Landlords often ask us what happens if their tenants break their lease. If you’ve done good tenant screening, you’ve probably found a tenant who can be counted on to fulfill the lease obligations. However, things happen that are out of our control. Jobs are lost, transfers are ordered and divorces split up families, having a negative impact on a tenant’s ability to stay in their home. The way you handle a tenant who breaks a lease depends on a lot of things.
Check your rental agreement to see what it says about tenants breaking leases. In Oregon, you can allow your tenant to end their lease obligation early if they are willing to pay one and a half month’s rent as a cancellation fee. The tenant would also be responsible for paying the rent owed for the time the tenant remains in the property.
If you don’t want to do that, you can hold the tenant responsible for rent and other charges until the end of the lease agreement. Once a substitute tenant is found and qualified, the initial tenant is then only responsible for the rent until that new tenant starts paying rent. We feel this offers better protection to landlords because it increases the odds you won’t miss out on any rental income. In this situation, the landlord does need to mitigate the initial tenant’s losses by making a reasonable attempt to find a qualified tenant.
When a tenant vacates without fulfilling the lease and has stopped paying rent, the landlord can pursue unpaid rent from the tenant. It’s important to address these options and the steps you will take in your rental agreement. Consult a lawyer who is familiar with landlord tenant law in Oregon. As professional property managers, we cannot give you legal advice because we are not lawyers, but the actions we take on behalf of our property owner clients are based on our many years of experience managing properties in Oregon, and attending hundreds of hours of continuing education seminars to ensure our brokers are up to date on all the current laws.