcement officer may remove the tenant.
The physical eviction process varies from state-to-state, and you may need a lawyer to help you with this process. Know your local laws.
Final Thoughts On What To Know About Termination Of Lease
There is a certain process which property managers should follow in termination of lease for undesirable tenants. In this article we talked about what to do if you have a valid reason for terminate a tenant. We also talked about that tenants should also be allowed to fix their violation in a form of a termination notice.
If the tenant did not fix the violation and did not leave the rental unit, then that’s the time when a property manager can attempt to legally remove the tenant.
Next time you have a bad tenant on your property, remember the points that we discussed in this article before you proceed on that tenant’s termination of lease.
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