Hello, greetings from Colorado Springs! My name is Lance Kohler, and I'm the managing broker and owner of the Cornerstone Real Estate Team.
Today, I’d like to talk about another landlord education topic: What does early termination mean for the landlord?
For us, early termination is the same as breaking the lease. This is when a tenant wants to end their lease early and move out before the lease term ends. There are many reasons why a tenant might need or want to break their lease—they may have a sick family member, lose their job, need to relocate to another town, or find a more affordable place to live.
What Should a Landlord Do?
The first thing you need to do is review your lease agreement.
- What does your lease say about early termination?
- How is this addressed in your contract with the tenant?
In our contracts, we include provisions that outline early termination. Here’s what you can do as a landlord in Colorado:
1. Require Continued Rent and Utility Payments
- If it's in your lease agreement, you can require the tenant to continue paying rent and utility payments until the lease ends.
- However, there’s an important caveat: You must mitigate damages for the tenant.
Mitigating damages means that you, as the landlord, must take reasonable steps to re-rent or sell the property in a timely manner.
- If the property is re-rented or sold before the lease ends, the tenant is no longer responsible for rent or utility payments.
- If the lease ends before the property is re-rented or sold, the tenant’s obligation ends when the lease term ends.
2. Consider Charging an Early Termination Fee
- Another option to address early termination is to charge a fee.
- This fee would allow the tenant to break the lease without being responsible for continued rent or utility payments.
However, it’s crucial to consult legal counsel before implementing an early termination fee to ensure you are in compliance with state laws and your lease agreement.
I hope this explanation was helpful! If you have any questions about managing early terminations or want to know more about landlord topics, feel free to reach out.
Thanks, and make it a great day!