What is a Termination of Lease Agreement?

A termination of lease agreement is a document that has the concord of the lessee and the lessor to end the property lease. Various reasons can be the factor why a tenant or landlord will want to have an end lease. The tenant may not be happy anymore with the property or the landlord may want to lease the property to another tenant. In case of a termination of lease by landlord, the landlord has to give a notice to the tenant to vacate the property within 30-90 days. Then they have to enter a termination of lease agreement to settle everything.

A termination of lease agreement by tenant is also possible. When the tenant may not need the property anymore for certain reasons, he or she should give also a notice to the landlord that he or she will leave the property in 30-90 days. If the tenant can reach the final term of the lease agreement within 30-90 days, then the notice may not be required. Certain things happen that may be reasons why tenants will want to end the lease. Maybe the rental for the property becomes higher or the tenant may have found some better place.

A termination of lease agreement letter is to be given in times that the tenant has to vacate the premises in 30-90 days. After that, the termination of lease agreement will be given. It ends the relationship between the landlord and tenant, but being able to end everything in good terms. It means that they have made a successful business relationship and no argument can be brought by both sides because everything is well. If the end of the lease is mutual, they should make a mutual termination of lease agreement.

Commercial termination of lease agreement is common in rented commercial properties. You cannot assure that the tenant will rent the property all the time. The tenants’ business may not have been successful that there will be a need for termination. Therefore, the termination of lease agreement is needed. This way, the tenant can leave the property without any problem on his or her side. The tenant can leave the property having a right relationship with the landlord, ensuring that everything will be legal through the termination of lease agreement.

Provisions of a Termination of Lease Agreement

If you need an early termination of lease agreement, you may want to know how you can create it. But before you can start drafting the agreement, you may want to know the provisions that you should include in the agreement. Whether the termination is voluntary or a cancellation from the landlord, you should ensure that you know the provisions of the agreement. Read the following:

Introduction: This identifies the document as ending the terms of the lease. You should write the name of the lessee and the name of the lessor in the agreement. You should include the date that the termination will be effective in the introduction. You should ensure that the parties who will be written are the same parties who have entered the lease contract. You can identify the parties as the Landlord and the Tenant or the Lessee and the Lessor.Recitals: This section explains your right for terminating the agreement. The title of the recitals should be “Termination”. A signed copy of the lease is needed for termination. There should be a phrase in this section that can guarantee that the lessee is going to pay the lessor because of the termination. The money is needed for the termination process.Termination Clause: The reasons for terminating the lease should be explained by both parties. This will be a good record of why the lease should be ended. Whatever reasons both parties may have for wanting to end the lease must be written in the agreement. A termination clause should explain everything. This section also states the obligations of both parties. Be clear in writing the obligations that both parties are meant to comply with to each other.Compliance with Termination Fee: You can have options that can suit you in making compliance with termination fee. You can delete whatever paragraph that may not serve your purpose. You can also choose a title for this section. You can also title this as “Compliance with Obligations”. This section makes clear that the lessee is still responsible for all payments after signing the agreement if he or she has still some balance to pay. If there are any charges, the lessee should pay them. There can also be a termination fee that can amount to all the balance of the lessee. This can be negotiated by both parties. But if the lessee will stay in the property after the termination date, he or she will have to pay for the rent. Everything will not be included in the termination fee.Yield Up: This is the promise of the lessee to leave the property after the termination date. This way, the lessor will not have any problem making the lessee to leave the premises. This section also tells how the lessee will return the property. It can include all the things that the lessor will request from the lessee. The lessee should leave the property in perfect condition. Or else the lessor may complain about this.Security Deposit: This section describes what will happen to the security deposit. There can be two options. The first option is the security deposit will pay for the termination fee. The second option is the security deposit will be returned. Write a certain procedure on what will be done with the security deposit or the money that the lessee has initially paid to the lessor.Mutual Release of Liability: This section clears all the liabilities from the original contract. If there are any obligations left, this provision makes sure that both parties will not bring any case to court. There is a big impact on this provision. You are annulling all your claims from the original agreement. But both parties should have this oath. Though, any of the parties can still have his or her argument if necessary.Knowing Release: This provision states that both parties can hire their lawyers to help them with the agreement. It also states that both parties are entering the agreement with their own free will.Return of Property: Though it is obvious that the tenant should return the property to the landlord, you still have to spell this out in the agreement. The tenant has to promise that he or she will leave the property after the termination date. A space will be provided to put the particular date that the tenant has to leave the premises.Representations and Warranties: This section has all the promises of the tenant upon termination. This contains the interest of the tenants for the lease. This also swears that the tenants will not lease the property to other people, or enter a contract with a third party that will involve the property.Confidentiality: This is an optional provision. This states that any confidential information about the property should remain confidential. If the tenants have some confidential information from his or her company, the landlord must be discrete not to disclose any information. This section should protect the propriety information of tenants.Non-Disparagement: In this section, both parties should promise not to say anything that will be detrimental or will destroy the other parties’ reputation. This provision is common in commercial properties and not with residential properties, where parties have a business reputation.Additional Conditions: This is the part of the agreement where parties can put conditions that can be made before the termination. Some tasks may be required to do by the tenant and landlord. If one of the parties has some special request to the other party, he or she may put this in this section.Covenant Not to Sue: This is where both parties will promise that they will not sue each other in any kind of argument that can be settled. This section will give some protection for both parties.Governing Law: This is where you should put all the governing laws that will define all the terms of the agreement. You can choose the laws that you will want to govern your agreement. Write the applicable state where the law is applicable.Severability: This will protect the agreement even if some terms will be invalid. If there will be a new law for the state, it states that it will not change the contract. Only the applicable section will be invalidated. The remaining terms of the agreement will be enforceable.Authority: This states that both parties have the right and power to fulfill the terms of the agreement. It gives them the power to execute the agreement.

How to Write a Termination of Lease Agreement

Do you need a termination of lease agreement template or an early termination of lease agreement template? Will you end your lease soon and you need to write a termination of lease agreement? If that is what you are worrying about, we can help you out. We have provided some steps that you can use in writing a termination of lease agreement. Have the following steps:

1. Create an Introduction

Writing a termination of lease agreement requires you to make an introduction for the whole agreement. You must state the title of the contract. Do not forget the name of the parties involved. Be clear in stating the termination date when you want to end the lease. Whether you are the tenant or the landlord, you must know that things should be clear in the introduction.

2. State Your Purpose

The next thing that you have to do is you should state your reasons for termination. Why do you want to end the lease? If you are the landlord, you must state why you cannot make rentals for your property anymore for the tenant. If you are the tenant, you should state why do you want to leave the property. You need to have a justified reason for ending the lease or the other party may have claims to not have the termination.

3. Complete the Provisions

After stating your reason for termination, you can start drafting the agreement. Be apt to know the essential provisions of the agreement. You can refer to any termination of lease agreement sample so that you will know all the provisions of the agreement. Study how to write each provisions. Be sure that you will write the right things to each provision. You may consult a lawyer first to be sure that you can write things that will be according to the law. After you have made the contents for each provision, you can start writing the agreement.

4. Sign the Agreement

After writing the agreement, you must send a notice of termination of lease agreement to the other party. After that, you can send the agreement. Both parties must sign the agreement to make it valid. After it is signed, the tenant will be expected to leave the property after the termination date.


Are the termination of lease agreement and eviction notice the same?

No, they are different. The termination of lease agreement has something to do with ending the lease. The termination is according to the terms that are already in the lease agreement. There is not a severity on this thing. Unlike in the eviction notice. The tenant will leave the property according to his or her freewill because the termination terms have been agreed by him or her. The eviction notice, on the other hand, is a forceful action to make someone leave the property.

Is a termination of lease agreement important?

Yes, it is important. It can give relief to both parties that they can end the lease agreement in a good way. If the landlord will want to do something to his or her property, the termination of lease agreement is an answer to his or her problem. If the tenant does not want to rent the property anymore, the termination of lease agreement will free him or her from the obligation. The termination of lease agreement do good to both parties who want to end the contract.

What are the tips for a termination of lease agreement?

On of the tips that you can use is you have to follow the law. To be sure that you will have the right agreement, both parties should comply with all the applicable laws. You must also proofread the agreement. This will ensure that both of you will have the right understanding to the contract. Another tip is that you have to make the agreement early. Do not wait for the time that you want to have your property vacated or want to leave the property. So, a notice is important if you want termination.

One of the best things in a lease agreement is the termination clause. Anytime you can leave the agreement if you have a change of mind. After that, you should make a termination of lease agreement that will handle everything. Well, are you looking for a template for a termination of lease agreement? This post has 16+ SAMPLE Termination of Lease Agreement in PDF. You can have something that you can use as a guide in writing your agreement. Download now!