How can a tenant break a lease?

It can feel like the power always sits with a landlord to break a lease. However, there are instances where a tenant can break a lease instead. In saying that, it can be tricky for a tenant to do so. There are processes and procedures that must be followed, depending on the circumstances, to ensure that they can leave the tenancy and not still be responsible for paying rent.

So, how can a tenant break a lease? In this article, we’ll explain how a tenant can break a lease. We’ll also discuss what a landlord should do if they find themselves in this situation.

Why might a tenant break a lease?

Before we discuss the ways in which a tenant could break a lease, let’s look at the reasons why they might need to. It can be easy to feel frustrated as a landlord when your tenant wishes to break the lease. What if you can’t find a tenant to replace them? What if your property is empty for a period of time and you lose money?

Whilst it can be far from ideal, there are reasonable explanations for a tenant wishing to end their tenancy early. These could include:

• Relocation for work
• Job loss
• Personal family matters
• Changes to financial situations
• Property violates health or safety regulations.

How can a tenant end a tenancy?

There are a few different ways that a tenant can end a tenancy. Let’s explain:

Break clause

If your tenancy agreement includes an early termination clause, your tenant may be able to use this to break the lease and ultimately end the tenancy. An early termination clause outlines the conditions under which the lease can be broken.

This is often the simplest and quickest way for a tenant to break a lease. The break clause usually becomes available after a certain amount of time has elapsed within the tenancy, for example four months. The tenant would still need to give notice.

Mutual agreement

Of course, you could simply sit down and come to a mutual agreement with your tenant if they want to break the lease. It’s important as a landlord to be understanding of a tenant’s situation, whatever that may be.

If you think you can find a tenant quickly, it may be the easiest course of action for everyone to let the tenant out of the lease early and replace them.

Landlord failure to uphold lease terms

If you as a landlord have failed to uphold the lease terms, your tenant may be able to break their lease as a result. This could include not carrying out necessary repairs, not providing certain utilities and services and generally not providing a home compliant with the Fitness For Human Habitation Act 2018. Leaving without penalty under these conditions is often referred to as a ‘constructive eviction’.

A tenant could also break the lease if they have become victim of landlord harassment or privacy violations – both legal issues. Read our advice article on what is classed as landlord harassment to ensure that you don’t overstep the mark.

Subletting

If it’s something that you allow, your tenant could find someone else to take over their tenancy for the remainder of the term. This is called subletting. A tenant must always get your permission first before subletting.

It’s worth mentioning that if you do allow subletting and this is detailed in your tenancy agreement, you cannot refuse your tenant permission if they give a reasonable request to sublet. If you haven’t included it in your tenancy agreement and your tenant asks for permission, you can refuse for any reason.

Military duty

If your tenant is called to active military duty, they have the right to terminate the lease without penalty. This includes if they receive orders for a permanent change of duty station, are deploying with a military unit for 90 days or more, or are separating from the military. If your property is located close to a military base, it’s worth including a military clause in your tenancy agreement that allows military personnel to break their lease in these circumstances and retrieve their deposit.

The importance of a break clause

It can be a really good idea to include a break clause within your tenancy agreement. That way, if the tenancy isn’t going well for either party or your tenant has a change in circumstances, you both have some flexibility to end the tenancy.

A break clause is usually not effective and able to be exercised until after a certain point. For example, a 12-month tenancy agreement may include a six-month break clause. This would allow either party to end the tenancy using the break clause after six months.

The break clause should state at what point the break clause can be exercised (i.e. after six months). It should also state how much notice the tenant or landlord will need to give (i.e. 28 days). Your tenant should be up to date with their rent before the clause can be implemented. They must follow the usually end-of-tenancy process by removing all of their belongings from the property, leaving it in the same condition it was at the start of the tenancy subject to reasonable wear and tear and lastly, returning the keys.

What should I do if a tenant breaks a lease?

If your tenant breaks a lease, it’s time to review your tenancy agreement to ensure that they are doing so in the right way. They must have given the correct notice and if exercising the break clause, not be doing so before it is allowed.

Communicate with your tenant and clarify their reasons for breaking the lease. Explore possible solutions if at all applicable but don’t apply pressure. More often than not, they are breaking the lease due to reasons outside of their control.

It’s a wise idea to document all communication in regards to breaking the lease. Remain professional and follow up in-person or over the phone conversations with an email summary. It’s best to have communications in writing.
Lastly, find a replacement tenant! Begin advertising your property and screening your tenants to get your rental investment back on track.

A lot can feel out of your control as a landlord – including when your tenant decides to break the lease. What you can control is your level of landlord insurance cover. Get a quote online today or request a callback. Alternatively, you can contact us via our website or give us a call on 01788 818 670.