Creating a Good Lease Termination Letter: The Complete Guide

The Basics of Lease Terminations

Lease termination refers to the process of ending a lease agreement between a landlord and tenant. There are several reasons why a lease may need to be terminated early. A tenant may want a lease terminated because of a job transfer, personal reasons or simply because the tenant has found a better place to live. A landlord may terminate a lease due to a breach of contract by the tenant, including rent nonpayment, lease violations or significant property damage. Although a landlord can sometimes terminate a lease and re-rent the property without consequence, a tenant also has grounds to take legal action if a landlord has terminated a lease inappropriately.
There may be legal considerations when terminating a lease early. For example, tenants should know their state’s laws when it comes to lease termination and eviction. Some states allow a tenant to receive a full lease break if the tenant is called for active military duty. A landlord cannot retaliate against a tenant for exercising rights granted under landlord-tenant laws. Specific language in a lease may also outline the procedure for early lease termination . For this reason, it’s essential to follow the lease termination process carefully.
Common clauses in a lease termination section of a lease include the ability of a tenant to break a lease early in certain circumstances. The clause may include a provision for a sublease, which allows a tenant to sublet the property while still on the hook for the terms of the lease. Some landlords may require a nonrefundable fee that allows a tenant to terminate a lease early without consequence. The clause may also outline a fee for breaking the lease early and a provision that allows a landlord to deduct reasonable fees for remediation. Any fees that would be assessed for a broken lease often must be publicly posted and disclosed to potential tenants before signing the lease. The lease termination clause may also address possession of property at the end of the lease period and whether the lease will automatically renew. Most leases contain a provision for the landlord to provide written notice to the tenant if a lease will not be renewed.

Crucial Components of a Lease Termination Notice

When writing the lease termination letter, it’s important to include several key components in order for the process to go smoothly for both you and your tenant. The fundamental details included in the termination letter are as follows:
Your name and address
The specific date when the lease needs to be terminated
Tenant’s name and mailing address
The property address
Notice of any damages to be repaired to the property by the tenant
Any additional requirements or obligations the tenant must fulfill before vacating the property, which may include:
You may also want to recap any particular requests made in your rental agreement or lease agreement that you expect your tenant to follow as they’re moving out. For example, providing you with a fair notice (typically 30 days) and paying their rent through the move-out date.
It’s also a good idea to inform your tenant of how they should continue to contact you, whether by email, phone, mail, and so on while they are moving out of the property. Although your tenant will certainly still have the correspondence you sent them, it’s also useful to put these same contact details into the termination letter to allow your tenant to easily look up your contact information while packing and cleaning and closing up their former residence. It would also be a good idea to reiterate your next steps in the process.

Process of Composing a Lease Termination Letter

While your lease agreement should specify the conditions for providing a termination notice, following a series of recommendations can help ensure you are legally protected. A termination notice should be written in a professional tone, be very clearly worded and be as brief as possible.
You may also provide the tenant with a copy of your termination letter by sending them an email of the notice. Be sure to get the tenant to confirm the email has been received. Sending via email is by far the quickest way to get the notice to your tenant. If you do not have a current email address you may consider using one of several private services that will send a paper copy of the certified letter on your behalf. These services usually provide electronic confirmation via email that the notice has been sent. They could also serve as future proofing for you. If an eviction case is ever brought to court, you could be asked to bring that letter with you as evidence of your termination notice.
After writing your lease termination letter, you should review it with the following in mind:

Tone – is it (a) polite, (b) clear, (c) adequately thankful, (d) an appropriate length (at least on paper) to convey the necessary information?.
Words – in particular, you must include what you describe as a "Notice of Termination," make the relevant "termination period" clear, and use the language specific to the cancellation under your lease agreement.
Signature – is it clear and readable, and does it include the date of the letter’s issuance? At the end, sign your name in cursive text (as opposed to capital print) and also print your name under your signature.

Regardless of whether your lease agreement requires a 30-, 60- or 90-day notice period to terminate the lease, it should follow the proper legal protocol. [Remember that a 3-day termination notice is only for unpaid rent. It is not a legal requirement but the requirement of your landlord/landlady]. If you fail to adhere to the termination period, you may end up losing large amounts of rent.

Potential Legal Requirements and Tenant Entitlement

Legal obligations and tenant rights in breaking the lease
Both tenants and landlords have legal obligations when it comes to breaking a lease. These co-existing yet distinct obligations form a framework to ensure that both parties are protected against wrongful termination or neglect of the lease agreement.
The most fundamental legal obligation falls on the landlord. One of the landlord’s primary responsibilities is to ensure that the rental premise is habitable and is suitable for living. The landlord also has the duty to guarantee the safety and security of the property and rectify damages immediately. If the landlord fails to meet these obligations, it could grant the tenant the right to terminate the lease even in the absence of cause.
The tenant’s primary legal obligation is to pay rent on time and avoid causing any unnecessary damage to the property. As in the case of the landlord’s obligations, the legal responsibility of the tenant to pay rent can be rescinded if the landlord does not comply with their obligations.
A few of the tenant’s legal rights include:
The consequences of a breach of these rights by the landlord can result in a number of consequences for them, including:
If you’re not sure whether your rights are being infringed upon, or if you need help drafting your lease termination letter, then it’s time to consult an attorney.

Sample Lease Termination Letter Form

Add a handwritten signature
Date (today’s date)
Name of landlord (Thank You for being such a [fill in the blank] Landlord)
Landlord’s address
Rental property address
Dear [Insert Landlord Name],
RE: Termination of Lease
I am writing to formally notify you of my intention to vacate the rented premises as of [Insert Move-out Date]. In accordance with the lease agreement , I am providing [insert number of days as per your lease] days’ notice. My last day of occupancy will be [insert specific day according to your notice].
Please let me know if you would like to do a walk through inspection of the premises. I would like to request that you provide a written receipt for my security deposit and the name and address of the bank or savings institution where my security deposit is being held by the landlord. If there are any damages in excess of normal day-to-day wear and tear, please itemize all deductions for repairs.
My new address is [Insert Address, including city, state, and zip code, so that the landlord knows how to contact you.
Sincerely,
[Your Signature]
[Your Printed Name]

Typical Issues and Their Solutions

Challenges can arise at the lease termination stage that, if not handled correctly, can result in ongoing, costly disputes. Here, we will examine a few common challenges and what you can do to address them.
Security Deposits
Usually, the lease will stipulate that the parties are required to comply with state laws regarding security deposits; and these laws govern the amount, the use of, and the timing of the return of the security deposit. According to the Federal Trade Commission ("FTC"), security deposits are typically collected by landlords to cover "reasonable costs [for] several things, such as cleaning the unit or repairing any damages caused by tenants."
However, disputes often arise regarding the return of the security deposit. The most common issue is when the tenant claims that the landlord unjustifiably withheld the security deposit. The landlord may allege that this is incorrect, but that it is legally allowed to keep the security deposit because the unit has damages due to the tenant’s willful or negligent actions. For example, a resident may have dogs or cats, and upon vacating the rental, refuses to pay for the cost of removing pet odor and stains from the carpet. As a result, the landlord insists on retaining the security deposit. A dispute may develop.
To avoid such disputes arising, it is advisable to include a provision in the lease that simply states the following:
If a dispute arises over the return of a security deposit, the landlord should not release the security deposit until the tenant provides an adequate release. If the lease is silent or unclear regarding the release of the security deposit, the landlord may try to negotiate with the tenant in good faith. Care should be taken in these circumstances, however, since a "failure to deliver the security deposit" is considered an unfair or deceptive trade practice under certain state laws. If the landlord fails to return the security deposit within the time required by the lease, the landlord may then be subject to damages, attorney’s fees, and costs. The landlord may also find a breach of lease action against them more costly and time consuming than in a typical action. Thus, a prompt reply to the tenant is necessary under these circumstances and, if possible, the landlord should go through the release process and release the security deposit. To clarify, damages for a breach of lease are generally only those incurred as proximate cause of the breach. A landlord who fails to pay a security deposit may subject themselves to consequential damages that are difficult to calculate, such as lost business or moving expenses.
Non-Compliance with the Lease Terms
A ten-year tenant may find themselves with a large disappointment when they vacate the unit after all those years, only to be told that they will have to use their own funds to make all repairs required by the lease. For example, let’s say a resident was responsible for certain repairs during their tenancy and failed to perform these during that ten-year period. When they go to vacate the premises, the landlord requires the resident to repair what they failed to repair during the entire occupancy or the resident will lose their entire security deposit. This is a breach of the Lease Provision requiring repairs to be made by the tenant. A court would likely find that the tenant breached this provision and that the security deposit cannot be returned to the resident. Therefore, this re-occupancy clause is best ignored and the conditions of the apartment should be left as is and the security deposit returned. If the tenant failed to fulfil their obligations under the lease and an action is brought, a court will be able to determine whether the tenant breached their obligations and which particular obligations were breached and determine damages without having to be guided by any language in the lease. It would be rare that a court would rule a tenant has breached their obligations and determine that the tenant breached the lease by failing to repair the third cracked tile.

When to Consult an Attorney

There are several situations when you may need professional assistance to write your lease termination letter. You will want to find a real estate attorney who specializes in lease termination within your area. Look for attorneys who are rated with high reviews by previous customers. Customer reviews and ratings can be usually be found on their business websites or Google pages. If you are unsure where to even begin your search you can look up a law firm in your area and they should be able to direct you to a certified professional who can provide assistance.
Landlords: It would be beneficial for you to at least seek legal advice if you are terminating the rental property because it has been damaged or unpaid rent . The tenants’ lease agreement could give them grounds for them to stay. If so, you need to ensure you have a detailed termination letter documenting your reasons. Without a professional letter, damages can be hard to prove and could be used against you.
Tenants: If you are ending tenants’ rights because they are breaking the lease, you will want to seek legal counsel if you have had issues with them following the proper protocols. It is important to follow the correct procedures, and if you don’t, you could put yourself at risk of lawsuits from the tenants or the landlord.