Lease Termination Agreement

What is a lease termination agreement?

A lease termination agreement is a legally binding document that defines the process for termination of an existing lease agreement.

The document is also known as a mutual lease termination agreement template. This is so because the document represents a mutual consent of both parties to end the lease relations.

A well-drafted termination agreement should include the elements below:

• full name and address of the parties;
• details of the original lease;
• details of the leased property;
• deadline for the keys’ return and property’s inspection;
• conditions regarding the return of the deposit and outstanding debt (if any);
• applicable law; and
• signatures of the parties.

The parties involved in a lease termination agreement are the landlord and the tenant. A landlord is the property owner, and the tenant is a person who rents the property. Both parties could be businesses, organizations, or individuals. Depending on the wording of the original lease agreement, the landlord and the tenant could also be referred to as a lessor and a lessee. If, however, the original lease agreement was signed by a property manager (a person who represents a property’s owner), in that case a property manager shall sign the termination agreement template.

The present termination of lease agreement template is suitable for various types of lease agreements, including residential or commercial leases, short-term or long-term lease agreements, etc.

A lease termination agreement is a final legal arrangement aimed at ending the lease. Therefore, the present document shall not be confused with a simple letter requesting the lease termination. In that case either party sends an official request to another party to the original lease to end the contract, including detailed terms and conditions of such termination.

How to draft a sample termination of lease agreement?

To get a complete and legally binding sample termination of lease agreement, include the mandatory elements listed below:

Description of the original lease

The text of a lease termination agreement template shall contain the direct reference to the original lease agreement, including:

• type of the lease (e.g., apartment, office, land, etc.);
• date of the original lease contract; and
• full address of the leased property.

Return of the Deposit

Most lease contracts require a tenant to transfer a security deposit at the beginning. Thus, a termination lease agreement template has to specify what happens with such a deposit in case of a lease termination. In practice, there are two possible scenarios:

• First, the landlord wants to return the security deposit in full. If this is the case, the text of the agreement needs to clarify the payment method for returning such a deposit, as well as the amount of the requested deposit.
• Second, the landlord refuses to return the deposit. This normally happens due to existing outstanding debt arising out of unpaid rent, utility bills, or property damage. In any case, a lease termination agreement shall address the reason for which the security deposit won’t be returned.

Property’s Inspection

The landlord has a right to inspect the lease premises to find out the real condition before the tenant moves out. Therefore, a termination of lease agreement template usually provides the exact date by which the landlord shall make such an inspection. In practice, parties tend to make inspections right after the tenant moves out.

Apart from that, the document’s template shall clarify the date by which the tenant has to return the keys from the rented property.

End Date

Whether it is a normal or early lease termination agreement template, the document should define when the lease relations end. There are several possible ways to write that clause in the contract:

• First, to specify the final deadline by which parties shall fulfill obligations in full;
• Second, to specify the period of time after signing the lease termination agreement after expiration of which the contract should be ended.

Applicable Law

The text of the lease termination agreement shall indicate the name of a state whose laws apply to this agreement. The best way to proceed is to indicate the state, the laws of which apply to the original lease agreement. It allows us to ensure consistency in a termination process with the original lease. Moreover, in case of a dispute, it would be much easier to mitigate the conflict once the same state laws apply towards the original lease and termination agreement template.

How to customize a lease termination agreement at FasterDraft?

To get a fully customized legal document template, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format—lease termination agreement PDF or Word.
4. Make a payment.
5. Download, sign, and use this template to terminate your commercial or residential lease.