What Is a Lease Termination Letter?

Lease termination letters are often used in residential and commercial rental transactions. Also called a tenancy termination letter, this document states the formal decision of a landlord or property owner who wishes to evict a tenant and terminate the lease agreement. So expect a lease termination letter to serve as an official written notice given to a tenant as a way of informing them that their lease agreement nearly expires or will be officially eradicated after the set date specified by the landlord.

Based on a 2020 research survey, the estimated revenue of the rental and leasing department in the US was $152.3 billion.

Why Are Lease Termination Letters Important?

As much as property owners want to keep their tenants’ lease for financial reasons, sometimes terminating a lease is the best thing to do. Possible reasons are when the lessees no longer pay their periodic obligations, tenants caused havoc or broke the rules, or perhaps, lessors decided to sell their rental properties and must terminate the lease earlier than what was agreed upon. And since a lease termination letter aims to cancel a binding agreement or contract, it only makes sense for the document to be written. That way, legal and correct actions are taken rather than abusing the power of evicting tenants.

Besides considering the state laws in making lease termination letters, these documents are also essential so both parties are properly guided on how the termination process plays out. The letter itself basically discusses the who, what, when, where, why, and how of a lease termination anyway. Thus, lessees know when they should move out and what measures they must go through. And if a lessee wants to stay, the landlord naturally gives a condition in keeping the lease. That would likely involve paying the month-to-month lease obligations on time and following the rules strictly next time.

What Are the Elements of a Standard Lease Termination Letter?

Whenever you have talked to the tenant or gave a bunch of notices of cancellation regarding lease extensions yet no clear response was received, it is time to offer a lease termination letter instead. And to easily come up with such a letter, the key is to familiarize the common elements often found in a lease termination letter. And the elements you should keep in mind are the following:

Title: At the topmost portion of the document you use as a lease termination letter, make sure to specify the title of the document. And the words “Lease Termination Letter” would be the most fitting title for it.Lessor’s Details: Since the lessor or the one granting the lease is the expected author of this letter, then the lessor’s details should be written. Details normally involve the name, position, address, and contact list. This part clarifies who wrote the letter in the first place.Lessee’s Details: The lessee or the receiver of the letter will naturally be mentioned in the lease termination letter. Same as the lessor’s details, jot down the lessee’s information from the name, address, and contact details.Date: Just like any formal letter, you need to write the date of when you actually wrote the document. That is how readers get to know if the letter itself is new or old already.Reason for Termination: An extremely important detail you should not forget is the reason for termination. So why should a tenant’s lease be terminated? It should be a valid reason or lessors may have to face litigation if the lessees decide to sue them. Generally, the acceptable reasons are failure of lease payment, violation of the lease or rental agreement, or violation of the law.End of Lease Date: To compel the lessee to respond to the lease termination letter as soon as possible, incorporate the end of lease date as well. This section clarifies the schedule of when the lease formally stops. However, do not insert a date that is around three days from now or tomorrow right away. Give time for tenants to decide and plan to move. That explains why evicting tenants usually involve a 90-day, 60-day, or 30-day notice first to give some time for preparation.Move-Out Instructions: Another crucial detail is to insert move-out instructions. So rather than having lessees being confused about what to do, you can help to give them the proper instructions to move out instead. Instructions are usually from any of the three examples: (1) to pay the rent or quit, meaning tenants better pay within the given time frame or vacate the house, apartment, or unit, (2) to cure or quit, meaning lessees better rectify their lease violation in a specific amount of time or leave the premises, or (3) to quit unconditionally, meaning tenants are only given the option of moving out from the premises.Copy of the Move-Out Checklist: Besides the instructions or options stated earlier, you can be more detailed by sending a copy of a move-out checklist. The move-out checklist contains the step-by-step process of how tenants move out once they are terminated. Hence, it is more specific than the general move-out instructions given earlier.Request for Tenant’s New Address: Lessors may also ask where their tenants would move out. And be sure to request politely because learning the new address is helpful to be sure that the tenant is not homeless. And if the lessor wants something from the lessee, at least tracking is easier from the given address.Request for Walk-Through Inspection: If a move-in walk-through inspection is needed before tenants sign a lease agreement, a move-out inspection is also needed before tenants officially move out. Besides failing to pay for the lease, other problems could be realized from an inspection from damaged walls, stolen equipment, and more. So at least a walk-through confirms if everything is settled before the tenant leaves.Basic Letter Format: Since the lease termination letter is still labeled as a letter, it only makes sense that you observe the standard letter format in writing it. That means you mind the spacing, maintain a friendly tone, insert a salutation, introduction, body, complimentary close, and signature.

How to Write a Proper Lease Termination Letter

Once it is already needed to terminate a residential or commercial lease, expect to draft a lease termination letter. Rest assured, writing it is quite easy, particularly with a detailed step-by-step procedure and a sample template in the process. In fact, you already learned about the lease termination letter’s basics and elements so you can run through the process seamlessly. And these are the only steps you need to remember:

Step 1: Save a Sample Lease Termination Letter Template

This post basically enlists a number of lease termination letter samples. And you can use them to your advantage by picking your preferred template, editing the content and format afterward, and producing the letter shortly. Sample templates give you the best shortcut compared to writing long letters from scratch. Each template even gives you a guide on how the usual lease termination letter looks like from its layout, structure, design, and other details. Hence, just personalize it until your purpose and expectations are met.

Step 2: Insert the Standard Elements of a Lease Termination Letter

Now that you have a template to use, you can begin inserting the elements of a basic lease termination letter, which was already discussed. A tip is to refer to the original lease agreement first so that you will be reminded about the stipulated terms and other relevant content. Then, pick out the elements from the lessor’s details, the lessee’s details, and so much more. Don’t forget the reason for termination, move-out instructions, and the end of lease date as those are very important. And you may add more elements that you think are helpful and relevant to your letter.

Step 3: Maintain a Friendly but Professional Tone

When you compare a personal letter to a business letter, there is a huge difference in the tone. Personal letters have more freedom in terms of expression and creativity in writing while business letters are more formal and professional. And in your lease termination letter, you should balance it out. That means you still keep the tone friendly akin to a personal letter, but professional similar to a business letter. To do that, avoid being manipulated by your emotions, especially for landlords who got upset with their tenants. And don’t be too technical as well where there is no life to what you are writing anymore.

Step 4: Keep Things Comprehensive and Direct as Much as Possible

No matter how impressive your language and tone for the letter are, everything still falls apart if you fail to deliver comprehensiveness. So be sure to maintain a smooth and organized flow to your words. Another idea is to keep things straightforward, particularly in a detailed letter. Maybe you made one whole paragraph talking about the tenant breaking any policy yet it could have been summarized in one sentence. A short, direct, and succinct message is much better than a wordy example that is only making the point more complicated than it actually looks.

Step 5: Mind Your Letter’s Format

Expect to come up with evaluations if you have given enough data, highlighted the important parts, enlisted the rights and entitlements, or ended with a call-to-action statement so the receiver would reply. Before even producing your lease termination letter, make sure to finalize the format too. Think about how the output of your letter turns out. Maybe the fonts were too small or hard to read. Perhaps, you simply send the letter in an email if you do not wish to print it. And once you are glad about the outcome, send it to the lessee with confidence.

FAQs

What are the other names of a lease termination letter?

A lease termination letter may often be referred to as an early lease termination letter, end lease letter, tenancy termination letter, or an eviction letter.

What are the advantages of a lease termination letter?

A lease termination letter contains a number of benefits. One notable example is how the letter clarifies all concerns or issues about the lease termination. The problem with verbal agreements is when some details could be forgotten and misinterpreted. And since the contract or agreement itself is tackled in a lease termination letter, nobody has to forget or misinterpret the data. Also, the letter invites a harmonious relationship between the lessor and the lessee rather than not having a common understanding. And most importantly, both parties become aware of the lease termination right from the letter. That means lessees know how much time to prepare before moving out, and lessors need to make sure that the process runs seamlessly.

How do landlords evict tenants?

Eradicating a lease may have the landlord file an eviction lawsuit first. That is if the tenant still didn’t leave despite receiving how many eviction notices already. So to begin the termination, lessors wait for the lessees’ responses. And once the lessor pushes through with the decision, he/she/they is entitled to do so since the tenant didn’t respond. And if lessees still refuse to move out, the law enforcement team would be the ones to get rid of them.

Terminating a lease for tenants who don’t deserve to stay for long doesn’t need to become a stressful experience for lessors. Landlords or anyone from the property management team simply need to continue giving notice forms until lease termination letters are at play. Because rather than arguing and forcing disobedient lessees to comply with the lease agreement, important documents such as giving a lease termination letter are more powerful and professional. And you can optimize such letters anytime using sample lease termination letters in this article.