So Your Tenant Wants to Break Their Lease?

System - Wednesday, June 28, 2017
tenant wants to break lease

Your real estate investments thrive on occupancy. Because of this, it’s incredibly frustrating when tenants want to break a lease before it expires. What should you do in a situation like this? The tendency would be to decline the request and demand that the rest of the lease be paid in full. After all, you have rights as a landlord, and one of those rights is to hold your tenants to finish out their leases. 

But situations like this are also complicated, and it’s important to understand the ins and outs of what to do if your tenants want to break their lease before making a final decision.

Key Decision Factors

It’s always about cost versus benefit when you think about letting a tenant break a lease. Of course, a vacant unit is a cost — you’re paying for that empty space until someone moves in. But there’s also a cost to dealing with an unhappy tenant who is not allowed out of their lease, and there can sometimes be damage to your brand reputation — a bad review on a website, other tenants moving out because of the way you handled a situation, etc.

There are reasons that should compel you to let a tenant out of their lease. These reasons are myriad, but there are a few common ones that should be top of mind at all times, including:

  • Military Service: If your tenant is called on to active duty in the military, there’s little benefit in forcing them to stay. They must be somewhere else to serve the country, and you should let them go. This is one of the potential brand damagers. If it gets out that you’re holding the feet of military personnel to the fire, it’s not going to inspire others to want to rent from you.  In addition to these reasons, there are a variety of laws that must be considered.  For example, the Service Members Civil Relief Act (SCRA) plays a critical role in lease terminations involving active duty service members.  Always be mindful of possible legal implications of the wrong decision.
  • Job Transfers: If someone’s getting moved to a different location for work, it’s hard to make them stay and pay. Do inquire about any programs their company may have for relocation. Sometimes benefits help cover costs associated with breaking a lease.
  • Personal Challenges: If your tenant has lost a job, lost a loved one or dealt with some other extraordinary circumstance, it can feel particularly heartless to keep them in their lease. Again, it's also a risk to your brand if it gets out online or elsewhere that you're forcing people with challenges to stay in their agreements.

Also, consider letting anyone who’s a headache out of their lease early. It can be a surprise benefit if the person who’s always burning up the phone lines with requests for inconsequential repairs and maintenance wants to move out.

Claim Your Rights — to a Point

As a landlord, you have certain rights, as does your tenant. Take advantage of these rights to protect yourself and your investment, but also know where to draw the line. Just because you have a right doesn’t mean you need to exercise it. Many times, the solution that’s best for both parties is somewhere in the middle of a compromise.  Many times the practical, amicable approach achieves far greater results than the hardline, no compromise approach. 

Take each situation in stride and make the best possible decision for your brand and your bottom line. If that means claiming a right, so be it. If it means letting someone out of their lease early without dreadful penalty, that can be the best decision, too.

Why Choose Harrisburg Property Management Group? 

Should I let my tenant break the lease? If you find yourself wondering about this, perhaps the better question would be: Should I hire a property management group to make these decisions for me? There are many reasons to allow a tenant to break the lease, and there are just as many reasons to say "no" when they want out. At Harrisburg Property Management Group, we have deep experience in those situations and in making the key decisions they require.

Are you ready for stress-free property ownership in Harrisburg? Call on Harrisburg Property Management Group, and get the expert managers your property deserves. 

Contact us today about property management in Harrisburg, Mechanicsburg, Hershey, and throughout Central PA.

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