Sometimes, for a variety of reasons, residential tenants decide that it is not feasible for them to finish out the terms of their leases and that they need to move out early. While by no means ideal, early termination is sometimes a necessity — or the best of a bunch of bad options. Tenants in such situations should consider the following steps to minimize the negative impact that the choice to terminate early may have upon them.
Determine Whether the Lease Itself Permits Early Termination
Some residential leases, apartment leases in particular, include an option for the tenant to terminate the contract early and be relieved of liability for future lost rent by fulfilling some sort of requirement. Typically, this requirement involves giving a certain number of days’ notice to the landlord and paying a fixed amount as a termination fee. If exercising the early termination option in the lease contract is financially viable, this is the surest way to secure a complete release of the tenant’s responsibilities under the lease and eliminate any future liability for lost rent. The landlord’s attempt to sue for lost rent after the tenant validly exercises the early termination option and pays the associated fee would be a breach of the lease agreement.
Determine Whether a Statutory Justification for Termination Exists
The Texas Property Code identifies a few situations in which, for public policy reasons, a residential tenant may terminate their lease and move out without being liable for lost rent and other future sums under the lease, regardless of what is written in the lease contract.
Section 92.016 of the Code permits a victim of family violence to terminate their residential lease early by presenting their landlord with either a court-issued protective order or documentation of the family violence from a treating physician, mental health provider, or a victims’ advocate working for a family violence center. The tenant must give the landlord 30 days’ notice of their intent to terminate the lease under this Code provision, unless the family violence was committed by someone also living in the rented premises, in which case no notice is required. Section 92.0161 of the Code extends similar rights to victims of stalking and certain sexual offenses and offenses against children. Here again, the tenant may terminate early without incurring liability for lost rent by presenting the landlord with certain documentation of the abuse or stalking.
Finally, Section 92.017 allows penalty-free early termination for tenants who enlist in the military after commencement of the lease term, or current servicemembers who receive orders of reassignment or deployment after signing their lease.
Note that these provisions also release the terminating tenant from all overdue rent owed to the landlord up to the date of termination unless the lease agreement specifically informs the tenant of the existence of these statutory protections. Most leases used by experienced landlords will contain such language, so a tenant should not count on having their back rent forgiven if they choose to exercise their right to terminate under these statutes.
Propose an Assignment of the Lease
A lease assignment occurs when one of the parties to a lease allows another person to step into their shoes with respect to the lease and become the new tenant or landlord. The new tenant or landlord is then bound to the lease under the same terms as the old tenant or landlord and has the same rights and obligations to the other party, and the old tenant or landlord is released from the agreement.
There is no generalized right of residential tenants to assign their leases in Texas; thus, for assignment to be available, it must be written into the lease itself. The great majority of residential leases, if they permit tenant assignment at all, do so only with the explicit consent of the landlord. The landlord may be entitled to charge a reasonable fee to vet any proposed assignment to make sure that the party wishing to step in as replacement tenant is suitable and meets the landlord’s qualifications. Still, if a tenant is lucky enough to have a landlord who is willing to consider permitting an assignment, finding a qualified replacement tenant and presenting them to the landlord may be an effective way to be let out of the lease.
Give Notice of Termination and Trigger the Duty to Mitigate Damages
If no legal justification for early termination exists and the tenant determines that they must end the lease early nonetheless, the tenant should serve the landlord with unequivocal written notice of their intent to move out and stop paying rent by a certain date. Doing so triggers the landlord’s statutory and common law duty to mitigate their damages by finding a replacement tenant at the same or greater rental rate. As we have discussed in the past, Texas law imposes a duty upon a landlord to minimize avoidable losses from a tenant’s breach by taking reasonable steps to find a suitable replacement. Their failure to do so can be raised as an affirmative defense if the landlord tries to sue the tenant for the rent they would have collected over the term of the lease. Should the judge or jury in such a suit find that the landlord failed to make diligent efforts to get another renter into the property, then they may limit the landlord’s recovery for lost rent to the period during which the property would have remained vacant under a reasonable landlord. This is another reason to present a replacement candidate and request an assignment prior to giving notice of early termination; even if the landlord rejects the assignment, that rejection can later be used as evidence of failure to mitigate damages if the judge or jury believes that a reasonable landlord would have accepted it.
If you are considering terminating your residential lease before it expires, an experienced real estate attorney can help you determine whether you have a legal right to terminate early — and if not, they can advise you on the best way to protect yourself from the repercussions of doing it anyway.
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