Treaty Oak Properties

Early Lease Termination

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 the event the tenant buys a house, our attorney will sue, then after obtaining a judgment, we place a lien on the property. In other words, the worst financial and credit consequences possible are realized, and the price is paid for years to come.

Paragraph 28 provides a graceful exit from the lease. Most tenants want to avoid damaged credit, ruined rental history and collection, a judgment and a lien on their new home, 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 nutshell, 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 Treaty Oak Properties 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 150% of one month’s rent. Check your specific lease agreement or renewal for your amount.
  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 and you are still responsible for periodic checking up on the property unless you’ve arranged with us to do it for you.

That’s it in a nutshell. It’s not negotiable. In fact, we don’t even have to allow Para 28 departure. So when tenants argue or want to do it a different way (which always involves shifting costs and risk away from tenant and to the owner), we simply don’t do it.

Once the above steps are 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.