Many landlords and tenants use a lease termination letter to end their lease early for a variety of reasons. Landlords may want to sell the property, or perhaps the tenant has not followed the terms of the lease, and the landlord wishes them to move out before the end of the lease.
Tenants who sign a one-year lease and then continue renting from the landlord without renewing the lease are living on a month-to-month lease (Tenancy at will) under the same terms of the lease. In either case, the tenant or the landlord may decide at some point that they wish to move, or the landlord wishes to re-rent the unit and will issue a lease termination letter.
What Is a Lease Termination Letter?
A lease termination letter is a formal letter usually prepared by the landlord requesting the tenant to move out of the rental unit and terminate the lease. There are a variety of reasons for issuing a lease termination letter. These include:
- Early cancellation of the lease by the landlord
- The tenant has not followed the terms of the lease
- Termination of a lease that has evolved into a month-to-month lease agreement
- Tenant wishes to terminate the lease (Landlord must approve)
If the lease does not have any provisions for canceling the lease, the landlord must approve the termination. If there are provisions in the lease for cancellation or termination, these rules must be followed to terminate the lease. Tenants may also initiate a lease termination letter. They may need to move for many reasons; however, they are obligated to pay rent based on the terms of the lease until the landlord approves termination of the lease.
Terminating a lease can be as simple as sending a lease termination letter with proper notice, and the tenant moves out on the requested date. The other extreme is when the termination of the lease becomes an eviction, and the request to move out must be reviewed in court, leading to eviction by local police. This is an extreme example, and both parties want to avoid these situations.
How to Write (Month-to-Month Lease Termination)
Lease termination letters must contain some basic information for both the landlord and the tenant. Start by reviewing the original lease agreement and check for any terms that refer to early lease termination or termination of month-to-month lease termination. These requirements will guide you in terms of what can be considered in terminating the lease.
All leases can be terminated. It just takes both parties to agrees to the terms and conditions. Both tenants and landlords should expect to negotiate the final lease termination agreement. Depending on the situation, the landlord may offer incentives for the tenant to terminate the lease, or the tenant may forgo the security deposit to terminate the lease early.
All states have defined a minimum termination notice required when terminating a lease. Some can be as short as 3 days, while many are 30 days or one month. Check your state’s requirements before writing the lease termination letter.
The basic elements that should be included in the letter are:
- Landlords Name – individual or company name
- Tenants Name – as per the lease agreement
- Lease Agreement – indicate the original move-in date and the end of the agreement noted in the lease
- Vacate Date – the date the tenant is being asked to move out of the property
- Forwarding Address – allow space for the tenant to provide a forwarding address for notices and security deposit
- Termination Reason – explain why the agreement is ending. Include any instructions for curing the agreement, e.g., payment of late rent, repair of damages, etc.
Sample – Lease Termination Letter
The following is a lease termination letter sent from the landlord to the tenant in situations where the landlord is terminating a lease. The same template can be used by the tenant to advise the landlord that the tenant will be terminating the lease. A second sample is provided with the changes made, reflecting the changes needed.
Delivered (Circle One)
- Personal delivery
- Posted delivery
- Substituted delivery
- First-class mail
- Certified mail
- Registered mail
(Name of Landlord)
Dear (Name of Tenant)
This letter is to advise you that the lease agreement is being terminated as of (Date} for (Address of Property), and the property will be vacated –(circle one)
- Before the expiration
- End of the lease on (Date)
The lease is being terminated because (Circle One):
- We are choosing to not renew the lease
- The property has not been properly cared for
- A clause has been breached in the lease agreement
- The property is being sold
- The property is uninhabitable due to a natural disaster
Please provide a forwarding address for the security deposit to be returned and any notices as required by local and state laws. (Add your forwarding address here)
Please contact us if there are any questions or if additional information is needed.
Lease Termination Letter (Word Template)
How to Terminate a Lease?
Terminating a lease by either the landlord or the tenant can be very easy, or it can be taken to court to file an eviction notice if there is a disagreement about the lease, overdue rent, or damages. The steps involved in terminating a lease include:
- Determine the lease type
- Contact the Other Party
- Send a Notice
- Resort to Legal filing in Court
Determine the lease type – review the lease and determine the conditions and requirements as stated in the lease for terminating a lease. Note whether this is a standard lease, a month-to-month lease, or a sublease agreement. Each type has stated requirements as well as legal requirements.
Contact the Other Party – good communications can often resolve any issues before they become serious and need to be referred to court for eviction. Be prepared to state the reasons for terminating the lease. Determine the period for providing a notice as required by the state and offer a date that coincides with the legal requirements.
Send a Notice – formally send a written letter to the other party indicating the lease is being terminated. The receipt of the letter must be documented to demonstrate that the letter was received by the other party. This is required if the case must be reviewed in court.
Negotiate – often, issues such as overdue rent, repair of damages, or breaching of clauses in the lease can be resolved during negotiations. If successful, this approach can save both parties a great deal of time and money. Attorneys and court proceedings can be overly expensive.
Resort to Legal file in Court – landlords may have to file an eviction notice in court, and the tenant is removed from the premises by the sheriff if they will not vacate the premises willingly. Tenants may file in small claims court to seek damage recovery and to absolve themselves of any claims by the landlord.
Common Situations for a Lease Termination
There are multiple reasons why a landlord and a tenant would want to use a lease termination letter. Both parties have strong intentions of fulfilling the requirements of the lease at the time of signing, however sometimes life gets in the way, and circumstances change. These are some of the reasons you might want to terminate a lease earlier than planned.
From the Tenants Perspective
- Getting married or a new job requires you to move
- More space for a growing family or pets
- Unsafe living situation
- Repeated maintenance issues, e.g., AC stops working, heater does not work
- Premise unusable due to fire or storms
- Military service leave
- Health problems in the family
From the Landlords Perspective
- The premise is being sold
- The premises is being foreclosed
- Renovation of the premise
- Criminal activity
- Overdue rent or lease violations
- Natural disasters – flooding, earthquake damage
Some of the popular frequently asked questions that landlords and tenants have related to Lease termination letters.
Check your lease agreement! Some require that official notices be sent; otherwise, your lease agreement may move to a month-to-month rental agreement. Warning from the tenant to the landlord providing advance notice that the tenant intends to move out provides time for the landlord to find a new tenant. Likewise, for the tenant, the landlord can provide advance notice to the tenant, giving them time to find a new place. Note: you must meet state guidelines for notices.
Neither party anticipates needing a court order to deal with lease termination issues; however, in situations that migrate to the courts, it is important to have documentation showing that you have followed the proper process and a registered lease termination letter is needed to support the process.
Tenants also can document failures by the landlord to meet the terms of the lease or make repairs that are needed. Tenants may decide to leave earlier than the lease calls for due to maintenance issues, personal issues, and professional needs. A lease termination letter should be used in these situations.
If you need to appear in court for an eviction, the court is not going to look kindly at landlords who have not prepared and sent a lease termination letter. The court must ensure that the tenant has received adequate notice of the lease termination and has had an opportunity to cure whatever the issues might be. Each state has defined an appropriate time for notice by landlords to tenants, and this period must be followed before an eviction notice being upheld by the court.
The consequences for landlords can be:
• Loss of money – overdue rent, loss of security deposit, court fees, and fines
• Loss of time – finding an attorney and attending court hearings
• Stress – a tenant, may initiate a lawsuit, loss of rent, ability to meet monthly cash flow for utilities, taxes, and mortgage
The consequences for tenants can be:
• Loss of money – Losing security deposit, payment of overdue rent, and rent penalty to end of lease
• Loss of time – finding a new place due to poor rental record
• Stress – a lawsuit for rent owed to landlord, bad credit rating for as long as 7 years if there is a credit judgment by the court
In most cases, terminating a lease early does not affect your credit rating. However, some situations can affect your credit rating, making it difficult to find future rental accommodations and be approved for personal loans, credit cards, and mortgages.
A lease termination that is caused by overdue rent payments, an eviction ruling in court, or even damages caused to the premises with a court ruling in favor of the landlord can lead to a lower credit rating. Failure to meet your payment obligations in any situation can lead to negative reports on your credit report.
Credit implications can also impact landlords when court rulings are in favor of the tenant; all these situations are rare.
There are ramifications to breaking a lease as well as being evicted for both the landlord and the tenant. Every situation is different and should be evaluated based on the circumstances and the short and long-term impacts on your public record and credit rating.
The following list of impacts can apply to a variety of situations. Assess each one to determine if it applies to your situation and make the best decision for you and your family.
Always attempt to negotiate a solution that achieves your objective. Also, remember that there has to be something in every negotiated deal for both parties; otherwise, most people will be unable to reach an agreement.
Impact on a Tenant
• Eviction – difficult to find other accommodations with a public record of eviction, loss of money due to court fees, loss of security deposit, loss of time, and public embarrassment of being evicted. There may also be a negative impact on credit ratings, making it difficult to obtain a loan, be approved for future leases and credit cards.
• Break Lease – the landlord may go to court to recover lost rent, loss of security deposit, may need to pay rent until the end of the lease
Impact on Landlord
• Eviction of Tenant – court fees, legal fees, a lawsuit from the tenant, process time to issue letters of eviction and proceed through the court system, reputation as a tough landlord (can be positive or negative), recovery of damage costs, and overdue rent, solve noise issues or criminal issues.
Landlord Breaks Lease – may owe the tenant for damages, i.e., costs to find another place and moving costs, lost rent, the tenant moves out early, making the unit available for other purposes, etc.
A lease termination letter can be issued by either the landlord or the tenant for a variety of reasons, all having a financial and personal impact on the parties in one way or another. By far, the best approach is to negotiate a mutually acceptable solution for both parties.
However, in situations where negotiation fails, the landlord may have to pursue the eviction route through the courts, or the tenant may need to file a civil suit in small claims court to attempt to obtain the solution they require. There are legal fees and court costs associated with this approach, and often one party ends up losing money when a court hearing is scheduled. Negotiation is always preferred as a solution.
Every state has regulations regarding how much time or notice must be given to tenants when they are being asked to terminate a lease. Before sending a lease termination letter, investigate these requirements to ensure the process is followed; otherwise, you may lose a great deal of time when you start over.
Verbal discussions typically do not count in a court proceeding, while a documented lease termination letter that has been delivered and registered carries much more weight with the court. When sending a lease termination letter, use registered mail and obtain signatures from the tenant or landlord to demonstrate that the letter was sent and received.