What to Do If a Tenant Cancels a Lease Unexpectedly

KILNER PLACE 1 001As a Landlord, you must expect to experience a few out of the blue cancellations of leases in your lifetime. It’s a scenario that is bound to happen and can cause a lot of stress if you are not prepared for such an occurrence.

Some tips that you can implement are crucial when you are drafting your lease. You need to state exactly, what will happen when a tenant cancels a lease before the expiry date. For example, you can stipulate that the tenant will be liable for a cancellation fee and show how it will be calculated.

As a landlord, you will need to ensure that you have a written lease agreement between the tenant and yourself, as this will be a legally binding agreement. And should you need to take legal steps towards the tenant, this will be required.

It is essential to include the following in the Lease Agreement:-

  • Should a tenant vacate the property without giving proper notice, s/he will be liable for the full rent of the month they vacated. Should they vacate at the end of the month, they will be liable for the full rent of the immediate month to follow.
  • Before the deposit can be refunded the following will need to take place:-
    • An exit inspection of the property will need to take place.
    • Repairs for the tenants’ account, if any, will be done.
    • The tenant will need to also submit proof of electricity account paid in full and closed. (This will not apply to properties with prepaid meters)

Landlords can either accept the cancellation and go on to find a new tenant, or proceed with legal action in terms of the lease agreement.

A tenant stands a chance to forfeit his or her deposit and can also be sued for the amounts outstanding and due on his/her rental account, with the penalty fees added in a case of breach of lease. The Consumer Protection Act is sometimes quoted especially when the Landlord claims the full remainder of the lease. The Act states that Landlords can recover costs of cancellations and can also charge a reasonable penalty.

According to a local property expert, the term reasonable must be justified because it’s subjective, how can a Landlord charge a reasonable penalty? He explained that the only way to justify a reasonable penalty was to provide proof of invoices when making the claim.

However, the tenant also has the right to terminate the lease within the period signed for, but must first give a 20business days’ notice.

To avoid penalties, tenants are advised to make sure that they notify the landlord in time, of the date of vacation, and in writing. This will help the landlord to have ample time to go through the process of finding a new tenant, which can involve conducting interviews and screening to choose the best tenant.

It is advisable to maintain good mutual relations between the tenant and the landlord so as to avoid any unexpected situations. Tenants must also consider that Landlords depend on the income of every unit that is rented out.

Landlords must also be aware that tenants who lose one or three months’ rent can have set backs as most people always and only spend according to their set budgets limit. A lease cancellation