Knowing How To Terminare The Lease
The basic concept of lease termination is fairly simple; it represents the end of the contractual agreement between a landlord (or in strictly a commercial deal, a lessor) and a tenant (or lessee). It can happen at the end of a lease term due to expiration or renewal (but in most cases it’s done through a written addendum stating so). It can also happen much earlier in the lease term or even before a lease was entered into due to a breach of the terms and conditions of the lease (in commercial deals, the lease is usually called an "agreement to lease", "lease agreement", or "commercial agreement").
A landlord may terminate a lease for any number of reasons. It may be due to non-payment of rent, violation of the lease terms, failure to pay utilities or property-tax-related items, or otherwise. In commercial lease agreements, the most common reasons are a breach of the "covenants", "terms and conditions", or "warranties" and defaults under the agreement, or earlier termination rights and obligations publicly recorded in the land records or under applicable law (including certain landlord-tenant statutes and the Bankruptcy & Insolvency Act).
The process for lease termination and the applicable legal guidelines depend upon the nature of the lease and the local law governing the property. In the case of residential leases , a landlord must typically file a notice with a local court and obtain a judgment against the tenant before terminating the lease.
For commercial leases, a landlord need not file a notice with the court. Evictions are typically accomplished by a process server delivering a notice of the breach and the right for the landlord to re-enter the premises and dispossess the tenant (known as a notice to enter in commercial leases). The commercial lease agreement will then be terminated automatically after a notice period (usually stated in the agreement). However, if the matter is contested in court, the landlord may have to obtain an order before terminating the lease agreement. Ordinarily, the landlord is only permitted to terminate a lease to obtain possession of the premises.
Similar rules govern commercial lease agreements not negated by the lease specifically tailored for the purpose. The same rules govern commercial agreements to lease in some cases, but frequently a commercial agreement to lease is drafted in such a manner to avoid these strictures.
Legal Reasons to End a Lease
When a landlord initiates the process of ending a rental agreement, they must do so in accordance with local, state and federal law. Depending on the state, a landlord might not be able to simply request a tenant vacate the property. They must provide specific reasons or "grounds" for a lease termination. Common legal grounds include the following:
Breach of Contract: A landlord must provide a tenant the ability to fix the problem as outlined in the rental agreement. An example of a breach of contract would be if the rental unit requires monthly carpet cleaning but the tenant fails to comply with that provision. The landlord must give the tenant a notice where they have a few days to clean the carpets and then reevaluate the condition of the carpet to determine if the breach has been cured. Non-compliance with the rental agreement is often the primary grounds for a landlord to terminate a lease.
Property Damage: If a tenant is damaging the property, this is grounds for a lease termination. There are various levels of damages, some of which may allow a landlord to act more swiftly. For example, if a tenant is growing moldy food in a kitchen or bathroom on a regular basis, this is likely grounds for immediate termination. If the tenant broke the window in the first week of taking possession of the unit, the landlord has several days even months (depending on state law) to file a notice to end the lease and then allow them to respond and attempt to fix the damage.
Illegal Actions: If the tenant takes part in illegal actions that violate federal, state or local laws, this may also be grounds to terminate the tenancy agreement. If they have violated the law on multiple occasions, this can lead to a faster lease termination process. If a tenant is part of illegal activities, such as drug use or selling, and the police have visited the property on several occasions, that is enough for some local governments to evict the tenant without formal eviction process.
Actions To Take Before Sending A Termination Letter
Before committing to ending a relationship with your tenant, it is critical to have a firm legal basis to do so. In order to determine the specific steps to take, you should review the terms of the lease and make sure that you are terminating the lease within the appropriate time frame.
In most cases, it is necessary to provide your tenant prior notice of the lease termination. While some leases include lease termination provisions, many do not provide for lease termination. If the lease does not include these provisions, then typically, you must provide your tenant with 30 or 60 days’ prior written notice of the lease termination. While you may wish to send the termination letter to your tenant immediately upon the expiration of the lease, you may not have the right to do so. Before sending a lease termination letter, be sure to determine whether the lease contains a renewal provision. Under a renewal provision, the tenant must give notice of its intent to renew the lease. Until that deadline, you are required under the lease to abide by its terms. In addition to reviewing the terms and conditions of the lease, you also should review applicable state laws regarding your rights and obligations as a landlord and tenant. Many state laws provide additional requirements related to the termination of a lease. For example, some states may require that you give less notice if your tenant is in default under the lease and the lease provides for this duration. Accordingly, before sending a termination letter to your tenant, be sure to review any statutory requirements that are applicable to landlords.
Writing A Lease Termination Letter
The lease termination letter should be a formal document with the parties’ full names and addresses at the top of the letter. This includes both the lessor/landlord and lessee/tenant. For example: "This Termination of the Lease is entered into and effective as of [date] between John Doe, landlord, whose address for service is [address], and Richard Roe, tenant, whose address is [address]." It also often includes the address of the premises being ended by the letter. For example: "[This Termination of the Lease applies to and ends that certain residential Lease Agreement dated July 1, 2005, made by and between John Doe, landlord, whose address for service is [address], and Richard Roe, tenant, whose address is [address], respecting the premises [address of property].]
Also, both parties should sign and date the document.
The next components of the termination letter should include:
-The date of termination;
-The reason for the termination;
-The notice period;
-Any further action expected by either party before or after the termination date.
Important Text and Phrases To Use
"Without Notice" and "With Notice" — Surrender of Possession
Both a tenant and a landlord may voluntarily terminate their relationship by surrendering the property to the other. A tenant usually surrenders the property to the landlord, which is then responsible for its subsequent care.
The term "surrender" has a distinct legal meaning, and you don’t want your tenant to show up to the property one day, even after you’ve indicated that they need to vacate . Your lease termination letter should include language such as, "You are hereby notifying the tenant that the landlord will be surrendering the rented premises without notice." Such a statement clearly alerts the tenant that he or she cannot return without your express invitation.
Beyond these basic rules outlined in the North Dakota Century Code, a termination notice must:
Failure to follow these guidelines can spell disaster for every landlord. To further protect yourself, be sure to check your lease to see if there are other termination requirements already spelled out.
Sending Out The Termination Letter
There are a variety of ways you can deliver the termination letter to your tenant. You can either mail, hand-deliver, or email it to your tenant. Here are the pros and cons for each method.
Mail
If you do not have a good idea when your tenant intends to move out (or are never able to get a clear answer from them on when they plan to be out) then sending it via certified mail is often your best option. That way you can hire someone to go to the post office with you and you can mail it as certified mail. This will establish a timeline that you need in order to prove that your tenant received the termination notice. Additionally, because it is certified mail and the tenant will be required to sign for it, you can be assured that they have actually received the termination notice. If there is a specific date by which the tenant must be out, you should mail it at least one month in advance of the deadline. You can send it via first class mail or certified mail. A first class mail option is generally just as acceptable, but if you ever encounter a problem with the tenant and are forced to defend your warning, you would be required to provide them a copy of the original letter, just in case it went unanswered. If the tenant has never been out of communication range and is normally very reliable this is often sufficient. It is much easier to get the termination notice signed and sent in via first class mail (and its general quicker) and attempting to send it certified. But again, if you ever run into a problem with the tenant, you will have a hard time proving that they received the warning letter with just first class mail.
This is by far the easiest option and it saves the most amount of time. If you have a tenant that will almost always send you back a signed copy, then this is probably the best option for you. An email allows you to receive the notice back saving time and effort for both you and your tenant. The point of giving a termination notice is that you know that your tenant received the warning and you can use it later if you run into problems obtaining their security deposit upon leave. With an email, you can be certain that your tenant received the notice, but there are some problems that might arise, namely if the system goes down and the email does not go through. If that does happen then you could have a problem proving that you delivered the notice. However, if the system does go down, it will be very rare for the system to be down for long enough for the tenant to move out and decide not to pay rent. So if your tenant was gone for at least a week, you should be in the clear from an email standpoint.
Dealing With A Tenant’s Responses and Reactions
Upon receiving a lease termination letter, a tenant may respond in a number of ways. This may include any lengthy response, letter, or even email. Depending on the circumstances, a tenant may just push back against the termination letter with empty threats or short responses, insisting that their grievances have not been properly addressed. Additionally, a tenant may dispute the termination of their lease by attempting to renegotiate its terms. For example, a tenant may request a longer notice period or try to persuade the landlord to be more flexible regarding their specific circumstances, which are likely unique to every tenant and every situation. In some unfortunate cases, a tenant may even respond with the threat of lawsuit if the landlord carries out the termination of the lease. It’s important to handle all tenant responses diplomatically, no matter the response. Listen to the tenant’s concerns and take them seriously, even if you plan to move forward with your original plan. Inform the tenant of the next steps as calmly and reasonably as you can and confirm those details with another written communication. Don’t be afraid to stick to your original plans, as long as you know the law is on your side and you’re properly prepared for what comes next. In the event of a battle between a landlord and a tenant, it is recommended that both parties work toward a resolution rather than a lengthy legal battle. In most cases, your lease termination will be legally justified, but the tenant may raise questions about your process. To avoid a dispute and potential litigation, be prepared to clearly state your reasons for the termination in accordance with state and local law. This includes but is not limited to understanding the law in your state pertaining to "just cause" evictions. Some states have strict laws regarding the circumstances under which a lease can be terminated. In others, however, the laws are less stringent. It is necessary to understand what the law requires, as it will ultimately determine whether the tenant has legal grounds to prevent the termination or hold you accountable in the event that they do eventually terminate the lease. There is certainly a chance that the tenant will take issue with your reasons for terminating the lease and be fully determined to dispute it. Generally speaking, this will only happen in rare and unusual situations, as long as you’ve followed the proper processes and responsibilities to provide the tenant with notice. In some extreme cases, a tenant may take additional steps such as seeking a restraining order or a temporary injunction to block the eviction, although this is rare. Ultimately, however, the courts have the final say in whether or not a lease has been terminated according to the law. If you’ve followed all legal guidelines, you should be well protected. However, you should always consult a lawyer if you have any questions about how to handle communications with your tenants.
Common Mistakes To Look Out For
Common mistakes landlords make in this situation: The first mistake is failing to provide a clear reason for the termination. Unforeseeable circumstances that occur after a lease becomes effective could make it impossible for the landlord to honor it if the tenant does not vacate. It is important to state the specific grounds upon which a lease is terminated in the letter. Disputes can arise between landlords and tenants if either party is uncertain about the terms of the lease that triggered termination.
Another error landlords often commit is failing to state a reasonable time period within which a tenant is expected to vacate. Tenants invariably require time to find new accommodation if they are to move out. The set time frame must be reasonable for both parties or your tenant could challenge your grounds for eviction. In most cases , you could simply turn to the local laws for a guideline that helps you determine how long notice you are required to give the tenant for the rental agreement or lease being terminated.
A termination letter must also not leave any room for ambiguity. Renters must have no doubt about the landlord’s intentions. For instance, if you are willing to extend your tenant’s period of accommodation, you must use very clear language that specifies whether you would like the tenant to vacate by that date, or would otherwise agree to extensions if the tenant completes a rental application for relocation purposes.
It is also important to correctly specify the grounds for termination. Resident and commercial leases alike contain well-defined parameters regarding the obligations of every tenant. If your tenant has fulfilled all the requirements and has demonstrated respect for the property, you are unlikely to find grounds for lease termination. However, a tenant who fails to meet all obligations and whose conduct is troublesome may provide you with the reasons for terminating the rental agreement or lease.