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What, Why and How to Write a Lease Termination Letter
By Nicole Sarrate
Do you like being sued? No.
Do you like losing money? Of course, not!
Great! Seems like you’re in the right place.
One last question, to be sure, are you trying to sell a house fast in Philadelphia?
Yes? Perfect! Happy to show you around.
No? No matter, this may still be just what you need to know.
A Lease Termination Letter will help your current tenants vacate quickly and smoothly so you may sell your humble abode to Nancy the nurse and her dog, Hairy Paw-ter… who am I kidding?! Your awesome property will attract plenty of Philadelphia cash home buyers.
What is a Lease Termination Letter and how does it help sell a house fast in Philadelphia?
A Lease Termination Letter is you, the landlord, informing the tenant you’re ending the lease as of a certain date.
You may see it referred to by other names, such as a Release of Lease Agreement, or can go by a more specific name, such as a 60 Day Notice to Terminate Tenancy.
It’s important to recognize this is not the same as an Eviction Notice or a Notice to Quit. Which means it will not trigger the notice period before you can proceed with the formal legal process to evict. However, if things go sour and the tenant refuses to move out at end of the lease, documenting a sent Lease Termination Letter will only help your cause.
It may also help smooth things over, if the tenant becomes upset or offended, by reassuring them this will not reflect badly on their credit or renting history. You may even wish to add that you’re happy to provide a good reference for their next home, assuming they are not problem tenants.
Why? I need to sell my house fast!
Okay, okay… that should have been obvious, but here’s why you should always use a Lease Termination Letter/Release of Lease Agreement, especially if you’re looking to sell a house fast.
There are very specific terms under Section 250.501 of Pennsylvania law in which you are allowed to terminate your lease. It’s not like you can cancel a lease just because you found an opportunity to save on capital gains tax on the home sale.
However, if this is your objective, or whatever other reason you need to sell a house fast in Philadelphia, I’m here to help you figure out how to navigate the situation. So, let’s break them down!
Here’s the legal ways to break the lease:
- Upon the end of the lease
- Upon breach of the lease by tenant
- Upon nonpayment of rent
No. 1 – easy peasy! The lease is already ending so you don’t have to do anything, right? Unfortunately, not.
PA law requires landlords to send a Notice to Vacate at least 15 days, for month to month tenants, and 30 days, for 1 year + leases, prior to the move out date. So, in essence, the biggest why is that it’s basically the law….
Also, most states, including Pennsylvania as I write, automatically converts into a month to month lease if a renewal is not signed, unless specifically stated otherwise on the executed lease. The month to month lease will continue under the same conditions stated on the original signed lease until it is terminated by you or the tenant.
Keep in mind, your tenant may not be as organized as you undoubtedly are… so they may not even realize their lease has ended. Imagine their surprise when you show up with your move out inspection checklist, the subsequent argument, and delay for you, that will ensue!
Moral of the story: send a Lease Termination Letter.
No. 2 – but I’m selling a house in bad condition, so I need to get the tenant out quickly to renovate, and not when their lease ends in 3 months!
Here’s where you may need to get a bit creative. Either you have a reasonable, good tenant, or you have 99 problems and a tenant is one.
In the case of reasonable tenants, you may be able to negotiate a lease termination or transfer, by offering their last month free or another great location that meets their needs.
In the case of problem tenants, the second condition under the legal ways to break the lease works in your favor. Be sure to have a strong lease in place from the beginning (more on this in just a bit), so that you can utilize this opportunity.
Thorough documentation is another organization skill that comes in handy! Keep record of all breach of lease occurrences. Send formal notices via certified mail requesting them to cease, even for minor infractions. That way, if your tenant continues to cause issues, you have a clear path on how to end a lease early.
No. 3 – great, now they won’t pay!
Having a tenant who refuses to pay rent in a timely fashion, if at all, can be very frustrating. If a tenant is habitually late with rent, each occurrence may be considered a breach of lease, which provides you an out to end the lease early.
That is a good example of how to prepare a strong lease. Review with your attorney permissible language to terminate a lease early if X amount of late payments occurs.
However, if your tenant refuses to pay rent altogether, I suggest at that point to just send off a Notice to Quit to begin the eviction clock.
If all else fails, check out this article on how to sell a house fast in Philadelphia with tenants for further solutions.
Like selling a house with unpermitted work, there are consequences!
Remember the beginning of our chat, when I asked if you like being sued or losing money? Terminating a lease without a Lease Termination Letter is a good way to end up suffering both those consequences.
Courts, especially PA’s tenant friendly courts, don’t look too fondly upon landlords who put their tenants out on their tuchus! By not sending a Lease Termination Letter in advance of the move out date, especially if you use the excuse, but I need to sell my house fast, you’re perceived as giving your tenant no time to sort their move.
Avoid the mental anguish, loss of time and loss of money, by preparing to prevent this situation with a Lease Termination Letter.
The Lease can help you sell a house fast in Philadelphia!
As promised, a strong lease will include some provisions that allows you, the landlord, to terminate a lease early, so you can instead focus on finding those home buyers in Philadelphia.
The best way to insure in the lease that you have an out, when trying to sell a house fast, is to include a lease termination due to sale clause.
You may also include something a bit more generic allowing you to terminate early or end the lease without cause. However, the legality of this can be debated in court. The situation could even get worse if the tenant claims discriminatory reasons. So, as always, make sure to consult an attorney to ensure that all the terms noted in your lease are legal.
Some other clauses you could include that will not only help you terminate early if needed, but also help protect your asset are:
- Conducts any illegal activity on the premises. You certainly wouldn’t want to discourage those who buy homes in Philadelphia from purchasing your property because it’s linked to illegal activity!
- Excessive and repetitive noise complaints.
- Extreme and/or repetitive damage to the property, specifically if causing unlivable conditions. This one is of critical importance to consider because you don’t want to be held liable for constructive eviction if the tenant takes you to court. Also, I’m sure you don’t want to be selling a house in bad condition due to a bad tenant!
- Smoking on the grounds.
- Unpermitted pet (either because they did not get your authorization to have that pet, or because pets are not permitted).
- Uses the property to conduct business, particularly if it is a high traffic business.
- Stated earlier but will reiterate here just to keep things neat and tidy, fails to pay rent after X amount of time.
Also, since it’s already law for the landlord to notify the tenant 15/30 days in advance of the required move out date, it doesn’t hurt for you to include that on the lease as well. Remember, your tenant also has legal ways to break the lease. Therefore, this will help you reduce the turnover period because you can put the apartment up for rent before the tenant leaves.
For some additional clever tips on how to prepare a strong lease to help you sell a house fast in Philadelphia, check out this video.
Want more? You’re in luck, there’s a part II!
Okay, you’ve convinced me, now…
How do I write it to start finding home buyers in Philadelphia?
There are multiple ways you may choose to compose this letter.
- You may compose a customized version yourself with a set of, must have, components.
- Pro: Free and specific. So, for instance, if you’re selling a house in bad condition or selling a house with unpermitted work, you may include this into your letter to support the termination.
- Con: Slightly more time consuming.
- You may use a free/state specific template.
- Pro: Free and quick.
- Con: Not as robust/customized so may leave opportunity for legal vulnerabilities.
- You may have an attorney compose the document for you from scratch.
- Pro: Legally secure and customizable.
- Con: Most expensive option.
But couldn’t I just do a combo of these options to get the best of all worlds? You’re so smart!
I would agree it’s best to either compose your own, or tweak a free online version, and have your attorney review a template version you can reuse. That way it’s customized, cheaper, while still being legally sound.
Sure, it may seem like a smart work around to ask another professional in the industry, such as your realtor, to review the document free of charge. However, you’re still taking on a legal risk and that’s certainly not an option if you’re wondering how to sell your house without a realtor.
Now, composing your own customized letter may seem difficult, but it really isn’t when you know what to include. Lucky for you, that’s specifically what I’m here to help you with!
Even if you’re using an online template, it’s good to know what must be included to help reduce unnecessary circumstantial re-edits with your attorney.
Things your Lease Termination Letter must include:
- Date of letter
- Tenant’s name and address
- Move out date
- Remember it must be 15/30 days from the date of notification, depending on if you have a month to month or 1 year + lease.
- Reason for termination
- Be careful here. If these are problem tenants that decide to take you to court for whatever reason, the court may ask you to prove the reason stated on the termination letter. So, please don’t note the reason as, I need to sell my house fast. A better strategy would be, for example, if you’re selling a house in bad condition, you may state you are terminating the lease to do repairs on the property. Keep records of all the work that is done as your proof (here again, organization is your friend!).
- Reference to the lease clause or state law that permits you to end the lease
- Reusing the example of selling a house in bad condition above, let’s explore a less straight forward situation than it’s the end of the lease, so you can see how customizing the letter is beneficial. Let’s say your tenant has an unpermitted pet which is a breach of lease. You could then note you’re terminating the lease early due to a breach of lease, which is stated in the lease on page X, paragraph X, and is supported under Section 250.501 of Pennsylvania law. This breach of lease has caused issues at the home requiring you to do necessary repairs. Have evidence of any damage caused by the pet and the repairs made to remedy it. Just in case you haven’t noticed a theme yet, I’m a bit of a Type A personality….
- Date for walk-through inspection, noting the tenant must leave the premises in good or “broom-clean” condition
- You may even wish to include a copy of the move in inspection to reiterate the property condition you expect upon move out. This will help you attract home buyers in Philadelphia by insuring the property is clean and welcoming.
- Statement that the tenant must turn in the keys upon move out
- This may seem obvious, but you’d be surprised how many tenants forget, which would ultimately lead to an additional charge for you to replace the lock.
- Request for tenant’s new address to forward the security deposit, minus any damages beyond regular wear and tear
Remember, you’re required to return the security deposit within 30 days. Plus, revisiting the selling a house in bad condition example, you’ll definitely want to have this if your tenant is responsible for damages that supersedes the security deposit amount to send them the bill!
I feel it’s also important to note that the letter should be straight forward and polite. Again, this may end up being used in court. Therefore, now’s not the time to get all your anger and frustrations out (save that for reddit!).
If you prefer instead to tweak a free online template, there are plenty or samples online if you just search “free Lease Termination Letter” or “free Release of Lease Agreement.”
However, I’ve enjoyed our chat, so I did it for you. Here’s a free, PA specific one.
I just wish to make one last suggestion before saying adieu, send the letter via certified mail. Otherwise, you can’t prove they received it, or that you even sent it!
As a final thank you for keeping me company, here’s little keepsake of our time together.