Early Termination of Rental Agreement & Lease Agreement
A Rental Agreement / Lease Agreement is a signed contract between the Landlord and the Tenant in which the tenant agrees to take the property on rent owned by the Land Lord. The Rental Agreement / Lease Agreement outlines the terms and conditions agreed between the landlord and the tenant during the period of the agreement.
The contract is time bound and there could arise circumstances when either the Tenant or the LandLord may opt for an early termination of the agreement. Under such circumstances, it is important to abide by the state laws and the terms and conditions of the contract providing proper notice to either party for terminating the contract.
The early termination could be personal or professional reasons. Let us have a look at the circumstances that could lead to the early termination of the Rental Agreement or Lease Agreement.
Job Transfers – This is one factor that the tenant does not have control and he has to move out to retain his job or alternatively look for another job. In such a case it is advisable to let the Tenant move on and to find a replacement.
Employment Loss – This is faced by many people in their lives but remaining unemployed for a long period (more than a couple of months) can result in not being able to pay the rent. In such a case, the owner’s may want to terminate the agreement if this impacts the rental dues. In such as case, compassion with practical solution with your tenant can work out with a common solution.
Need for a Bigger Home / Extra Space – Time keeps ticking and we all grow up. Kids become adults and as a result more space / separate space will be required. In Indian culture where the children respect and take care of their parents as they grow up – will get married and will need more space or additional rooms thereby wanting a bigger home. As a Property Manager, it is better to consider the age of the children and future requirements of the family before renting out to families with elder children. Apart from this, the Tenant may also want to move out due to change in life style of the Tenant
Illness – This is one more factor like Job Loss where a prolonged illness can have severe impact on the Tenant’s financial status. In such cases when the tenant defaults in rental payments and the Tenant and the Landlord may opt out for an early termination of the Rental Agreement. In such a case, it will be better to work out with compassion with your Tenant understanding his situation.
Family Separation – In cases like these where both the partners are employed, a separation can impact the rental payments In such a case, like Job Transfers – the tenant will be left out with no option but to terminate the agreement and move out for a accommodation suiting his budget.
Maintenance Issues – As a Landlord, you are obliged to provide the unit with proper amenties and safe habitat to the Tenant. Regular maintenance of the electrical, plumbing, non leakage of ceilings, roofs and walls, freedom from mosquito, pests. These factors if not attended to may be hazardous and the tenant may opt for vacating the premises fearing health hazards and troubles in maintenance. Vice versa if the Tenant does not maintain the property in good condition, the Land Lord will opt for termination of the contract and recover the damages for improper maintenance from the Tenant.
Interfering in Tenant’s Privacy – In spite of being the owner of your property, you do not have the rights to enter the property as and when you please. A proper notice is to be given to enter the property and overindulgence in entering the property will affect the Tenant’s privacy. If the Tenant is not able to handle this – he may think of terminating the agreement. It is always advisable to visit the Tenant when there is emergency or with proper notice / valid reason.
Self Occupation – The owner may require the property for his own living. The reasons could be anything like retirement and coming back to his property.
Natural Disaster – Natural disasters are difficult to cope with and the issues is not only faced by the Land Lord and Tenant but by the entire community.
Rennovations – If there is an insignificant damage to the property and is not in a liveable condition, then either Land Lord or the Tenant may terminate the agreement for repair of the property.
Agile Property Management Services Company – when providing – Rental Assistance Services & Property Management Services, serving in Chennai and around Chennai – have come across all the above mentioned situations at different times and when such a cases arise, we consider various factors of the agreement and analyse the situation and communicate with the owner and tenant with an objective of meeting at common grounds for a smooth transition.
Some Agreement Terminations can be avoided and some cannot be avoided. It is very important to recognise and have a sense as to when to terminate the Rental, Lease or any other agreement and when to avoid and continue the agreement with minimal risk to the Landlord. In cases where the Early Termination cannot be avoided it is important to smoothly handle the terminations in a way that is fair to and transparent to both the parties.