What is a Landlord’s Early Lease Termination Letter in California?

A landlord’s Early Lease Termination Letter is to inform their tenant that their tenancy is being ended earlier than the agreed upon time period.

While California law specifies that month to month rentals must receive a 30 or 60 Day Notice to Vacate based upon how long the tenant has been renting, a fixed-term lease may only be terminated by the landlord for cause by first serving a 3 Day Notice to correct the condition or the lease is being terminated.

This may or may not mean the tenant has to vacate the property in 3 days.  It depends upon weather or not the reasons for the breach of the lease agreement can be correctable or if they are being terminated due to illegal activity on the property in which case they must vacate without a chance for correction.

For a landlord to terminate the lease period for cause – such as not paying rent or causing sound disturbances – a 3 Day Notice informing the renter their tenancy is being terminated is the first necessary step to getting them evicted in California.

Early Lease Termination Letters from Tenants

Landlords may also receive Early Lease Termination Letters from their tenants, trying to get out of the terms of the lease for a variety of reasons which can range from they can no longer afford rent or need to unexpectedly move, or are having a conflict with another tenant.  There are a number of important issues landlords must know regarding their rights and responsibilities to understand how to negotiate and minimize the unexpected disruption of rent when a landlord receives the letter from a tenant.

The Lease Agreement is the Controlling Document

Weather a landlord is giving an Early Lease Termination Letter to a tenant or receiving one from someone trying to cancel the lease, the Lease Agreement signed by both parties is the legally binding and controlling document.

Landlords can put all kinds of clauses into their agreement, and having an Early Lease Termination clause is very important to specify everyone’s responsibilities in these circumstances.

If for example, a landlord knows he may be selling the property in the not too distant future, he may have the foresight to place an Early Lease Termination clause in the contract which gives the landlord the right to terminate early without cause.  Or the agreement could include a mutual Early Lease Termination clause that would provide the stipulation that either party give a 30 Day Notice and pay or receive an extra 30 or 60 days rent to break the agreement.

Ending the lease early is easy if you have an Early Lease Termination clause in your agreement. But don’t try to put one over on the tenant obscuring it in legalese or fine print!  At the time of the signing of the agreement make sure the tenant understands the meaning of the clause and its conditions – ideally having them initial it.  They have a right to know if there is a possibility of the lease being terminated early without cause.

If you don’t have an Early Lease Termination clause in your Lease Agreement, you cannot kick the tenant out without cause before the end of the lease period in California.  Because the Lease Agreement has a fixed term, it must be honored by both parties.

At the time the lease period ends, and the lease is not renewed, tenants then automatically convert in California to a month to month Rent at Will Agreement. It is no longer a fixed term lease. It is always best practice for landlords who do not intend to renew the lease to give tenants a 60 Day notice the lease will not be renewed after the expiration date of the lease period, or if a renegotiation of any of the elements of the agreement is sought.

What happens when the tenant wants to break the lease early, and there is no Early Lease Termination clause? 

Landlords need to know there are some exceptions when tenants may legitimately break a fixed term lease in California without consequences of being responsible for any additional rent.

  • If the tenant is being called to duty by the uniformed military or National Guard
  • When the tenant or a family member are fleeing the premises as a victim of domestic violence, sexual assault or stalking
  • If the residence is uninhabitable due to repairs not being made to the unit which the landlord has been informed of in writing and requested to be repaired. This is known as Constructive Eviction.
  • The landlord does not honor the tenant’s privacy rights, or “Right to Quiet Enjoyment” of the property, or harasses the tenant
  • When the tenant is moving into a retirement home

If the reason for the tenant wanting to terminate the lease early does not fall within one of these five allowable reasons for early termination, it then becomes a matter of negotiating with the tenant what the terms of their departure will be.

Negotiating Points for Landlords

Technically, the general rule is the leaser is responsible for the rent for the remaining lease term if they try to get out of the lease early.  However, there are a number of scenarios that often play out which mitigates that full responsibility.

The landlord can ask the tenant if they have a subleaser in mind who could replace them for the remainder of the lease period. This can have the result when it works of being a win-win for everyone getting the tenant off the hook for the remaining rent and the unit re-rented. However, no prospective new tenant can be forced upon the landlord if, for example, they have a bad credit history.

Know that under California Law (Cal. Civ. Code § 1951.2), landlords are required to “Mitigate” to reduce the damages – to make a reasonable effort to re-rent the unit no matter what the reason the former tenant left – rather than charge for the total remaining rent due.

So the landlord may get some but not all of the remaining rent in this manner, depending upon how long it takes to re-rent the unit which will be subtracted from the total amount the tenant would have paid until the end of the period.  Legitimate expenses like advertising can also be charged to re-rent the unit. But not the time it takes to re-rent the unit.

Advertise the same rent when finding a new tenant. This is because your ex-tenant would be paying the rent until a new tenant is found.  If you ask for higher rent, it would diminish your chances of finding a new tenant quickly. The ex-tenant can then file a reference saying that you are being unfair seeking a higher rent and you might lose your rights as a result. Therefore, it’s best to fix the rent and not ask for anything more than you were charging your previous tenant in such circumstances.

If you have a truly bad tenant you want to get out as fast as possible, you can also consider a “Cash for Keys” Tenant Buyout Agreement to get the unit cleared quickly. This is a legally binding written agreement where the landlord pays a tenant money or other valuable consideration to voluntarily vacate the premises. The landlord pays cash and the renter returns the keys and gives up access to the rental property.

The immediate gut reaction of most landlords is that if they are already being taken advantage of, “Why should I be paying this guy who already owes me money?”

This is a natural feeling – but emotions need to be set aside to focus on solutions and the best hoped for outcome under bad circumstances.

Speed of getting the tenant out faster and cheaper than going through the eviction process is usually the overriding consideration for the landlord using this approach. It provides the tenant a face saving way out when it’s made clear an eviction record will make it very difficult to find a landlord who will rent to them in the future and negatively impact their credit scores if a court monetary judgment is awarded against them that they don’t pay.

Try for a Mutual Agreement to Terminate the Lease

Whenever possible, work to arrive at solutions and results which are mutual in ending the lease to avoid the court costs of the eviction process, or by receiving an amount the tenant offers to pay to mutually terminate the agreement.

Keep in mind, if there is anything in their request to terminate the lease early that has to do with the habitability of the structure requiring repairs, the costs of building permits and building inspectors coming to the property can be substantial.

If the tenant and landlord come to a Mutual Agreement to Terminate the Lease, it should be in writing and requires the signature of everyone named.

At Fast Eviction Service, help on any of the issues discussed in this article is simply a click or phone call away. Email intake@fastevict.com or call our office at (800) 686-8686 to discuss your questions for a free evaluation of your case.

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This post is filed under: Landlord Legal Issues