Tennessee Lease Agreements
A lease agreement is a legally binding contract between a landlord and a tenant. It grants the tenant the right to occupy a specified property in exchange for payment of rent as well as compliance with the terms and conditions of the lease. The lease agreement creates a contractual relationship between the landlord and the tenant, thereby replacing the implied tenancy relationship that existed before the agreement.
The elements of a lease between a landlord and tenant include:
· Identification of the parties (landlord and tenant)
· Description of the premises (address of property and type of dwelling unit)
· Duration of the tenancy (run of the lease)
· Amount of rent to be paid by the tenant to the landlord
· Due date of the rent (when landlord expects full payment of the monthly rent)
· Any special obligations of the landlord or the tenant
· Signature of the landlord and the tenant
Some of the most common types of lease agreements are month-to-month leases, term leases, periodic lease, ground leases, net leases, indexed leases and full service leases .
Tenants are not required to sign written lease agreements; they are usually covered by oral agreement or the doctrine of implied warranty of habitability. Lease agreements are commonly violated by tenants in the state of Tennessee; therefore, the landlords have remedies available for lease violations.
A landlord should be sure to document the condition of the property at the time of occupancy because tenants may falsely allege that the premises are already in a dilapidated state. A pre-inspection report should be signed by both the landlord and tenant when they enter into a tenancy agreement.
Legitimate Grounds for Breaking a Lease
If you live in Tennessee, there are legally permissible reasons for breaking a lease. For instance, if you have substandard living conditions (or other issues) and your landlord refuses to make repairs to bring the conditions up to Livability Law standards. The good news is if you can prove the issues, you are legally allowed to break your lease. Examples of unsafe and unfit living conditions include: Rodents, insects, insect or snake infestations, raw sewage, blocked toilets and sinks, leaks in ceilings, holes in ceilings, unstable porch, rotting floors, etc. The way to prove the problem is through documented evidence such as pictures, maintenance requests, mold testing, and inspections by city or county housing authorities. Other legal grounds to break a lease involves criminal or landlord violations of Tennessee law such as: In those circumstances, you must be able to prove the violation. For instance, if your landlord has violated fair housing statutes and has discriminated against you in the application process or in how they have treated you when you are a tenant. If you are in the military, you are allowed to break a lease under the Service Members Civil Relief Act (SCRA). You must send formal notice of your intent to vacate in compliance with Tenn. Code Ann. § 49-4-902.
Notice Requirements and the Process
To end a tenancy, a tenant must give "notice" to his or her landlord. Tennessee law does not require notices to terminate tenancies under month-to-month leases or tenancies for less than one year. However, the applicable notice requirements for tenancies of six months or longer in residential rental property contexts are mixed: The Tennessee Uniform Residential Landlord Tenant Act permits a landlord or tenant who has a written lease to terminate a tenancy "in accordance with the terms of the rental agreement," but for oral leases or those lacking termination clauses, most general notices provided in the Act can only be relied upon if the parties are not relying on any other provision of law that already exists.
Regarding termination by the tenant where there is a non-lawful entrance into or occupation of the premises, the tenant must provide a notice of termination that is "at least seven (7) days if the full rental period and notice to terminate is one month or less and at least thirty (30) days if the full rental period and notice to terminate is more than one month." Tenn. Code Ann. § 66-28-512(b)(2).
For a "material noncompliance" by the landlord, i.e. a substantial failure to comply with the rental agreement or tenant’s health and safety is threatened, a tenant must give a "written notice to [the landlord or agent] specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than thirty (30) days after receipt of the notice by the landlord." Tenn. Code Ann. § 66-28-512(a).
If there is a non-conformance with the state fire marshal or local fire authority hazards or defects in the common area of the leased premises, or if there are conditions materially affecting health or safety of tenant, the tenant can give a "written notice to the [landlord or agent] specifying the breaches that materially affect health or safety and specifying that the [tenancy] shall terminate upon a date not less than three (3) days after receipt of the notice by the landlord."
If the premises are uninhabitable without the tenant’s fault, the tenant may lease the premises at "a reduction of rent proportionate to the diminution in rent value," and, by providing notice to the landlord, a tenant may terminate a tenancy as a defense to an eviction action. Tenn. Code Ann. § 66-28-512 (b) & (c).
A landlord is also required to provide written notice of any intention to terminate a tenancy. Tennessee law requires landlords to give 15 days’ notice "prior to . . . the last rental payment date," or gives them "at least thirty (30) days’ notice prior to the expiration of the rental period current when the rental period expires on a date other than the anniversary of the rental agreement." Tenn. Code Ann. § 66-28-512 (a)(1).
Many agreements also require prior notice to be provided before termination. The most reliable method often seems to be providing notice by email, as long as the receiving party’s email address is known and time-stamped.
Whether a lease agreement requires prior notice be provided does not effectuate a waiver or termination of rights as tenant or landlord to provide the legally required notice.
Regardless of the circumstances or reasons a landlord or tenant may have for choosing to terminate a lease agreement, it is important to ensure that the notice provided to the other party complies with the requirements of the agreement and Tennessee law.
Penalties for Early Termination
If a renter terminates a lease agreement without following the law, there are potential consequences. The property owner might be entitled to legal recourse. The following is a discussion of the potential penalties for early termination of a lease in Tennessee.
In Tennessee, landlords can sue for possession of the rented property. The landlord can also sue for damages. Damages might include unpaid rent, any additional costs the landlord incurred because of the termination, and any other issues the landlord experienced. The landlord cannot, however, sue the tenant for the remaining rent for the entire term of the lease because doing so would be an attempt to collect for damages that are not yet due. Such actions are not in compliance with the laws regarding anticipatory breach damages.
While damages are not likely to be more than the amount of the unpaid rent, the tenant should expect to pay the landlord’s court costs and attorney’s fees as well. If the tenant vacates the premises after litigation begins, the court may award possession of the unit to the landlord. The court may not, however, provide possession to the landlord until the property is empty. If the property is empty, but the lease has not expired, the landlord might not recover the damages they are owed if the court does not allow them to keep any rent paid early in the tenancy.
The Tenant Protection Act affords protections to tenants who break a lease due to domestic violence, stalking, or sexual assault. Tennessee Code Annotated § 66-28-512 provides additional remedies for tenants that have suffered from domestic violence, stalking, or sexual assault. Even if the tenant violates the lease prior to breaking it, they are entitled to breach notice.
The Tennessee Uniform Residential Landlord and Tenant Act §66-28-511 authorizes rent escrow. The government permits municipalities to establish a rent escrow program. The local court that oversees the program can instruct the property owner to return the rent payment to the tenant at the end of the 30-day period. The property owner can recover any amounts due plus all attorneys’ fees incurred in obtaining a repair order.
Tennessee landlords can include lease termination penalties in the rental agreement. However, the provisions must be reasonable. Similarly, a landlord might charge a penalty if a tenant vacates a rental unit before the lease expires. This fee might include a lost rental fee, money for cleaning, or the cost of re-renting a unit. The penalty otherwise known as a liquidated damages clause must clearly state the damages.
Both landlords and tenants can be penalized for breaking a lease. Tenants will be required to pay for their early termination unless there is a legal defense. However, the landlord can only collect a fair amount of damages. A tenant can obtain relief if they suffered domestic violence, stalking, or sexual assault.
Negotiating the Lease Break with Your Landlord
Once you have exhausted your options for legally breaking your lease in Tennessee or have gotten to the point where you accept that you may not have a legal exit strategy from the lease, you are left with the possibility of negotiating out of the lease. While many Tennesseans sign one-year leases, life does not stand still and your circumstances may change during that time. As with any contract, both parties are able to renegotiate its terms. While your landlord is under no obligation to renegotiate the lease agreement with you, he or she may be willing to negotiate a termination of the lease.
If your lease is based on square footage, you may be able to offer to pay back the proportional amount of the lease left on the lease if your landlord is willing to negotiate an early termination . If your lease is based on occupancy, you may have an easier time finding someone to take over the lease. In this scenario, you will very likely need to pay the brokerage fees of both real estate agents hired by the landlord and the person subleasing from you.
In both scenarios, you may not gain anything materially from the arrangement. However, if the alternative is waiting out the lease term, these options can be appealing. Remember that most landlords are businesses trying to make money in the real estate industry. For them, an affordable and expeditious termination of the lease agreement that saves them overhead expenses such as advertising the lease or realtors’ fees can make sense. If all else fails, your landlord may feel a sense of duty to mitigate damages and agree to the termination.
Legal Options and Tenant’s Rights
For various reasons, a tenant may find him or herself in a position in which they need to break the lease on their rental property prior to its expiration. Fortunately, Tennessee law offers certain legal options and protections to tenants.
Under the Tennessee Uniform Residential Landlord and Tenant Act (UTRTA), with limited exceptions, landlords may not terminate a lease "without written agreement of the parties or by order of a court." This means that unless the lease itself states otherwise, a landlord must have a legal reason for terminating the lease and evicting his or her tenants. Examples of legal reasons include failure to pay rent, failure to comply with lease terms and a tenant’s disruptive behavior.
That said, if a tenant wants or needs to move out of the rental property, he or she is not legally permitted to break the lease without repercussions. Instead, the tenant will likely be held financially responsible for any rental payments that are due beyond the expiration of the lease until the property is leased to another tenant. The tenant will also likely have to come up with some amount of money to cover the landlord’s costs associated with re-letting the property, which will almost certainly include lost rent between the previous tenant’s departure and the new tenant’s arrival as well as advertising costs.
However, a tenant in Tennessee is not without legal recourse when it comes to breaking a lease. Through the Tennessee UTRTA, a tenant has the legal right to terminate his or her lease if the rental unit becomes uninhabitable or is subject to domestic violence. A rental unit is considered uninhabitable under the Tennessee UTRTA if there is a "failure to supply… hot or cold running water… heat… natural or LP gas… electricity… hot and cold water… … garbage removal… [or] adequate sewage removal…"
In addition, a tenant who has been a victim of sexual assault or domestic abuse has the right to terminate the lease without penalty even if the property he or she is renting is habitable. In this case, the property must have been rented under an agreement that the abuser has no right to occupy the rental unit. The tenant must give at least 30 days’ notice of terminating the lease.
If a tenant breaks a lease under a situation such as those described above, the tenant is typically released from any financial and legal responsibilities associated with the rental property as well as from the consequences that result from terminating the lease. However, the termination notice still must be given to the landlord in accordance with the terms of the lease and the notice requirements dictated by Tennessee law.
It is critical to understand the rights and responsibilities associated with breaking a lease in order to avoid legal penalties and other negative outcomes. If you are considering breaking your lease in Tennessee, it may be beneficial to consult with an experienced Nashville eviction attorney to ensure that you are taking the appropriate actions.
How to Document the Lease Termination Process
Moving can unfortunately see some of their former tenants abandoning their residence without any information regarding where they can be reached and an address to receive their final bills. Many tenants tend to simply walk away, and hope it will be forgotten. This is not wise. You should consider keeping all of your information in a single folder, amenable to giving it to your former landlord, if he or she approaches you for the remaining rent or utilities. You should also retain a copy for yourself in case it is too expensive or inconvenient to educate them on your departure. You should document all communications you have with your landlord about your termination process. This should include all letters in the mail, or email you received from your landlord, or letters and emails that you sent. You can always make contact by certified mail, which will retain a tangible proof of your correspondences with your landlord. Your former landlord might seek to contract your new landlord, or utility provider, to claim that you owe some undisclosed amount in rent. By keeping a paper trail of your correspondence, you can prove what you did pay, and dispute what you do not have to pay. The best solution is to keep your former landlord out of your new business. The purpose of keeping the records is to document what you paid, proving your position that you paid what you owed, and left the property clean and undamaged. Your records can also refute any false claims that your landlord might make against you.
Obtaining Legal Assistance
Because a lease is a legally binding contract and breaking that contract can have serious legal implications, it is always wise to first try to break the lease as amicably and quietly as possible as outlined above. However, if the landlord refuses to cooperate or if you face any challenges relating to your ability to break the lease legally , it is always a good idea to seek legal advice or input from a qualified attorney.
A good attorney will give you clear guidance on how to approach the landlord, how to negotiate the terms of breaking the lease, and what to do if the parties cannot find common ground. Although there may be fees associated with hiring an attorney, the expense may ultimately be worth it if it allows you to find a pathway to breaking the lease legally and fairly.