As a landlord, you’ve worked hard to ensure your investment property stays rented. But what happens when your tenant wants to break their lease early? Suddenly that dependable income isn’t as much of a sure thing as you expected. In cases where renters seek to step out of their lease before the allotted time, knowing your options can be a helpful way to handle the issue tactfully and professionally.
Down to the Brass Tacks
According to the Government of Alberta website, tenants in a fixed-term lease are required to pay their rent during the entire term as long as the landlord has not breached their responsibilities. That means even if they aren’t living there anymore, they must continue to pay while the landlord actively seeks an equally suitable replacement. That is, however, unless they come to an agreement with their landlord. Keep in mind, as the landlord you are not legally obligated to agree to their terms or even negotiate. Fixed-term leases are fairly cut and dry in this respect.
Find a Way to Work Together
That being said, you’ll likely find it easier to work with your tenant to find a mutually beneficial solution. Find out exactly when they are planning to leave, how much notice they have given you, and what they may be willing to do to come to an arrangement. If they have a great history with you, it’s almost always worth it to try and work it out. For example, you may ask that they help advertise the property so that it can be filled as soon as possible. Even if they are willing to be cooperative while showing the place to potential replacements can be a huge help. Any of these understandings should be put down on paper if both parties are agreeing to them.
Alternatives to Breaking the Lease
When an agreement can’t be reached and you absolutely need someone in the unit without a blip in your income, there are still options. Again, these are entirely dependent on whether you agree to them, but they are still worth considering. For example, you may allow the tenant to sublet the property or assign the lease. This ensures the property is still inhabited, you are still getting monthly rent, with the added bonus that you don’t have to go through the work of finding someone to move in.
It can come as a surprise when your tenant approaches you to break their lease early, but you do have a handful of viable options to help mitigate any losses. For advice on how to handle these sometimes delicate situations, or to work with an experienced property management company, contact our team today!