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Lease = Contract

System - Friday, April 24, 2015
It is not unusual for a tenant’s situation to change in the middle of the Lease creating the need for the tenant to move out early.  Sometimes there are specific provisions spelled out that allow the tenant to early terminate by following a check list of requirements, often including monetary compensation.  Often, though, the contract is for a specific duration without the ability to terminate early.  What happens then?
  
The tenant would either have to pay the remaining balance left on the contract or try to renegotiate the terms.  Renegotiation the early termination provision with the owner and/or landlord agreement is the only legal way for a tenant to end a Lease in this situation.  Just because the tenant moves out doesn’t automatically terminate the Lease.  Often when this happens, the tenant leans to the landlord or property manager to assist them in “forgiving” the remaining term.  Unfortunately, regardless of the tenant’s new situation, allowing the tenant to early terminate without consequences may not be a viable option.    The tenant should realize this is nothing personal.  

If the tenant “abandons” the lease, additional expenses may be charged to the tenant.   For example, utilities must remain on, especially in the winter months, to protect the property.  The activation costs and usage bills for these utilities can be billed to the tenant.  Other expenses that could be billed to the tenant are the cost to place a new tenant, often called a Tenant Procurement Fee, which is typically equal to one month’s rent.    These are just to name a few.

A tenant could face many repercussions by not satisfying the terms of the Lease.  Many professional landlords now report to a credit reporting service and/or Rent Bureau credit reporting.  Rental service providers in the future may also consider the tenants too high a risk and decline their application.  Additionally, a landlord can sue the tenant in civil court and pursue the amount owed with a judgment and garnishment of wages.  And, depending on the reason for the need to move early, where the abandonment was entered into deliberately and voluntarily  (like buying a home in the same area as opposed “uncontrollable”  like a job loss or major medical illness),  the awards to the owner will be significant and imminent. 

Breaking a contract, any contract is not a matter to take lightly. And a Lease is nothing more than a contract.  Should a tenant find him or herself in this situation, and are unable to renegotiate the terms, try setting up a payment arrangements.  


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