How can you add an early termination clause to a lease renewal?

1 Step 1: Review the original lease agreement

Before you draft a lease renewal, you need to review the original lease agreement and check if it already has an early termination clause. If it does, you can either keep it as it is, modify it, or remove it. If it does not, you can decide whether to add one or not. You should also check if the original lease agreement has any other clauses that affect the renewal, such as rent increase, maintenance obligations, or security deposit.

2 Step 2: Negotiate the terms with the tenant

Once you have reviewed the original lease agreement, you need to negotiate the terms of the early termination clause with the tenant. You should discuss the reasons for adding the clause, the amount and timing of the termination fee, the notice period, and the responsibilities for finding a replacement tenant. You should also consider the tenant's circumstances and preferences, and try to reach a mutually beneficial agreement. You can use a lease renewal letter or a lease renewal addendum to communicate the terms with the tenant.

3 Step 3: Draft the early termination clause

After you have negotiated the terms with the tenant, you need to draft the early termination clause and include it in the lease renewal document. The clause should be clear, concise, and consistent with the original lease agreement and the state laws. You can use a template or a sample clause to guide you, but make sure to customize it to suit your specific situation. Here is an example of an early termination clause: Early Termination Clause: The Tenant may terminate this Lease Agreement before the expiration date by giving the Landlord a written notice of at least 60 days and paying a termination fee equivalent to two months' rent. The Tenant is also responsible for finding a suitable replacement tenant who meets the Landlord's approval and signing a lease assignment agreement. The Landlord may terminate this Lease Agreement before the expiration date by giving the Tenant a written notice of at least 30 days and complying with the state laws regarding landlord-tenant relations.

4 Step 4: Sign and date the lease renewal

The final step is to sign and date the lease renewal with the early termination clause. You and the tenant should review the document carefully and make sure you understand and agree to all the terms and conditions. You should also keep a copy of the signed document for your records and provide one to the tenant. By signing the lease renewal, you and the tenant are legally bound by the early termination clause and its consequences.

5 Here’s what else to consider

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