What Happens with Early Termination of the Lease?

by Steve Crossland on December 5, 2010 · 38 comments

BReaking your Austin lease

Great new job offer in New York, but what about my lease in Austin?

Most leases in Texas are written for initial fixed terms, usually 12 months. Renewal periods are also usually written for a fixed number of months. During these fixed terms, the tenant has agreed to remain in the property and pay rent through a certain date, and the landlord is obligated and required to allow the tenant to remain for that period of time. The only exception is a month-to-month lease which can be terminated with a 30 day notice by either party.

So what happens if it’s October, your lease doesn’t end until the following May 31st, but life circumstances are forcing an early departure from your Austin rental home?

Perhaps you’ve lost your old job and already found a new one, but the new job requires relocation to another city? Sometimes tenants divorce and neither can afford the rent alone, so both have to move. Sometimes tenants are under no financial duress but elect to buy a new home and terminate early, and simply include the early termination costs in the overall financial decision to buy the new home.

There are a number of life circumstances that can cause a tenant to contact us and ask “what happens if I can’t finish my lease term”?

This is called Early Termination and is covered by paragraphs 27 and 28 of the Texas Association of Realtors Residential Lease Agreement. Paragraph 27 covers Default, whereby a tenant simply moves out and stops paying rent. We call this a “skip” and it results in legal action, damage to the tenant’s credit report, and ultimately the account being placed for collection. In other words, the worst financial and credit consequences possible are realized, and the price is paid for years to come.

Most tenants want to avoid damaged credit, ruined rental history and collection, so we more commonly operate under Paragraph 28, which involves locating a replacement tenant to take over the occupancy of the home and allows the tenant to depart on good terms. Below, I’ll outline how this works.

In a nut shell, when you want to move early and wish to do so in a way that follows the lease agreement and avoids negative consequences, all of the costs of your decision to terminate early must be absorbed and paid by you, not the property owner. This is a simple concept for most to understand. The owner of your rental has no obligation or desire to subsidize your moving costs by absorbing lost rent and other turnover expenses created by your early departure, so all of the financial consequences of your decision to leave early belong to you. The following steps must happen if you are a Crossland Real Estate tenant:

1) You must provide written notice of your intent to terminate early, including a move-out date.

2) Your written termination notice must include payment of the reletting fee listed in paragraph 28 of your lease agreement. The reletting fee is typically 80% to 100% of one month’s rent.

3) You must continue paying rent each month on the first, until a replacement tenant is found and starts paying rent for you.

4) You must continue your utility services after vacating, until a new tenant moves in.

5) You must arrange for lawn service after you vacate, until a new tenant moves in.

6) All other terms and conditions of your lease agreement must continue to be met.

That’s it in a nutshell. Once this is accomplished, you leave with a good rental history, receive your deposit refund, and have completed your lease agreement on good terms. You haven’t technically “broken” the lease, but instead satisfied the requirements of Early Termination. It should be noted, however, that you are still legally obligated until the end of your remaining lease term in the event your replacement tenant defaults. I’ve only had that happen once though, as we carefully screen replacement tenants the same as any other new tenant.

Frequently Asked Questions:

Q: Can I wait until you find a tenant to provide notice?
A: No. We won’t initiate any efforts to locate a replacement tenant until/unless we have written notice to vacate with a move-out date. Understand that we don’t even have the legal right to promise the property to a new tenant if we haven’t received written notice from you, so your status is either one of 100% staying, or 100% leaving. There is no “maybe” or in between allowed. And we can’t market a property without a defined availability date for move-in.

Q: I don’t want to pay the reletting fee. Do I really have to, or can I pay it later?
A: You already agreed to pay it when you signed your lease. You are simply keeping an agreement you already made. It must be paid up front, as agreed in the lease.

Q: If I know someone who wants to rent the house, can I refer them to you?
A: Yes, of course. They must submit an application and qualify the same as any tenant. You may not “market” the house though once we begin marketing efforts. You can tell your friends and co-workers about it and try to help find a tenant, but you can’t, for example, put your own sign in the yard.

Q: Why should I have to keep paying rent after I move out?
A:  That’s the agreement you made when signing the lease. Failure to pay rent will represent a default of the lease. Continuing to pay rent allows us to keep sending the owner her monthly proceeds and it keeps you in compliance with your lease agreement and in good standing, which is the goal of paragraph 28 of your lease agreement.

Q: How long will it take to find a new tenant?
A: We normally locate a new tenant within 30 to 60 days, sometimes sooner. But it could also take longer depending on the time of year, market conditions, how well the house shows, and other variables.

Q: What if I only have 2 months remaining on my lease? Can I avoid the Early Termination fees?
A: Yes. If you have less than 3 months remaining on your lease, you’re probably better off finishing your lease or paying out your remaining rent in full rather than terminating early. When a tenant pays the final month of a lease term and also notifies us in writing they will be departing by a date sooner than the last day of the lease, we will market the property as available on the earlier date. You will still have to maintain utilities and yard care per your lease agreement through the final day of the lease, but if a new tenant is located and moves in prior to the end of your lease term, you’ll receive a rent rebate and will have successfully completed your lease term without having to pay a reletting fee.

If you have more than 3 months remaining on your lease term, you’re probably better off paying the reletting fee though and letting us find a replacement tenant.

{ 38 comments… read them below or add one }

1 pam September 29, 2011 at 9:25 AM

had to break apt. lease due to job move. I paid a reletting fee….they are now billing me for the entire lease’s rent plus the reletting fee…..if they don’t relet, doesn’t relet fee have to be applied to rent or else it would be considered a penalty fee? thanks for your advice.

2 Steve Crossland September 30, 2011 at 10:50 AM

Hi Pam,

You need to check the language of your lease. The reletting fee is normally not credited to rent. If you have problems with your apartment, try getting some free help at Austin Tenant Council. http://www.housing-rights.org/

Steve

3 Ken April 25, 2012 at 7:58 AM

I lives in an apartment complex for almost 2 months and I found out yesterday afternoon my car got breaking into at the parking lot; I believed this is not save place to live and I need to move out ASAP. My lease still another 4 months. Can I avoid reletting fee, get partial/full security deposit back? if I move out, will this consider breaking my lease? appreciate your help, thank you

Regards,
Ken

4 Steve Crossland April 25, 2012 at 8:04 AM

Hi Ken,

Sorry to hear of a break-in.

No, your apartment lease agreement (probably a TAA lease) does not provide an “out” in the event of break-in. Your renter’s insurance would cover this, and it would be best to further work with your apartment on measures to make the complex safer. If you did move, your chances of getting broken into again would not be reduced at all, as break-ins happen at all apartment complexes, so it’s best to protect yourself with renter’s insurance and safe practices.

Good luck.

Steve

5 Suzanne May 26, 2012 at 4:49 PM

If I can’t pay rent due to a financial emergency, what happens?

6 samantha May 31, 2012 at 8:10 AM

I am terminating my lease early. I gave a 30 day notice to move out. My landlord has aggreed and already rented my apartment out. Im paying a reletting fee. In the lease it states I have to give a 30 day notice and leave the apartment in good condition, and pay a reletting fee in order to terminate my contract early. Now my landlord is saying I cant get my deposit back even though it does not state that in the lease contract. Can she legally keep my deposit?

7 Steve Crossland May 31, 2012 at 9:00 AM

Hi Samantha,

No, your landlord can’t keep your deposit if you’ve satisfied all requirements of the lease. Charges for damages can be made against the deposit, just like any move-out, but she can’t “keep” it. If she does, and you sue her and win, you can collect 3 times the deposit amount plus $500 if the Judge determines your deposit was withheld in “bad faith”.

I would visit the Austin Tenants Council website and look for the free forms and sample letters they provide.

Good luck,

Steve

8 Luisa June 14, 2012 at 6:45 PM

HI,
We found a house which we want to buy way earlier than we thought and there fore we might want to terminate our lease 5 month early. The rented property is in a unsafe area in Dallas and not expected to get any new tenants before our lease officially ends. Here is my question: WHAT SENSE DOES IT MAKE TO TERMINATE EARLY IF I HAVE TO PAY THE RENT ANYWAYS ON TOP OF LETTING THE DEPOSIT GO AND PAY A RELETTING FEE?to me they are clearly taking advantage of our situation. I would agree to a certain percentage but the whole rent? I could just keep the place, pay rent and get at least my deposit back at the end of the lease. This law clearly doesn’t make any sense to me and provides no help for home buyers at all.

9 michelle August 1, 2012 at 8:41 PM

My landlord is giving me a hard time, I gave plenty of notice and had planned on paying out my lease. But he has new tenants and wants to continue charging me rent and the new renter. I’ve checked my lease there is nothing in the early termination paragraph that I can see.

10 Min August 13, 2012 at 8:21 PM

Hi Steve,
I have a question as:
I signed a lease with three months of rent. I paid every month in time. The lease said I need to give three month notice in front before I moved out otherwise I need to pay another three months rents. I moved out early (stayed two and half months and paid three month). However, I forgot to write the notice to landlord. The landlord asked the three months rents from me now when I returned the key. Could you help me with this issue and what should I do next?
Thank you so much for the help.

11 Steve Crossland August 16, 2012 at 10:11 AM

Hi Luisa:

> We found a house which we want to buy way earlier than we thought …they are clearly taking advantage of our situation.

Hi Luisa, your “situation” sounds like your own elective decision to buy a home well before the end of your lease. You really think your being taken “advantage of” if the landlord expects you to abide by the agreement you made when you signed the lease? I think most people would see it differently. It’s not your landlord’s responsibility to absorb the costs of your decision to terminate your lease early.

Hi Michelle: Your landlord cannot collect double rent. You should seek legal advice about what to do. A landlord in Texas has a “duty to mitigate” your damages in the case of early termination. That would mean seeking a new tenant to offset your rents owed.

Hi Min: I’ve never heard of a 3 month requirement for notice. You should contact your local Tenant’s Council for some advice, or see if a local landlord/tenant attorney will review the matter for you for free.

Good Luck,

Steve

12 maria September 12, 2012 at 1:31 PM

Im the landlord and have a month to month lease and did not renewed our lease this month, so I notified renter to move out in 30 days since we are not going with the month to moth lease and he refuses to leave and says I now need to evict? What do I do why can he respect our contract and who can enforce it.

13 Steve Crossland September 12, 2012 at 2:04 PM

Hi Maria,

Assuming you provided correct notice, in writing, of termination (non-renewal) of the lease, and the tenant fails to vacate, then yes, you will need to file a “holdover” eviction.

Your local JP Court will have the fill-in-the blank forms for this and you should file the eviction immediately, on the first day after the tenant’s failure to vacate. Do not wait or discuss with the tenant, just go and file.

You don’t need an attorney, but if you are not comfortable doing it yourself, I suggest hiring a landlord/tenant attorney.

Good luck,

Steve

14 Tom October 3, 2012 at 5:51 AM

If I pay the remainder of my lease in full, keep the utilities in my name and current till the end of my lease, give my proper 60 day notice in writing, can I take all of my belongings and go, or is that considered “moving out”. I want to keep the apartment till the end of the lease to avoid the reletting fee and early “move out” penalty.
Thank you

15 Steve Crossland October 3, 2012 at 7:29 AM

Tom, “abandonment” will be defined in your lease agreement. Normally it involves a breech of the lease of some kind (turning off utilities, failure to pay rent, etc). Your specific lease agreement will answer the question, but in most cases, yes, you can go. You do have to check up on the property though, keep the yard up, A/C/Heat still running (at minimal levels), and not simply let it sit vacant AND unattended.

Steve

16 Kris November 25, 2012 at 10:03 AM

We are being transferred to another state with my husband’s job. I have read our lease and the only thing it states in the lease about early termination is for military people. Do we have any rights? We really do not have an option here. We either stay here and we are jobless and can’t pay our rent or go there and have to break our lease. What can we do to work this out with our landlord?

17 Steve Crossland November 28, 2012 at 2:00 PM

Hi Kris,

Contact your tenant’s council or an attorney for advice, but a job transfer does not eliminate your contract obligations under the lease. You could try to work something out with your landlord but you can’t simply walk away.

Steve

18 anonymous December 3, 2012 at 1:33 PM

My current living arrangements are in communal living, and are formed around a membership in an organization. I was recently kicked out of the organization, and am being abused physically, verbally and receive sexual harassment due to this. Is there a way or precedent that allows me to get out of this?

19 Steve Crossland December 7, 2012 at 10:08 AM

Hi Anonymous,

You would need to consult an attorney, or your local tenant’s council for advice.
Good Luck,
Steve

20 Dave December 9, 2012 at 1:17 PM

We are terminating a lease early and had a reletting fee of 80% of new tenant’s 1st month rent if we located the tenant, and 100% if the landlord did. We had the landlord list the property and she is charging us the MLS fees on top of the 80%. Is that standard or are those costs supposed to be covered by the extra 20%? Thanks.

21 Steve Crossland December 9, 2012 at 1:59 PM

Hi Dave,

That would depend on your lease agreement. If “MLS Fees” are an advertising cost up and above the leasing costs, then maybe. In our market in Austin, the leasing fee normally includes MLS listings, but I don’t know where you are or what your lease says.

The “bottom line” intention of the reletting fees and provisions is that neither the landlord or property manager should be incurring fees or expenses that would not be incurred if you were not terminating early.

Steve

22 Joy December 11, 2012 at 9:19 AM

I want to leave my apartment early as I was relocated for work. I would have willingly paid the penalty fees and given the proper notice and moved out, however, I have a roommate who does not want to break the lease and will not agree. Nor will he allow me to contract out and sign on another tenant. I have a few things in my room still, but he has turned it into a storage area such that I am unable to even use it as a place to stay if I do wish to. I am still paying my full half of the rent and the utilities are in my name, and I want to be out of it! Do I have any options?

23 Steve Crossland December 11, 2012 at 12:10 PM

Hi Joy,

You’d need to consult with your local Tenant’s Council or an attorney for advice. This article is about all occupants terminating the entire lease early. What you need is a roommate swap, and the cooperation of your current roommate to accomplish that. If your current roommate won’t cooperate, then you need to consult someone about that specific situation.

Good luck,

Steve

24 Brandi January 2, 2013 at 11:36 AM

Hello,

Recently we moved out of our apartment. We were no longer in contract, we were living month to month. I cleaned out the apartment got rid of all the trash, left a coffee table behind (mouth of landlord she said she would find someone to take it on the property), put our 30 day notice in, left the electricity on, and had someone turn our key in on the 21st. Due to relocation of husbands job, we moved 2 weeks before our 30 day notice was over. I owed 685.00 out of market price living month to month. I recently recieved a bill stating we owed 1600.00…charges 685.00 rent, 585.00 for reletting fees, 80.00 trash 80.00 in damages, 159.00 for cleaning. I called her to ask her why she said legally since she closed the books and had not recieved the payment of 685.00 she is able to charge me this and it will go on my credit, I have the right to fight it.

25 Ty February 10, 2013 at 1:22 AM

My lease doesn’t end until April 30th and I am only required to give 30 days notice for renewal or termination, yet my landlord is already asking (second week of February) if I am renewing or not. I do not legally need to answer this until 30 days before my lease is up and I give notice right?

26 Noemi Lopez February 21, 2013 at 6:38 PM

where on the TAR Residential Lease does it say that if there defoult the can pay up to theer times the backed up rent?

27 Tara Hughes March 19, 2013 at 5:00 PM

I signed a 1 year lease with two roommates that stipulates paying rent and utilities every month (utilities divided equally among all 3 roommates). Due to a sickness in the family, I had to vacate the apartment early. I left the apartment in January but continued to pay for rent and utilities from December 20th-January 20th. I found a tenant to sublease my room in February and she has been paying the rent/utilities since February 20th. However, my roommates are now saying that I am still responsible for my third of the utilities from January 20th-February 20th, even though I had completely moved out and didn’t use any of the utilities during that time. The contract just stipulates “All tenants should divide the utilities equally,” however, it does not stipulate if a tenant should still be responsible for her roommates’ huge utility bill after she moved out. So legally am I still obligated to pay for my third of the utilities even after I moved out?

28 Marty April 6, 2013 at 12:53 PM

I ended my lease early with no-penalty (got this in writing) and moved into a different rental with a good recommendation from the management. However, now my move out reconciliation cites that I moved out due to non-compliance. Is this something that will prevent me from being able to rent in the future? Since I have everything in writing stating it was with no penalty, should the move-out reason be corrected by management? Will “non-compliance” read as an eviction to other properties?

29 Janelle April 15, 2013 at 8:30 AM

I would really appreciate your advice. I’ve been living at my apartment since 2009 and this January I re-signed my lease, which doesn’t begin until August. My circumstances have since changed and now I would like to move. The lease has not begun, but since I’ve signed to renew, I am fully obligated under the contract to pay rent?

There is a reletting option but no buy-out or cancellation. Apparently if I find someone to take over, I only have to pay $200 reletting fee and sign a form. Yet it still says that I am responsible for the lease. Does this mean I would have to pay the rent instead of the new tenant, or only if they don’t hold their end of the agreement?

Or would it be more advantageous to just pay the 85% of my rent to let my landlord take care of it? I had a phone conversation with an employee at the leasing office and they verbally stated that my apartment would be “easy” for them to rent.

I have lived at this residence for years, always paid rent on time and have had no major issues. Is there any negotiating I could do to make this process easier?

30 Steve Crossland April 15, 2013 at 8:47 AM

Thanks for all of your comments. It highlights the “mover’s dilemma” that happens to us all in life. Unfortunately I’m not able/allowed to answer legal questions about leases. The Austin Tenant’s Council is a good, free resource for clarification or the law and interpretation of lease language, or a landlord/tenant attorney.

But as a general rule, if the lease language is clear and straight-forward, and your lease agreement is a TAA (TX Apartment Association) or TAR (Texas Association of Realtors) form, then it comports with property code law and means what it says. There is always an early termination penalty/fee and the contract almost always (unless filled out improperly by the leasing agent) places financial the burden of early departure entirely on a tenant, where it belongs.

The grey area comes when landlords/tenants get into undocumented conversations that seem to alter or change what the wording of the lease says. It’s never a good idea to rely on that. Get it in writing. If a different deal can be made that both sides like, that’s perfectly fine, but get it in writing, always.

Steve

31 SHM April 30, 2013 at 9:52 AM

We are currently trying to get out of a lease. Mostly due to the fact that we have found a new home (which we advised management was our intention when we signed our lease agreement and that we would likely NOT be staying for the duration of the contract). We also advised them that we are moving out due to our dissatisfaction with the property – maintenance is constantly left undone (ie: lights out in the garages, trash not picked up around the property), break-ins of both vehicles and residences in our gated community have become a monthly occurance (sometimes multiples in a months time), the security guard provided is often not at his/her post, the continued problems we experienced with our a/c unit, etc.

During our lease signing, the only decent option our manager provided was for an extention through August 2013. Otherwise we could choose to go month-to-month for more than the current going rate (according to them and with no proof – rent on the entended term was also increased by over $200/mo).

Our landlord requests a 60-day notice, an 85% reletting fee AND payment of all rent due up to the end of the lease contract. On 04/24/2013 I emailed our 60-day notice to the office and was met with “this is not grounds for lease termination” but we will try to work with you and I will call you by Monday at the latest. Monday came and went, nothing. I returned home to a blanket termination notice with no contact information and an acknowledged termination date of 04/28/2013. In trying to reach the manager, I was met with a staff member that couldn’t even find my original letter to attempt to discuss the matter with me. Then an angry phone call from said manager this morning while she relates the $1,100 “favor” she’s doing me but letting us out of the lease.

To top it all off this morning, I found an abandoned and wrecked vehicle blocking multiple cars. This wreckage was a non-resident with no parking sticker – supposed to be monitored by that gate security we pay for as part of our rent. When I informed the security staff, they were shocked. Knew nothing of the matter.

How is our safety, especially when we PAY to have a guard at the front gate, not a good enough reason for wanting to vacate? Especially after we had advised them of our intentions back in November, 2012? Do we have any recourse? Is there any negotiating we can do? It’s hard not to feel as if they knowingly took advantage of our situation when they insisted we sign a longer lease than we wanted. And now they are saying they are “surprised” by our feelings and our departure. Really…??

Thanks.

32 Steve Crossland April 30, 2013 at 10:41 AM

SHM > “Do we have any recourse?”

Probably not, unless your apartment is in breach of the lease agreement. It sounds like you entered into a binding lease agreement knowing you did not intend to complete it. The lease agreement controls what happens with early termination, regardless of what was discussed when you lease.

If you think your landlord is in breach of the lease, contact the Austin Tenants Council for some free help.

Good luck,

Steve

33 Pam May 28, 2013 at 1:37 AM

Hi,

I had to leave my apartment less than 2 months earlier on a 12 month lease, due to spousal abuse. He threaten to kill me and my children, which he was issued a warrant for his arrest for not only putting me in the hospital but also a terrorist threat charge because of threatening to kill us on a voice recording, which was the proof I provided the officer assigned to my case.

I provided my apartment with a notice, but it was not a full 60 day notice, because of me simply not feeling safe at all there. I was having knocks at my door at 4 am and that sort of thing. I had never had an previous issues, such as paying late or anything. I was simply fearing for my life, at the time.

I left the apartment in perfect condition, even shampooed the carpets before I left, and took pictures of everything just to protect myself.

I went under the Texas relocation program, that is provided by the attorney generals office, to get settled somewhere he did know I was. But now I am finding out that the apartments is putting a debt on my name for 3,600. Is there anything that I can do to clear this up, because it is giving me a very hard time to find a reasonable place to live, because of this being on my credit.

34 Steve Crossland May 28, 2013 at 6:12 AM

@Pam, you are protected by state law, allowed the terminate early without penalty. Contact and attorney or Austin Tenant’s Council for advice.
Steve

35 msdast August 12, 2013 at 10:39 PM

Hi,

I am Dallas Tx apartment renter. My lease is ending Feb 2014. I need to move out early end of August 2013. I gave a written notice on 8th August, 2013. Now if I find a replacement tenant who can start from Sept, 13:

1. would my reletting fee will be waived?
2. the new tenant can keep paying the same rent as I have been paying till end of lease?
3. do the new tenant would need to sign a new lease or the subletting contract instead?
4. would I be responsible till the end of lease or I am good after the new tenant start?

Thanks. Really appreciate your answers.

36 Steve Crossland August 13, 2013 at 6:37 AM

@msdast, those questions are answered in your specific lease agreement. You should read your lease carefully for the relevant section, then go into your management office and discuss with them. If it remains unclear, check with your local Tenant’s Council for advice and clarification, or an attorney.

Steve

37 Eric September 10, 2013 at 6:07 AM

I signed a lease on September 4, but it doesn’t start until Sept 28,am I able to get out of the lease.

38 Steve Crossland September 10, 2013 at 7:19 AM

Hi Eric,

The terms and conditions of your specific written lease agreement should answer your question.

Good luck,
Steve

Leave a Comment

Previous post:

Next post: