Early Termination of Lease Agreements
University Student Legal Services continues to receive questions regarding COVID-19 and a tenant’s ability to terminate a lease as a result. In general, a landlord cannot be held responsible for acts of third parties or acts of nature, as such COVID-19 does not create a unilateral right to terminate a lease.
North Carolina has yet to provide a legal right to terminate a lease due to concerns of COVID-19. Although there is currently no pending legislation or executive order that would change this, we encourage students to periodically review our social media (Facebook and Twitter) where we will continue to post changes in law and other resources relevant to the student population.
North Carolina law does allow for the early termination of a lease, upon providing the landlord with 30 days’ notice, for certain military members (See NCGS Sec. 42-45) and victims of domestic violence, sexual assault or stalking who have a valid order of protection issued by a court (See NCGS Sec. 42-45.1).
If you do not have a statutory right to terminate your lease early, look to the language of the lease itself to determine whether the lease creates such a right. Sometimes referred to as a “buy-out option” some leases will allow a tenant to terminate upon providing written notice and paying a buy-out fee.
If your lease does not provide a right to terminate, it may be possible to modify the terms of the lease to allow for early termination. All signatories to the lease must consent to any modification. If you have a joint and several responsibility lease, with multiple tenants having signed the same lease, it will be necessary for all signatories to consent to an early termination.
Most landlords will not agree to an early termination of the lease. For those that will consider an early termination, most require the tenant to pay the value of at least two (2) months’ rent as consideration for the landlord’s agreement to terminate.
If a tenant does not have a right to terminate and the landlord refuses to consider a modification of the lease agreement allowing for termination, it may be possible to find a replacement tenant to take over your lease responsibilities (i.e. an assignment or a sublease).
Many leases prohibit assignment or subletting. For those that will consider assignment or subletting, the vacating tenant must have the written consent of the landlord. Many leases require the vacating tenant to pay a fee if the landlord agrees to an assignment or sublease. If it is a joint and several liability lease, the vacating tenant will also need the consent of all signatories to the lease, landlord and tenants.
The vacating tenant’s responsibilities may continue after vacating. The language of an assignment or sublease agreement will determine whether and to what extent the vacating tenant remains responsible.
In a true assignment, responsibility for the lease obligations transfers to the replacement tenant, the assignee. In a sublease, the vacating tenant remains liable should the replacement tenant, the subtenant, breach the lease (i.e. fails to pay rent, causes damage to the premises); however, the vacating tenant should maintain a right to pursue those damages against the subtenant in court.
Further questions can be addressed directly to University Student Legal Services by calling 919.515.7091 or emailing at firstname.lastname@example.org