Your military tenant has just given you notice that they'll be breaking their lease early. What's next?
Getting notice that a tenant is breaking their lease should trigger a documented, businesslike procedure. You want to ensure that you're preserving your rights as a landlord while accommodating the legal requirements of the Servicemember's Civil Relief Act (SCRA) and also being a good person in the process.
You'll want to verify that the statutory requirements are met, calculate the actual termination date correctly, ensure that you're computing the money correctly, and handle the move-out, damages, and deposit under the same fair procedures used for any departing tenant. You'll also need to account for potential unexpected changes in military moving schedules.
Early, clear, and consistent communication is key to a smooth transition.
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Notice of Early Lease Termination
The SCRA is a federal law that allows qualifying service members to end residential leases early without a financial penalty. The landlord cannot enforce any penalties for breaking the lease early if the situation qualifies for SCRA protections.
The SCRA applies when a service member or their spouse signs a lease while the service member is on active duty and later receives permanent change of station (PCS) orders or orders to deploy for over 90 days, or when a new service member is entering active-duty service. PCS orders may include a reservist or National Guard member called to active duty under certain circumstances or retirement orders for active-duty service members.
What You Can Request
Your tenant's first message may be informal: "We got orders for June." Treat that as a heads-up that an SCRA-related termination is going to happen, and lay the groundwork for a trouble-free turnover.
Your reply to your tenant should include brief but clear instructions about what will happen next. You will need a written notice (email counts for this) of the lease termination plus a copy of the military orders or a letter from the service member's commanding officer. Explain that you'll confirm the lease's end date once that documentation is received.
At this time, it will be helpful to remind the tenant how the SCRA timeline works and whether you are willing to pro-rate rent for a mid-month departure.
Calculating the Lease End Date Under the SCRA
This is the point most likely to create confusion. For a lease with monthly rent payments, the lease ends 30 days after the first date the next rent payment is due after written notice is delivered with the required supporting documents.
For example, if the rent is ordinarily due on the first of each month:
- The tenant gives written notice with documentation on October 5.
- The next rent is due on November 1.
- The SCRA termination is November 30.
In this example, rent is due through 30 November, regardless of when the property is vacated. However, you may choose to pro-rate rent for an earlier move-out. And in some states, you may be required to refund any rent if the property is re-rented before their SCRA termination date.
Verifying The Lease Termination
You should review the eligibility of every requested lease termination in the same way, so that you aren't treating some tenants with preference. A review should be limited to the basics:
- Is the tenant a service member covered by SCRA, or is their spouse?
- Did the tenant provide qualifying PCS, deployment, or activation orders, or a letter from their commanding officer?
- If a deployment, is it listed for more than 90 days?
- What date was the written notice delivered to you or your authorized agent?
Depending on the situation, you may want to confirm the orders with the service member's military unit. However, you don't want to demand more than is required, challenge the need to break the lease, or impose any other hurdles. A properly exercised SCRA termination is a federal right, and your thoughts about the situation are irrelevant here.
Once you've confirmed the notification is valid, acknowledge receipt of the notice and confirm the date that the lease will end. At this time, you should explain what will happen regarding showings and lay out the path if a move does not happen on time.
Showing and Renting the Property
If you want to show the property while the tenants are still present, you'll need to refer to the terms of your lease and the laws in your state. It may help to include the relevant part of the lease in your email.
Showings while a rental is occupied can cause the most conflict in a landlord-tenant relationship, but you can minimize those conflicts by working with your tenants to the extent that it is reasonable. While you must give the required advance notice for showings, schedule appointments at reasonable hours, and minimize disruption to their schedule, it may benefit you to be even more flexible.
A tenant who doesn't want their home shown can make the process more difficult by leaving the property untidy or being uncooperative about scheduling appointments. You may have better results by grouping showings together, planning them at times the tenant prefers, or offering an incentive if the showings produce a new tenant.
You can't always get the tenant to like having showings, but you can demonstrate that you're taking their feelings into consideration. It may help to have conversations about showings via text or email so that there's no misunderstanding.
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Movers, Possession, and Possible Changes to the Schedule
If your tenant is using a government-arranged move, they have almost no control over delays that can happen. It's important to lay out your specific expectations and available flexibility regarding the requested lease end date and what happens if their move is delayed.
Legally, the tenants are required to be out of the house on the agreed-upon date. However, you may want to be flexible because it's often more hassle to enforce the move-out date than to help them adjust. This may include building extra days into your turnover schedule. If that's not possible, communicate this early, so your tenants are clear about the deadline.
If the tenancy extends, be sure to document any short-term agreement in writing, including when they intend to vacate, who will be responsible for the utilities during this time, and whether you will charge them for the extra time.
Final Rent and Security Deposit
Your tenant is responsible for rent through the SCRA-calculated lease termination date, for any property damages that would ordinarily be charged, and for any unpaid bills such as utility bills. You cannot charge for rent after the SCRA termination date if they have vacated or an early termination fee.
Your final accounting should clearly separate:
- Rent through the SCRA termination date
- Rent for occupancy beyond the termination date
- Charges against the security deposit under state and local law, with an itemized accounting
Note: You cannot hold the security deposit simply because the lease was terminated early, even if that would ordinarily be allowed under your lease or state law.
Your Landlord Checklist
Having a written checklist will help you keep things professional and organized, and demonstrate that you're treating every tenant fairly. Follow these steps:
- Acknowledge the heads-up notification in writing.
- Clearly lay out the required official notification, the lease termination timeline, and whether you intend to pro-rate rent if they vacate the property mid-month.
- Confirm that the break-lease request meets eligibility requirements.
- Send an acknowledgement letter confirming the statutory lease end date, final rent expectations, pro-ration, and your usual inspection, keys, utilities, and deposit procedures.
- Coordinate reasonable showings and move-out access per your lease and state law.
- Ensure you have a valid address to return the security deposit.
- Return the security deposit according to your state timeline, including an itemized statement of money withheld from the deposit.
The best approach to an early lease termination is to be neutral, professional and fair. Honoring the requirements of the law while being flexible when possible will give you the best possible outcome. This will not only be easier, but it may help you avoid an avoidable legal dispute and possibly generate some goodwill at the same time.
