What to do if my Tenant Breaks the Lease Agreement?

Owning a rental property can come with its fair share of complications or difficult situations, especially if you’re not experienced and self-managing your rental property

As a professional property management company, we know all too well one common issue self-managing landlords deal with is their tenant breaking the lease agreement.

So, if you are a landlord or rental property owner and have not dealt with this situation, chances are you’ll encounter it in due time. If your tenant breaks the lease, it may affect your property and financial situation and cause a lot of time to find a new one.

What happens if your tenant vacates early and broke their lease agreement?

First, you’ll want to look at your lease agreement and determine if you already have a lease default or early termination clause written in your lease agreement. If you do, you will need to follow the terms of your lease agreement.

If you don’t have this written into your lease agreement, you’ll want to add this as soon as possible. Having a roadmap already in place will help with knowing what to do if this happens and allow the tenant to understand that they are signing a contract they are responsible for rather than a short-term obligation.

Once you’ve determined your lease default penalty, you’ll want to ensure that the terms are followed. For example, if you require two months to break the lease agreement, you’ll like to receive this before your tenant vacates the premises.

What happens if my tenant vacates without notice?

If you have an irresponsible tenant that provides no prior notice, they will be breaking their lease; it may be more challenging to collect the lease break fee.

Regardless, if you cannot get a hold of your tenant, you’ll want to make sure you complete your security deposit disposition which is a notice you need to provide to claim their security deposit.

You’ll want to include your lease break fee on the security deposit claim form. Each state has different security deposit requirements, so you’ll want to understand this first.

Once your tenant receives your security deposit claim form with the due amount, they will either pay or not. One benefit of using a professional property management company is they will typically send the tenant to collections to receive the outstanding balance due.

As a professional property management company, we understand that sometimes a tenant needs to move due to job relocation, family reasons, etc. Our tenants always provide sufficient notice and provide the lease default fee before being released from their lease obligations.

What are common lease break fees?

Typically, the most common lease break fee is two months lease break fee and a forfeited security deposit.

Another standard lease break fee or term in a lease agreement is that your tenant is responsible for ongoing rental payments until you find another tenant to replace your current one.

What are standard lease break fees for your tenant?

How to reduce your tenant from breaking the lease agreement?

There are ways to reduce or mitigate the risk of unreliable tenants. Here are a few ways to reduce your tenant from breaking your lease agreement.

1. Tenant Screening

Single handily, the most crucial aspect of owning and managing a successful rental property is to screen your prospective tenants properly.

2. Lease Default or Early Termination

A solid lease agreement for your rental property will help reduce rental property risks. If you don’t have this section in your lease agreement, you can permanently attach an addendum to your lease stating your early termination requirements.

3. Leasing Red Flags

– If you are showing your rental home to prospective renters, there are specific red flags that can help determine if they will be a reliable tenant. 

For example, If you are showing your rental property and a prospective tenant asks what happens if they need to break their lease agreement. Most likely, they will break the lease sometime during the lease term.

So what to do if your tenant does break the lease?

You’ll need to follow the terms of your lease agreement; otherwise, if you don’t have a lease default section in your lease, you’ll want to research what your state requirements are.

For example, here in the state of Florida –  Florida Statutes 83.595 states a landlord can charge up to 2 months of rent for lease default or liquidated damages.

Make sure you check your state requirements to see what you can charge your tenant for breaking their lease agreement. 

IMPORTANT TIPS: if your tenant does break the lease agreement

As a professional property manager in Orlando, Florida, we recommend never accepting the following when your tenant breaks the lease agreement.

– Tenant Finding a “Replacement”

Never allow this option, as your tenant will end up posting on Facebook and other social platforms trying to find a new tenant to take their place. If the new tenant is not getting correctly screened, this will only lead to more issues.

– Can I “Sublet” the Property?

This will become a nightmare and cause more lease problems and potential damage to rental property. If your tenant has someone else move into the property and continue to pay you rent. What happens when you don’t receive rent? How are you going to evict a tenant that is not on the lease agreement?

– Stick to your lease terms

Always stick to what is stated in your lease agreement. Your tenant signed a legally binding contract, so there is no room for negotiation. If you have a solid lease agreement, it is always best to inform your tenant politely to read over the lease.

– Consider hiring a property manager.

Suppose you want your rental property to run like a well-oiled machine rather than with constant issues and stress. In that case, you may want to consider hiring a professional property management company

Should you hire a professional property manager?

Rental Property Manager Summary

Every rental property owner would like a long-term tenant who stays for years without interruption. Unfortunately, that is not always the case in the world of property management and owning an investment rental property.

Eventually, one of your tenants will need to break their lease agreement, so it is essential to know your options.

If you have any questions feel free to Contact Us at The Listing Real Estate Management, we’re your boutique property management company in Orlando, Florida. Cheers!