How to Handle Tenants Who Ask to Break their Lease

The perfect scenario looks like this: A high-quality tenant rents your available unit, pays their rent promptly, and renews their lease year after year. The reality of the situation is that people come and go, and vacancies happen. And, from time to time, tenants ask to break their lease. So, what do you do?

Finding another tenant is no small task. It takes numerous hours to advertise an available unit, screen prospective renters and show it to interested parties. Every day a property sits empty is a day of lost income.

Typically, with a signed lease in hand, your tenant cannot break the lease, unless:

  • You come to an agreement with the tenant regarding an early termination date.
  • You allow the renter to assign the rental property to another person.
  • Your tenant is a victim of abuse or domestic violence and needs to move out.
  • You’ve neglected your duties as a landlord and the unit is not habitable, or you’ve entered illegally, etc.
  • Your tenant has a disability that prevents them from continuing to live in the unit.
  • Your tenant has special needs, like the need to move into a care facility.

Breaking the Lease with Notice

Your tenant signed a lease that legally binds them to the terms of the lease. However, people break leases for any number of reasons. They may be forced to move due to losing a job, or conversely, landing a new job in another province, or due to divorce.

If your tenant approaches you and asks to end their lease the best thing you can do is to talk to them and find out why.

Loss of Job

If your tenant has lost their job and is worried about their ability to pay their rent, it makes sense to be sympathetic here. Talk to them and ask them if they think they will be back on their feet soon. Do they have any friends or family who could help them make ends meet until they get a new job? On a case-by-case basis, you may opt to let them defer their rent or have a temporary discount. Do you have an alternate, less expensive unit that is available? Be firm but fair. You are, after all, a business not a charity.

If your tenant no longer has the income (and won’t have that income in the foreseeable future) that would allow them to pay rent, allowing them out of the lease is in your best interests. It’s much less time consuming, taxing, and costly than pursuing an eviction or getting a debt collector involved.

Divorce or Illness

Similarly, if your tenant is going through a divorce or serious illness, it can have a negative impact on their ability to pay. Once again, it’s best to be compassionate. In some cases, during a divorce, one of the people may stay in the unit and get a friend or roommate to help pay the rent. If they cannot pay, set a move-out date and encourage the best possible departure.

If you allow them to sublease, you will also need to state what action you will take if the lease is broken and the tenant does not find a replacement tenant. Use your communication portal to keep a written record of all interactions with your tenant. Any new agreement should be put in writing and signed by both parties.

A solution like Property Vista’s tenant portal is invaluable when it comes to having a centralized repository of all leases, communication and property inspection reports (with photos). It ensures a digital record of all communications, which will be needed if you need to go to your local rental board to file for an eviction. If you are looking to improve your operations, check out our pricing and arrange a demo.