Early termination fee - house lease contract - 2 months rent OR 'as provided by law'?

Asked over 1 year ago - Wellington, FL

I am the renter about to lease a house for 12 months (monthly rent $3,200). There is an addendum with the lease - 'Early termination fee/ Liquidated damages'. The 2 options states below are mentioned. There is a significant probability that I might end up buying my own house before the lease expires and hence move out of the rented house. I was wondering which of the following options is better for me?

Option 1. I agree to pay $6,400 as liquidated damages or an early termination fee if I elect to terminate the rental agreement and the landlord waives the right to seek additional rent beyond the month in which the landlord retakes possession.

Option 2. I do not agree to liquidated damages or an early termination fee, and I acknowledge that the landlord may seek damaged as provided by law

Attorney answers (3)

  1. 2

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    Best Answer
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    Answered . The other attorneys have given good answers, but are non-Florida attorneys. Some years ago their was a controversial case in Palm Beach regarding early termination fees which lead to a change in the law in Florida. It lead the legislature to write a statute giving the options in the lease addendum you are reading. Liquidated Damages is a legal term essentially meaning "predetermined" or set amount damages. The legislature thought 2 months was appropriate, it modified the then existing law of damages which involved a landlord's "duty to mitigate damages", meaning the landlord had to do their best to re-rent the property so the former tenant who vacated early was not on the hook for the entire balance of the lease. It was seen as unfair that a landlord could charge the former tenant plus get new rents on top of that from a new tenant, essentially getting DOUBLE rent for the balance of the lease. So the duty to mitigate helped with that problem of unfairness in the landlord's advantage. So that is what option 2 means. The problem with option 2 is that it is unpredictable, maybe the landlord can get someone into the place the very next day after you move out, then your liability is ZERO. But what if it takes 4 months to rent it? Then you are on the hook for 4 months of rent as long as the landlord used reasonable efforts to lease the place. So option 1 was given by the Florida legislature as a "compromise", seen as fair to both parties that it should be reasonable to expect that an early terminating tenant is not over-charged, and that it is reasonable that a landlord in a decent market should be able to find a new tenants in 2 months.

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  2. 2

    Lawyers agree


    Answered . Option one avoids all attorney fees

  3. 2

    Lawyers agree


    Answered . I agree with the previous answer and a certain fate is sometimes better. However if you do need to leave and can re-rent the property at no expense whatsoever to the landlord you may not own anything the risk of the house sitting empty for a few months could easily go over the fee and will certainly if the landlord has to sue to get the lost rent. The early termination fee is generally a good thing, you may also ask for a shorter lease with less certainty for your future and higher rent.
    Good Luck

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Related Topics

Property rental agreement

A rental agreement is a contract outlining terms of tenancy for a certain period of time. Short-term rental agreements may renew automatically until cancelled.

Renting property

Rentals are houses, apartments, or similar where the resident pays the building's owner for the right to live there, usually under the terms of a written lease.

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