The Law that Allows for Early Termination of Leases
In Illinois, landlords have specific legal grounds on which they can terminate a lease agreement with a commercial or residential tenant. While the interpretation of lease terms and the grounds for early termination may differ from client to client depending on their unique lease agreements, generally, an Illinois landlord effectively terminates a lease early on grounds that the tenant has either breached the lease agreement or has damaged the property in some way. While it may seem like an unusual and unrefined way to do business, not terminating leases that are ultimately in breach of their terms only opens landlords up to risk; thus, Illinois courts strictly interpret all provisions in a lease or rental agreement (even if provisions are missing) to determine whether the landlord is operating in good faith. This means that in the event you do decide to terminate a lease agreement, even if you provided notice to tenants of your intentions, you must be able to prove that you were legally justified in doing so. Common reasons for lease termination in Illinois include the following:
Tenant Breach of Contract: A landlord may terminate a lease in the event that the tenant breaches the terms of a contract – whether by not paying rent, subletting the property without permission, or otherwise violating any provision of the lease. In such cases, landlords may send tenants a written notice that there has been a violation of the lease and that they must comply with the existing terms within a specific amount of time to avoid lease termination.
Property Damage: If a tenant fails to care for the property (by failing to clean , for example, or by causing damage to furniture or appliances by using them improperly or for purposes inconsistent with the lease), that tenant may ultimately be in breach of contract. In Illinois, tenants have a positive obligation to take care of the rental unit, and failing to do so will result in the landlord citing the tenant with a violation of the rental agreement. In the event a tenant caused any permanent damage to the property, for example, the landlord can send them notice to repair the damage in a timely manner. If the tenant fails to fulfill this demand, the landlord may ultimately terminate lease on this basis, particularly when damage to the property was extensive or requires substantial cost to repair. Additionally, damages caused to a property can be a mitigating factor in determining how much rent should be charged after a tenant breaches their lease in an egregious way; for example, if they caused thousands of dollars in damages to the property, a landlord can reduce the amount of rent they charge on that basis to recoup their losses.
Illegal Activity: While judges in Illinois will not often permit termination of a lease agreement solely on the basis that a tenant engaged in illegal activities in the rental unit, they may do so if they find that those activities were criminal in nature. For example, if a tenant was caught dealing drugs on the property, the landlord may terminate the lease agreement on the basis this activity is illegal and ultimately in violation of the lease.
What are a Landlord’s Obligations? What are a Tenant’s Rights?
In situations where early lease termination becomes a consideration, landlords in Illinois are responsible for ensuring that they adhere to any and all laws that govern landlord-tenant relationships. Some of the most notable obligations include:
• Whether you have to honor a termination request by an "at will" tenant or whether you are required to provide a lease break is a matter of Illinois law. Even if the written lease does not specifically address a lease break, a tenant may be entitled to one by operation of law. There is no "one size fits all" rule when it comes to lease breaks in Illinois.
• Just as a tenant is legally prohibited from ending a lease at will based on a desire to leave the rental premises before the lease term expires, a landlord cannot simply terminate the lease without any legal justification in an at-will rental situation. Instead, by statute, a landlord is required to provide six months notice to terminate the lease. ILCS Chapter 735, Section 5—12.
• In order to minimize the burden to landlords when an early termination is requested, the tenant should provide supporting documentation from trusted medical or law enforcement professionals verifying the need for breaking the lease. Not every instance of a tenant’s medical condition or criminal harassment will justify breaking a lease, so a doctor’s note or police report does not guarantee that a demand for a lease break will be honored.
• Illinois case law has established guidelines that require landlords to take all reasonable steps to reasonably recoup the property’s loss following a tenant’s early lease termination. Properly filling a unit – in accordance with the law – is an important step to minimizing a vacancy period.
Providing Notice to Tenants: The Correct Method
When a landlord exercises the right to early termination under Illinois law or a lease agreement, proper notice must be given to the tenant as required by 735 ILCS 5/9-217. In practice, this means that the landlord must give the tenant notice five days before the eviction of the tenant is sought. Note that this does not mean that the tenant can occupy the premises for five more days if the lease is terminated, then just leave. It means that the tenant must vacate the premises within five days. If the tenant doesn’t, the landlord can proceed with eviction.
The notice for early termination must be in writing and, as noted above, must be served on the tenant. Often, however, the tenant cannot be found and is evicted in absentia. This is perfectly fine under 735 ILCS 5/9-217. That statute requires these notices to be "by mail or a copy of the notice left on the first day after the end of the period of notice, at some crack or other place of business or residence upon the premises of the tenant." That means you can simply post notice on the tenant’s door or other appropriate place, but you should also give it to a family member, roommate, or in the absence of anyone, slip it under the door. Postal service is strongly preferred to posting the door, since if someone comes back and claims they never received notice, the eviction may be dismissed. Either way, under these circumstances it is best to have photographs of the location posted or slipped under the door of the apartment to avoid such pitfalls.
Consequences for Illegal Termination
When landlords in Illinois unlawfully terminate a lease, the law grants restrictions and penalties against these landlords. The victims of unlawful lease termination can be helped by seeking financial compensation through the Circuit or District Court. From cases litigated under the Lease by the Day Act, Kent v. Glick, 1952, Circuit Court of Cook County, Illinois; 37 C.R. 109 (Ill. 1952), and Rogers v. Mallon, 1938, District Court of Cook County, Illinois; 18 Ill. C.C. 346 (Ill. 1938), the defendant landlords were held liable for lost rent payments to the plaintiffs. However, if a tenant in Morton Grove, Wheeling, Hodgkins, Flossmoor, Woodridge, Hinsdale or Skokie seeks recovery for damages inflicted by the unlawful actions of landlord, there is no certain winning. This all has to do with the prevailing set of procedural codes used by Illinois courts in processing the tenant’s claim. The Illinois eviction procedures used to hear the complaint lies under Illinois Legislature Cod’s Chapter 735 , Section 5/9 (735 ILCS 5/9). The Security Deposit Interest Act of Illinois that protects residential tenants lies under 765 ILCS 710 (765 ILCS 710). Cod of Civil Procedure of Illinois, Chapter 735, Section 5/735 (735 ILCS 5/735). The Award of Damages in Dispossession of Residential Property Cod of Illinois, Chapter 735, Section 5/9-202 (735 ILCS 5/9-202). New Illinois Statutes Chart of Eviction under 735 ILCS 5/9-109. The cases litigated under 37 C.R. 109 (Ill. 1952) and 18 Ill. C.C. 346 (Ill. 1938) hold that the Court is empowered to award damages to the tenant. Despite these empowering decisions, the damages awarded to the tenant are far outweighed by the court and landlord costs. The landlords bring the tenant into court when the tenant fails to pay all rent owed. Instead of the tenant bringing the landlord into court for unrecovered interest on his/her security deposit, the landlord does the opposite by bringing the tenant into court for failure to pay full rent. By doing so, landlords and their attorney’s costs increase due the civil nature of the eviction procedures followed by the Illinois court systems.
How to Negotiate Early Terminations of Leases
Mutual benefits may be derived from an early lease termination. For example, a landlord may agree to terminate the lease early, return the security deposit, and pay a lease break fee to the tenant in exchange for the tenant agreeing to leave the premises in "broom clean" condition, releasing the landlord from any further obligation under the lease, and executing a general release. The lease break fee should be in addition to refunding the security deposit and not as a substitution for it.
For both the landlord and tenant, the most difficult issues to resolve are: (i) the amount of the lease break fee; (ii) whether the landlord is giving the tenant a credit for any unvested excess rent previously paid; (iii) whether the tenant has any right to request the landlord to use reasonable best efforts to mitigate its damages through reletting the premises; and (iv) whether the tenant has any right to post-termination approval of a new tenant by the tenant.
How an Attorney Can Help
In some situations, seeking legal assistance may be necessary. In either an early lease termination agreement or a court proceeding , a landlord or tenant may wish to seek the advice of an attorney for the preparation of the termination agreement, to preserve their rights, and to ensure that any and all documentations are preserved in accordance with state and federal law.