Breaking a lease early can be a tricky situation for both landlords and tenants. In California, there are specific laws and regulations that govern early lease termination fees. As a real estate investor, homeowner, first-time home buyer, or real estate agent, it is essential to understand the rules and regulations surrounding early lease termination fees in California.
In this article, we will explore the topic of early lease termination fees in California and answer some frequently asked questions.
What is an Early Lease Termination Fee?
An early lease termination fee is a fee that a landlord charges a tenant for breaking a lease before the end of the lease term. The fee is usually a percentage of the remaining rent or a flat fee. The purpose of the fee is to compensate the landlord for the costs associated with finding a new tenant and the loss of rental income.
What are the California Laws Regarding Early Lease Termination Fees?
In California, landlords are allowed to charge an early lease termination fee if the tenant breaks the lease before the end of the lease term. However, the fee cannot exceed two months’ rent if the tenant breaks the lease in the first year of the lease term. If the tenant breaks the lease in the second year of the lease term, the fee cannot exceed one month’s rent. If the tenant breaks the lease in the third year or later, the fee cannot exceed one-half month’s rent.
Can a Landlord Charge a Tenant for Breaking a Lease Early if the Rental Unit is Re-Rented?
Yes, a landlord can charge a tenant for breaking a lease early even if the rental unit is re-rented. However, the landlord must make a reasonable effort to re-rent the unit. If the landlord is able to re-rent the unit, the tenant is only responsible for paying rent until the new tenant moves in. The landlord cannot charge the tenant for rent after the new tenant moves in.
Conclusion
Early lease termination fees in California are governed by specific laws and regulations. As a landlord or tenant, it is essential to understand these laws to avoid any legal issues. Landlords are allowed to charge early lease termination fees, but the fees cannot exceed two months’ rent in the first year of the lease term, one month’s rent in the second year, and one-half month’s rent in the third year or later. If the rental unit is re-rented, the tenant is only responsible for paying rent until the new tenant moves in. By following these guidelines, landlords and tenants can avoid any legal issues and ensure a smooth transition when breaking a lease early.
