The statutory period of notice is stipulated in every tenancy agreement. This is usually three months, but a shorter period can also be agreed. Sometimes, however, it becomes necessary for tenants or landlords to get out of the existing contract earlier. In such cases, a lease cancellation agreement can be negotiated. However, in order to avoid trouble later on, everything should be set out as precisely as possible.
When is a lease cancellation agreement a good idea?
In many situations, a rental cancellation agreement can be the best solution for all parties involved. For example, a tenant may need a new house or flat at short notice due to a job change or other life circumstances, thus avoiding double rent payments. In the event of a death, such a contract can also ease an already difficult situation for relatives. Or if there are several main tenants, but only one party wants out of the tenancy.
There are also some scenarios for landlords in which early termination of the tenancy agreement is an option. For example, if they now want to live in the property themselves, but the notice period is too long - in the case of a termination due to personal use, this can last 12 months or even longer. A lease cancellation agreement can also be helpful if the property is being renovated or sold.
What should be included in the lease cancellation agreement?
The prerequisite for a tenancy termination agreement is that both parties, i.e. tenant and landlord, agree - unilateral termination of the tenancy in this way is not possible. The contents include the names of the contracting parties, the address, the exact designation and the termination date of the tenancy as well as additional agreements, for example on minor repairs in the flat.
To avoid problems later on, the details should be as precise as possible. For example, you must ensure that the contracting parties are identical to the persons in the tenancy agreement and clearly describe which rental property is involved. This may sound obvious for any contract, but careless mistakes have often led to repercussions.
Is there compensation?
Tenants are not entitled to compensation from the landlord. However, it is advisable for the landlord to offer something in return - such as covering the relocation costs. In this way, the tenant is more likely to agree to a cancellation agreement.
On the other hand, the landlord can claim compensation if the cancellation agreement was initiated by the tenant. After all, he may lose several months of rental income. But here, too, there is room for manoeuvre when negotiating the contract. For example, the tenant could directly arrange for a new tenant to move into their flat.
