How To End A Lease Agreement — Steps To Draft An Effective Letter

Understanding a Lease Termination

Lease termination is when a tenant vacates the property or the landlord demands that the tenant vacate prior to the date specified in the lease. Prematurely terminating a lease agreement can happen for a number of reasons. For instance, a landlord may want to sell the property, or the tenant may need to leave the premises earlier than expected.
If relocation clauses are included in the lease, either parties may have grounds to terminate the lease early. If the tenant needs to move out before the agreed upon term has expired, the tenant will go through the same processes to write a letter to break the lease as the landlord would. Relocation clauses are common in corporate leases when a company needs to discontinue operations in an area because a new office will be opening in a different location.
Some common situations in which a landlord or tenant would like to prematurely end a lease include: If a financial hardship occurs within the tenant’s life that is beyond their control , such as an unexpected job loss, they may request to terminate the lease so they won’t be financially responsible for the duration of the lease. When situations arise that are out of the tenant’s control, it’s best to have an open discussion with the landlord about options for early termination.
In most states, tenants must provide a 30 or 60-day notice prior to vacating a rental property and the landlord can deduct the costs of any repairs from the last month’s rent. If any damage exists to the property, tenants may lose part of their security deposit. However, if there was an appendix or a clause in the lease that stipulated termination payments, then the end of the tenancy must abide by this agreement. If there are no termination clauses in the lease, the tenant can break the lease early and avoid additional fees.

Requirements to Legally End A Lease

Before proceeding with the notice of termination, it is important for both tenants and landlords to be aware of the legal requirements with which they must comply. Section 13 of The Residential Tenancies Act (the "Act") sets out a provision about when a tenant may give a notice of termination to a landlord.
For fixed term tenancy agreements, the tenant may only provide notice on the last day of the term of the agreement (i.e. the anniversary date of the commencement of the tenant’s lease).
Under section 13(2) of the Act, without ending the tenancy agreement on the anniversary date of the commencement of the tenancy, the tenant can provide a notice of termination to the landlord:
(a) not earlier than the first day of the third month of the tenancy,
(b) not later than 30 days after receipt of a landlord’s notice of substantial alterations under section 31 (alteration of residential premises), and
(c) on the last day of the term of the tenancy.
The period in which the tenant can terminate a month to month tenancy agreement under the Act is governed by section 13(2.1). Pursuant to this section, a tenant shall only provide a notice of termination to a landlord between the first day of each month and the deadline the tenant has to pay rent each month.
In determining whether there has been compliance with section 13(2.1), a court will consider the proper construction of the word "and" in paragraph (b). If interpreted in a conjunctive manner, the tenant could only give a notice of termination when both (a) and (b) have been fulfilled, and under paragraph (a) the landlord must have given the tenant a notice of substantial alteration within the last three months. However, if interpreted in a disjunctive manner, the tenant may provide a notice of termination at any time within three months as long as they meet the deadline set out in paragraph (c) (i.e. last day of month).
Early termination may still be possible if the tenancy agreement contains an early termination clause allowing a tenant to terminate the tenancy, upon giving notice within a specified period of time after the commencement of the tenancy agreement (for example, five days), and payment of an additional charge by the tenant. Tenants should consider taking this route in circumstances where they are not able to fulfill the conditions set out in paragraph (a)-(c) and want to avoid potential liability for any early termination fees outlined in their tenancy agreement.
Tenants must also comply with section 15 of the Act, which sets out the minimum notice periods that a landlord must give to the tenant prior to gaining possession of the property:
(a) one month’s notice for fixed term tenancies not exceeding three months,
(b) two months’ notice for fixed term tenancies exceeding three months,
(c) two weeks’ notice for month to month and week to week tenancies,
(d) twenty-four hour’s notice to a tenant or a person residing with a tenant on residential premises when, in the opinion of the landlord, there exists a serious threat to the safety or personal property of the tenant or persons residing with the tenant on the residential premises,
(e) twenty-four hour’s notice in the case of a tenant who is in serious breach of the tenancy agreement, and
(f) four hours’ notice when the tenant and other persons residing with the tenant are absent from the residential premises, the steps or stairs of the premises are blocked by snow or ice and entry to the premises is necessary for the purpose of removing the snow or ice.

How To Draft A Lease Termination Letter

A lease termination letter will usually be required. The content of a letter of termination is set out in this part.
For best results, including a prompt surrender of possession, a notice of termination should be in writing and must be properly addressed to the other party. If termination is for any failure by a Tenant to observe Lease obligations that are sufficiently serious, then the notice must be in writing. It must be served on the Tenant and must also show how the Termination will be effective. Putting the matter in writing reconciles the evidence that the important facts were notified to the other Party. It also allows for acceptance or rejection. Typically, the Lease will have prescribed a minimum period of notice with which a Lease person must comply. Some Leases will require the Lease to be terminated by documents in a specific form and prescribed manner. In practice, Lease break notices are very commonly sent to email addresses. An electronic method of communication can work well if all parties agree. It may be that there are requirements for a part of the process to be done in some physical form, such as a letter sent by recorded post or courier or personally given.
In simple terms, a letter which terminates a Lease, should set out:

a date on which the Tenancy will end
an address, which may be the address of the property but in some cases may need to be the Landlord’s own address
if there is a reason for the termination, it should be made clear by reference to clauses in the Lease or otherwise
in some cases, where the breach of the Tenancy is fundamental, a termination letter should specify the relevant clauses from the Lease Document to allow the Tenant time to rectify the situation.

Sample Letter To Terminate a Lease

Dear [Landlord or Name of Property Manager],
This letter serves as written notice of my intention to terminate the lease for the premises at [property address] as of [specific date 30 days from the date the notice is delivered] in accordance with the terms of our rental agreement. This is a 30-day notice as outlined in the lease. All items and personal property must be removed from the premises by this time.
Please provide me with a forwarding address so the final disposition of any deposits can be returned to me at my new address.
I have enjoyed living and enjoyed being a tenant in your property and appreciate your consideration in this matter.
Sincerely,
[Your Name]

Disputes And Seeking Legal Counsel

While a tenant and landlord may agree to terminate the lease by sending a termination letter, circumstances may arise that disrupt the process. The tenant may be required to continue tenancy under the lease, or the landlord may refuse to accept the lease termination. If the co-tenants are unable to come to a mutual agreement, other remedies may be necessary.
If the lease is has a fixed term, such as one year, and the tenant continues to reside at the property after the expiration of the lease, but the landlord accepts it, the lease is now considered to have been renewed for a new term. If the landlord disapproves of the tenant continuing to stay on, they can bring an action in court to have the tenant evicted from the property. A landlord can also file an eviction action if the tenant refuses to leave even though the lease has been terminated. However , the landlord cannot take matters into their own accord by forcibly removing the tenant. A judge must grant an eviction order.
If the process becomes complicated due to a dispute, the parties involved should obtain legal advice on how to resolve the conflict. Even if the lease contains a provision to engage in arbitration for disputes, a party may still wish to consult an attorney. It is possible that the other party does not comply with the arbitration process or it is not able to work.
It is possible to find free legal assistance through state bar associations and pro bono services. There are also various resources available that provide information about getting a lawyer and a directory of local legal resources.

Negotiating for An Early Termination Of A Lease

If a tenant and landlord can agree on how to terminate the lease, that is always helpful. It can be accomplished by an amendment to the lease, or by the later execution of a lease termination document. However, if that cannot be accomplished, some strategies are suggested below for achieving a negotiated lease termination.
Sometimes the parties can agree to allow a tenant to reject a lease renewal option in exchange for a rebate of some portion of the rent as a compromise for the early termination. Suppose, for example, that a tenant has the right to exercise an option for an additional five-year period at $ 22 per square foot in the final year of the term but under current market conditions it can only sublease the space for $ 19 per square foot. The tenant will have paid $ 22 in year one and year two of the option term if it exercises the option, so the landlord may be willing to allow the tenant to terminate its extension option rights in exchange for a rebate of that $3 per square foot per year or, somewhat more likely, some portion thereof (perhaps a two year payment of the $ 3). The rub is that the tenant will not pay rent until it subleases the space and the landlord may want to hold back the rebate for later payment against a shortfall in future rent. This is a negotiation. By linking some payment to the delivery of possession, the landlord can feel more secure that it will get the space back. On the other hand, if the tenant wants to negotiate this way, it can do a good job of softening up the space by telling the landlord (subtly) that there are several other people interested who will pay a significant rental. The tenant’s leverage is the potential of a "headline" deal the landlord would hate to lose. There is nothing like a little bit of fear among landlords that they may lose out on the headline deal to soften them up.
A tenant can also offer to pay a penalty for its early termination of the lease. The amount of the penalty could be a month’s rent per year remaining on the lease. The penalty can even be tiered for the balance of the term with a higher amount for year one and then reduced for year two and year three. In negotiating a penalty, a tenant would probably want the higher amount for first year deleted following the affirmative negotiation of the penalty. The tenant can say that it likes the landlords proposal but it doesn’t like the penalty so it will remove the penalty if the landlord will write off two months rent by amending the lease to extend the term and increasing the rent to cover the two months. The landlord, having successfully softened up to delete the penalty, will be less likely to balk at an extension at a higher rent.
Generally speaking, the parties can negotiate the early termination by negotiating the following:
(a) the amount of the release fee for the early termination and
(b) the time of payment, whether at the time of the early termination or at some future time or whether by a rebate of rent or by a lump sum payment at the time of termination.

Frequently Asked Questions On Lease Termination Letters

How much notice do I have to give?
It all depends what your lease says. Your lease may say that you must give 30 days’ notice. If you don’t give proper notice you may have to pay rent for the time period in the lease (or even pay the landlord’s legal fees). If your lease doesn’t say, you should refer to your state’s laws (or to local laws if you’re in a municipality with a rent stabilization law) on lease termination and notice requirements. You may also need to refer to your local laws on eviction procedures. Please keep in mind that landlords are not always required to give a grace period. In some states, landlords can take money out of your last month’s rent and the law allows them to immediately evict you.
Is a recorded letter legal as a record of termination?
Probably not. It’s a good idea to send it certified mail or by email (if you have an email agreement with the landlord). It’s not enough to have a letter stamped by the postal service or affixed with a certified mail number.
What if the landlord says they won’t already?
The landlord can’t keep you in the unit for a period longer than what’s in the lease and you’re still responsible for paying rent and for utilities costs when those are not included in the rent. You may want to ask the landlord to terminate the lease by stipulation order , but it’ not a legal requirement. The landlord will probably grant your request to terminate the lease, especially when the landlord gets the subsequent tenant. If the landlord refuses, you may file for an eviction action to obtain a judgment for the rent. You should be ready then to pay the full costs of the action to recover what you owe. You will also have to pay the court fees and filing fees.
My landlord says I owe more money because the lease was extended for another year. Is that right?
No. Landlords can’t automatically extend a lease without notifying you. It’s a violation of good faith in an existing contract. If the landlord extends a lease, you may be entitled to accept it or reject it.