If you’re a landlord in Denver, you’ve probably faced this scenario: a tenant reaches out and says they need to break the lease early. Whether it’s due to a job transfer, financial hardship, military deployment, or a personal emergency, these requests can feel stressful and sudden. But with the right knowledge and plan in place, handling early lease termination doesn’t have to disrupt your entire rental operation.
This blog from PMI Elevation offers a landlord’s guide on early lease termination, helping you navigate the legal, financial, and practical sides of what to do if your tenant requests an early lease termination.
Start with the Lease Agreement
The first thing you should always do is refer back to the lease agreement you and the tenant signed. This document is the foundation for everything that follows. A strong lease should clearly outline:
The full lease term – including start and end dates. This tells you how much time was originally agreed upon.
Any early termination clause – not every lease has this, but if yours does, it should explain the conditions under which a tenant can break the lease early, as well as any related fees.
The required form of notice – usually written notice is required, but your lease should specify the format (e.g., email, mail, online portal).
What happens to the security deposit – the lease should clarify under what conditions deductions may be made if the lease is broken.
If you’re working with a property manager like PMI Elevation, we ensure every lease contract is airtight from day one, reducing ambiguity when lease break situations arise.
Know the Legal Reasons a Tenant Can Break a Lease
Not all lease breaks are a violation of the contract. There are legal reasons under Colorado law that allow a tenant to legally break the lease without facing penalties:
Domestic Violence Situations: Colorado law allows tenants who are victims of domestic violence to terminate their lease early without penalty, provided they give proper written notice and documentation, such as a police report or protection order.
Military Service or Deployment: Under the Servicemembers Civil Relief Act (SCRA), active-duty service members who receive deployment or relocation orders are legally allowed to terminate a lease early. The tenant must provide written notice and a copy of the orders.
Landlord’s Failure to Maintain the Property: If you, the landlord, have failed to uphold your responsibilities, such as providing a habitable living environment or failing to repair essential systems like heat or plumbing, the tenant may have grounds to terminate the lease. This is known as a landlord’s failure to meet legal obligations.
Mutual Agreement: You and the tenant can always choose to end the lease by mutual agreement. This approach keeps things professional and can help maintain a positive landlord-tenant relationship.
When Your Tenant Wants to Break a Lease Without a Legal Reason
If none of the legal reasons apply, the tenant may still want or need to break the lease. Common reasons include job relocation, financial hardship, roommate issues, or simply a desire to move. In these cases, your lease agreement and Colorado’s landlord-tenant laws guide what happens next.
Here’s what you can do:
1. Request Written Notice
Always require tenants to provide a formal written notice stating their intent to vacate early. This should include the intended move-out date and a brief explanation, such as a job transfer or financial challenge. Having everything in writing protects both parties.
2. Review the Early Termination Clause
If your lease has an early termination clause, now’s the time to apply it. This clause often includes a set early termination fee (usually one or two months’ rent) and may outline other conditions, such as continued rent payments until a new tenant is found.
3. Explain Their Financial Obligations
Even if the tenant leaves early, they’re typically responsible for remaining rent until the unit is re-rented or until the lease ends—unless the lease says otherwise. That said, landlords are legally required to mitigate damages, which means you must actively try to re-rent the unit as soon as possible.
The Landlord’s Duty to Mitigate Damages
You can’t simply let the unit sit empty and demand the full lease term’s rent from the departing tenant. Colorado law expects landlords to make a good-faith effort to find a replacement tenant quickly.
To do this:
Start advertising the rental unit immediately. List the property on all the usual rental sites and ensure the listing is active and appealing.
Show the property to prospective renters. Keep a record of showings and interested parties to demonstrate your efforts.
Screen new applicants just as carefully as you did with the original tenant. Use the same screening criteria and follow fair housing laws.
Once a new renter signs a lease, the original tenant’s financial responsibility ends, aside from any outstanding unpaid rent, damage, or agreed-upon termination fees.
What About the Security Deposit?
The security deposit can only be used for unpaid rent, damages beyond normal wear and tear, and fees specified in the lease. It cannot be automatically withheld just because the tenant ended the lease early, unless your lease specifically allows for this as part of the early termination fee.
In Colorado, landlords typically have 30 days to return the security deposit or provide an itemized list of deductions. If your lease allows for a 60-day timeframe, that period also applies, but it must be stated clearly in the lease.
Month-to-Month Leases: A Different Process
If the tenant is on a month-to-month lease, the process is simpler. Tenants can terminate the rental agreement by providing proper notice, typically 21 days prior to their move-out date. No early termination clause or fee is necessary in these cases, making this type of agreement more flexible, though less predictable, for landlords.
Common Mistakes to Avoid
Breaking a lease can be tricky for both sides. Here are a few pitfalls landlords should steer clear of:
Refusing to mitigate damages: You’re legally obligated to try to find a new tenant.
Withholding the full security deposit without explanation: Always document damage and provide an itemized list.
Failing to respond quickly: Timely communication reduces tension and keeps the process smoother.
Not documenting agreements: Always get everything in writing, especially when you make special arrangements with the tenant.
How PMI Elevation Helps Denver Landlords Handle Lease Breaks Smoothly
Handling early lease termination requests can be time-consuming, stressful, and financially risky if you’re not prepared. At PMI Elevation, we help Denver property owners manage these situations with clarity and professionalism. From writing ironclad lease contracts to handling tenant communication and finding qualified replacement renters, we take care of the heavy lifting.
Denver’s rental market is dynamic—tenants come and go, and life throws curveballs. Having an experienced property manager in your corner ensures you stay compliant with local laws, protect your rental income, and maintain a positive landlord-tenant relationship, even when plans change.
Need help managing your rental property or navigating early lease terminations in Denver? Contact us at PMI Elevation to learn how we can support you.