Lease Early-Termination Fees: How to Set One and Write the Clause

An early-termination fee is a set amount a tenant agrees, in the lease, to pay if they end a fixed-term lease before its end date. It turns an open-ended dispute ("you owe rent until I find someone") into a known price for leaving early. For the clause to hold up, it should be written into the lease at signing, set at an amount that reasonably reflects what an early move-out costs you, and drafted around the situations where state law already lets a tenant leave early without paying it.

This guide covers how the fee works, how to set the amount, what to put in the clause, the statutory exceptions in our state dataset, your duty to re-rent, and a sample clause.

What happens without a clause

If a tenant on a 12-month lease moves out in month five and the lease says nothing about early termination, the tenant has broken the lease. What you can recover then depends on your state's rules on damages and re-renting, and it usually means tracking actual losses: the rent for the months the unit sat empty, advertising, and turnover costs, minus any rent from a replacement tenant. That's slow, uncertain, and often ends in a dispute over the security deposit.

An early-termination clause gives both sides a cleaner option. The tenant knows the price of leaving, and you get paid without proving every dollar of loss.

Early-termination fee vs other lease-break options

Leases handle early move-outs in a few different ways. You can offer more than one:

Subletting and assignment have their own rules and risks; see our guide to subletting rules for landlords.

How much to charge

There's no single legal number in our dataset for early-termination fees. The safer approach is to tie the fee to what an early move-out actually costs you, because a fee that looks like a penalty rather than an estimate of loss is the kind of clause courts refuse to enforce. That's the same reasoning several states apply to late fees. North Dakota, for example, voids contract clauses that fix damages in advance unless actual damages would be impracticable to determine (N.D.C.C. § 9-08-04), and California enforces a pre-set residential fee only if it's a reasonable estimate of the landlord's actual damages (Cal. Civ. Code § 1671).

To build a defensible number, add up your typical cost of an unplanned turnover:

• Vacancy: how many weeks it usually takes to re-rent a unit like this one in your market, times the weekly rent.
• Marketing and showings: listing fees, photos, your time.
• Screening and lease-up: any costs you don't pass to applicants.
• Turnover work that wouldn't otherwise happen yet: paint, cleaning beyond normal wear.

If a typical vacancy runs four to six weeks, a fee around one month's rent is easy to explain. A fee of several months' rent on a unit that re-rents in two weeks is much harder to defend. Write your reasoning down and keep it with your lease template.

A few things to avoid:

• Charging the fee and also collecting rent for the rest of the term. If the fee buys the tenant out, the lease should end on the termination date.
• Taking the fee out of the security deposit by default. Deposit deductions follow your state's deposit statute. Bill the fee separately unless your lease and state law clearly allow the deduction.
• Labeling the fee "nonrefundable deposit." Several states restrict nonrefundable charges or treat them as refundable security; check the rules under security deposit laws by state.

What to put in the clause

A workable early-termination clause covers:

1. Notice: how much written notice the tenant must give (30 or 60 days is common) and how to deliver it.
2. The fee: a fixed dollar amount, or a formula such as "one month's rent at the rate in effect."
3. When it's due: with the notice, or by the termination date.
4. Rent through the termination date: the tenant pays rent until the date the lease ends.
5. Condition and move-out: normal move-out obligations still apply, and the deposit is handled under state law.
6. Effect: once the notice period runs and the fee is paid, the lease ends and neither side owes further rent.
7. Statutory rights: a line confirming that nothing in the clause limits any right the tenant has under state or federal law to end the lease early.

That last point matters more than it looks, as the next section shows.

When a tenant can leave without the fee

Some states give tenants a right to end a lease early in specific situations, and an early-termination fee can't override it.

• Texas: every lease must include language telling tenants they may have special statutory rights to end the lease early for family violence, certain sex offenses or stalking, or military deployment or transfer. If that language is missing, a tenant who ends the lease under those sections is released from delinquent rent (Tex. Prop. Code §§ 92.016, 92.0161, 92.017).
• Colorado, victim-survivors: since May 2025, a documented victim-survivor of domestic violence, sexual violence or stalking owes no more than one month's rent in documented damages for ending a lease early (C.R.S. § 38-12-402, HB 25-1168).
• Colorado, a tenant's death: since September 2025, when a lease ends early because a tenant died, clauses requiring early-termination fees, liquidated damages, repayment of concessions or move-in discounts, or rent beyond the later of the end of the month or 10 business days after move-out are void (C.R.S. § 38-12-801(3.5)).
• Oregon, landlord-reason notices: if you give a fixed-term tenant a 90-day qualifying-landlord-reason notice, the tenant may leave on 30 days' written notice, even mid-term, and you can't charge the early-termination fee or rent after they move out (ORS 90.372).
• Illinois: since January 2026, every new or renewal lease must carry the state's Summary of Rights for Safer Homes, covering domestic and sexual violence housing protections, as page one, signed by each tenant (765 ILCS 752/20).

Federal law and other states have their own early-release rules, including for servicemembers. Before you enforce the fee against a tenant who says they're leaving for one of these reasons, check your state page under landlord-tenant law by state.

Your duty to re-rent

If a tenant walks away without using the clause, don't assume you can leave the unit empty and bill them for the rest of the term. Minnesota, for example, requires a landlord to make reasonable efforts to re-rent an abandoned unit at fair rental value; the lease ends when a new tenancy starts, or when the landlord learns of the abandonment if it fails to try or accepts surrender (Minn. Stat. § 504B.154). Even where no statute says so, advertising promptly and keeping records of your efforts is what makes a claim for lost rent credible.

Sample early-termination clause

Adapt this to your state and have it reviewed if you're unsure. Add it to a new lease with the lease agreement generator, or to an existing lease with a signed lease amendment.

Early Termination. Tenant may end this Lease before the end of the Term by (a) giving Landlord at least [60] days' written notice stating the termination date, and (b) paying an early-termination fee of $[amount] no later than the termination date. Tenant will pay rent through the termination date. On the termination date Tenant will vacate and return all keys, and the security deposit will be handled as required by law. Once these conditions are met, this Lease ends and neither party owes rent for any period after the termination date. Nothing in this section limits any right Tenant may have under state or federal law to end this Lease early.

When a tenant uses the clause, confirm the termination date and fee in writing. A signed lease termination letter works well for this.

A hypothetical example

A hypothetical example: a tenant pays $1,800 a month on a 12-month lease with the clause above and a $1,800 fee. In month seven they take a job in another city. On March 1 they give written notice for April 30 and pay the fee with April's rent. The landlord lists the unit right away, shows it during the notice period under the lease's entry clause, and signs a new tenant for May 15. The original tenant's lease ends April 30, their deposit is returned on the state's schedule, and the landlord's cost of two weeks' vacancy is covered by the fee.

Sources

Official sources cited above (checked 2026-10-27):

• California Civil Code § 1671
• Colorado HB 25-1168 session law
• Colorado HB 25-1108 session law (C.R.S. § 38-12-801(3.5))
• Illinois 765 ILCS 752
• Minnesota Statutes § 504B.154
• North Dakota Century Code chapter 9-08
• Oregon Revised Statutes chapter 90 (ORS 90.372)
• Texas Property Code chapter 92