Loud late-night gatherings, guests coming and going at all hours, and a string of complaints from neighbors are just a few of the challenges you might be facing with a current tenant. Despite repeated warnings, the conduct doesn’t change.
You decide the best option is to terminate the tenant’s lease. Or maybe the end of the contractual lease term is approaching and you simply have other plans for the unit.
However, when it’s time to inform a tenant that the lease will be terminated (and/or not renewed), you should do so with care. A strong lease termination letter is a vital part of the process that can help protect you, your tenants, and your investment.
In this article, we guide you through crafting a proper notice of termination step by step. We explain the purpose of this written notice, when to use one, and how to compose it. You’ll also find a free template to download and customize. Note that we are not able to cover any special legal provisions or circumstances that might apply at the state or local level in this article. We strongly advise you to consult a knowledgeable attorney before sending any notices to your tenants.
What is a lease termination letter?
A lease termination letter may sound self-explanatory, but let’s take a more in-depth look at what’s involved in creating one.
This letter is a formal document issued by either the landlord or renter to signal the end of the lease agreement. More than simply a piece of paper, it’s a critical tool in the landlord-tenant relationship.
Think about it: Clear communication is the bedrock of any successful contract or association, including the one you share with your tenants. So, if you intend to end a renter’s tenancy, you need a clear, detailed statement to help avoid any confusion and give both parties proper legal closure.
That means drafting a lease termination letter requires careful attention. You’re requesting your tenant vacate the property while respecting local laws and the terms of your lease, remaining professional, and ensuring everything can proceed in an orderly manner.
Overall, you’re setting the stage for a smooth transition and protecting yourself from potential disputes or legal issues.
How to write a lease termination letter
Including the following elements gives you an effective and professional letter.
Your lease termination letter should include these sections:
- Tenant’s name and address: Start with the basics by clearly stating the tenant’s full name and the address of the rental property.
- Termination date: Include the date of the lease termination. Make sure it aligns with the notice period specified in your lease agreement.
- Reason for termination: Whether it’s the agreed-upon lease end date, non-compliance with lease terms, or the sale of the property, share the specific reason for the lease termination.
- Move-out instructions: Provide instructions on what the tenant needs to do before moving out. You could include cleaning requirements, key return guidelines, and details about the final inspection.
- Security deposit information: Inform the tenant how and when to expect the return of their security deposit, if applicable.
Tone and language
Maintain a professional and respectful tone in the letter. Remember, this is a formal document, so use precise language and avoid making definitive statements.
While you may see this as ending a business relationship, keep in mind you’re communicating with someone who may be surprised at having to manage an unexpected and significant change.
Though Stessa can’t provide legal advice, we can remind you to adhere to local landlord-tenant laws. These laws govern matters like the required notice period for lease terminations and the delivery method for the termination letter.
Consult with a legal professional if necessary to ensure you meet the local requirements.
Example of a lease termination letter (free template download)
[City, State, Zip]
[City, State, Zip]
Subject: Notice of Lease Termination
Dear [Tenant’s Name],
I am writing to inform you that your lease agreement for the property located at [Tenant’s Address] will be terminated effective [Termination Date].
This decision has been made due to [Reason for Termination: e.g., the end of the lease term, sale of the property, repeated violations of lease terms, etc.].
Please ensure that you have vacated the premises by [Move-Out Date], which is in accordance with the notice period stipulated in our lease agreement.
Before vacating, please adhere to the following move-out procedures:
- Ensure the property is clean and free from personal belongings.
- Return all keys and any other property-related items.
- Leave your forwarding address for the return of your security deposit.
As per our lease agreement, your security deposit of [Deposit Amount] will be returned to you within [Time Frame], less any deductions for unpaid rent, damages beyond normal wear and tear, or any other amount legally allowable in [Your State].
If you have any questions or concerns regarding this notice, please feel free to contact me directly. I thank you for your prompt attention to this matter and hope this transition will be smooth for both parties.
Download your free, customizable lease termination letter template in either a Google Docs or Word format. Since every situation is unique, be sure to tailor your letter to your specific circumstances. If you’re interested in a more robust lease termination letter, you’re in luck because there’s one included in the 50+ Landlord Forms available with a paid Stessa Pro subscription.
When to use a lease termination letter
Many circumstances may call for a termination notice, but the following are a few of the more common situations.
However, remember that laws governing lease terminations vary by location. It’s always wise to consult with a legal professional and ensure you’re complying with local regulations.
At the end of a lease term
The most straightforward circumstance is when the lease term comes to an end. If you or your tenant decide not to renew the lease, a termination letter formally acknowledges the rental agreement’s conclusion.
Non-compliance with lease terms
If your tenant repeatedly violated the lease terms—such as late or missed rent payments, damage to the property, or unauthorized occupants—a lease termination letter may be necessary. Documenting lease violations is crucial for supporting your decision.
Early termination by landlord or tenant
Sometimes, unexpected events arise that require the early termination of a lease. As a landlord, you may need the property for personal use or decide to sell it. A tenant might need to move out due to personal reasons.
In such cases, a lease termination letter outlines the reason for an early termination and sets the timeline for vacating the property.
Sale of the property
A lease agreement may include a clause allowing for early termination if the property gets sold. Be sure you refer to this clause when drafting your letter to comply with the specified notice periods or conditions.
Even though you’re selling the property, the tenant still has rights during this transition period. These include the right to proper notice, the return of their security deposit, and, in some cases, assistance with relocation expenses.
In the extreme case of tenants who continually violate their lease terms despite several warnings, an eviction notice (a type of lease termination letter) may be necessary.
Best practices for sending a tenant a letter to terminate a lease
Terminating a lease requires careful consideration and precision. Here are some best practices when sending a termination letter.
Timing is everything
Give your tenant adequate notice. The notice period should align with the terms in your lease agreement and follow local landlord-tenant laws.
Crystal clear communication
Make your letter clear and concise, and leave no room for misinterpretation. Use simple language, specify the reason for termination, and provide all necessary details about the move-out process.
Choose the best delivery method
Consider using certified mail when sending your lease termination letter. This approach furnishes you with proof of delivery so you have a record that the tenant received the letter.
Keep copies of all correspondence with your tenants, including lease termination letters. This documentation can serve as evidence in case of any disputes.
Seek legal counsel if necessary
Think about getting advice from a legal professional for complicated situations, such as an eviction due to a lease violation. They can guide you in handling the circumstances appropriately and complying with the law.
Common mistakes to avoid when writing a lease termination letter
Leasing properties is a business, but, like any company, how you treat and communicate with people is critical. Strive for clarity, fairness, and respect in your interactions.
You can ensure a smoother transition and maintain a professional landlord-tenant relationship by avoiding these common mistakes:
- Being vague about the termination reason: No matter why you’re ending the lease, transparency helps avoid misunderstandings.
- Ignoring the notice period: Giving insufficient notice could lead to legal issues. Honor the notice period outlined in your lease agreement or required by your local landlord-tenant laws.
- Forgetting to include move-out instructions: Your tenant needs to know what’s expected of them when they move out. Without clear instructions, tenants may leave the property in a state that requires extensive cleaning or repairs, leading to unnecessary costs and extended vacancies.
- Not mentioning the security deposit: Provide clear information about how and when the security deposit will be returned, and under what conditions deductions might be made. If not clearly communicated, it could lead to disputes, damaging the relationship with the tenant and potentially resulting in legal proceedings.
- Skipping over legal review: Evictions or lease terminations can be legally complex situations. Failing to seek legal counsel could result in overlooking important legal requirements, missteps in the process, or even breaching tenant rights.
Lease termination letters: the finish line
Terminating leases is part and parcel of rental property management. While not always a pleasant task, knowing how to write a comprehensive termination letter can make the process easier for everyone involved.
Clarity, professionalism, and adherence to legal requirements are essential in your termination notice. Use our free template as a guide to help you cover all the necessary details with a respectful tone.
Stessa can offer support in other vital areas of property management, including free online storage for important documents (like your lease agreements and termination letters).
From screening prospective tenants, collecting rent online, and tracking income and expenses to producing tax season reports and real-time performance metrics, Stessa is designed to take your rental property business to the next level, helping you maximize your financial investment.