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Terms of contract termination by lessor and lessee

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Termination of Contract

Like any other contract, the lease contract also has certain conditions, and when the lessor or the tenant do not follow these conditions, the question of termination of the lease contract arises. The termination of the lease can be brought up by both the lessor and the lessee for various reasons. In this article, we have tried to answer your questions about the reasons that can cause the termination of the lease. We will also examine how to calculate contract termination damages.

What is a lease agreement and how is it terminated?

Lease is a bilateral contract according to which the property owner, who is called the lessor, hands over his property to the property claimant, who is the tenant. According to this contract, the tenant undertakes to pay an amount as rent to the owner or lessor. The terms of payment of this amount can be both in the form of a full mortgage and in the form of monthly rent, which depends on the parties to the contract.

In the lease contract, like other legal contracts, there are conditions for terminating the contract. Many think that the termination of the lease can only be done by the lessor or the owner of the property, but the law also provides for the right to terminate the lease for the tenant.

In fact, the lessor has the right to terminate the contract if the lessee does not comply with the obligations in the lease; The tenant can also file a lawsuit to terminate the lease if the landlord does not comply.

Termination of Contract

What are the conditions for terminating the lease agreement?

Since the lease agreement is included in the category of necessary contracts, after signing the contract, the contract can be terminated only if the reason for the termination is one of the cases provided in the law. These cases are called option in legal terms. Option means the ability of one of the parties to the contract to terminate the contract. In landlord-tenant relations, these items include:

  • Option bet

According to the option of the condition, according to the condition included in the contract, one of the two parties to the contract or a third party can terminate the contract within a certain period of time.

  • Option excuse surrender

If any of the parties to the contract does not fulfill their obligations regarding the lease contract, the other party can use their right of termination and cancel the contract.

  • Bad option

If the leased property has defects that were not mentioned at the time of signing the contract, the lessee has the right to terminate the contract using the same issue.

  • Option violates the condition

In many lease contracts, in addition to the usual obligations, the terms of the contract are also added to the contract. If one of the parties to the contract does not adhere to these conditions, the contract may be terminated.

  • Violation of description

Another thing that gives the tenant the right to terminate the lease is that after the contract is concluded, it turns out that the real price and value of the house is very different from the amount paid. In this case, the tenant can cancel the lease.

Although both parties have the right to terminate the lease in the relationship between the lessor and the lessee, the conditions that allow them to terminate are different from each other. For this reason, in the following, we will explain the terms of termination separately by the lessee and the lessor.

Termination of Contract

Termination of the lease agreement by the tenant

As mentioned above, two termination options apply to the tenant. In this way, the tenant can use them to terminate the rental contract. One of them is the defect option, in which if the tenant notices a defect in the property that was not mentioned at the time of signing the contract, he can terminate the contract. The other is the option of violation of description, which is related to the difference in the real price of the property, the amount that the lessor has placed on the property. If the tenant finds out after signing the contract that the price and the real value of the property are significantly different from the agreed price, he can use the option of breach of description for termination.

Another condition in which the tenant can apply for the termination of the lease is related to the terms of the contract. Terms are usually defined in the contract or lease that allow the parties to terminate for certain reasons. If the lessee has agreed on conditions for termination in the lease, the lessee can apply for termination if those conditions are met.

Apart from the provisions of the contract, the events that happen to the property can also cause the tenant to have the right to terminate. For example, if all or part of the leased property falls into disrepair or is exposed to disrepair, the tenant will have the option of terminating the lease. This damage must be such that it makes that part of the property unusable for the tenant and cannot be repaired.

Finally, one of the most common reasons for terminating lease contracts is the tenant’s relocation before the contract expires. If the tenant decides to leave the leased property before the end of the one-year contract due to various reasons, he can terminate the lease agreement with the agreement and cooperation of the lessor.

Termination of the lease agreement by the lessor

In the lessor-lessee relationship, terminating the lease is not an easy task for the lessor, and only in special circumstances will the lessor be able to terminate the contract. Even if the property is sold, the lessor has no right to terminate the contract unless he has previously agreed with the tenant that one of the terms of termination is the sale of the property. Otherwise, when the lessor sells the house, the new owner of the house must adhere to the terms of the contract until the end of the lease agreement, and the tenant can continue to live.

One of the common reasons why the landlord can apply for termination is non-payment of rent by the tenant. If it is mentioned in the contract that one of the termination conditions is non-payment of rent, then after the tenant delays in paying the rent, the lessor can use this termination condition and void the contract. Here are some examples of other things that can cause a landlord to terminate a lease:

  • The tenant assigns or rents the property to a third party without the permission of the landlord.
  • The tenant uses the property for work that is not mentioned in the contract. For example, commercial use of a residential unit
  • The tenant’s lack of attention to the health of the property; For example, if the tenant is negligent in maintaining the property and does not fulfill the obligations under the lease, the lessor can terminate the lease.
  • Failure to provide correct information by the tenant; For example, many property owners do not rent their homes to single people or large families. If at the time of signing the contract, the tenant provides incorrect information in this regard, and the lessor finds out about this after signing the contract, the right of termination will be reserved for the lessor.

How is the contract termination damage calculated in the lease?

How to calculate contract termination damages depends on the conditions in the contract. In many cases, the amount of termination is determined when setting up the contract and is mentioned in the contract. As a result, to determine the amount of damages for termination of the contract, it is enough to refer to the contract and the party that violated its obligations must compensate the damage caused by paying the termination amount. In some cases, the issue of damage is determined by the mediation of a real estate consultant between the lessor and the lessee. In this case, both parties agree on a specific amount to cancel the contract.

Termination of Contract

But if the relationship between the lessor and the lessee was such that they could not agree on the amount of the termination damages, then the matter should be pursued through legal means. For this, you can use the services of Dadista International Law and Arbitration Institute. Dadista’s lawyers team specializes in various fields such as banking claims, real estate claims, etc. Among the specialized circles of Dadista, services are related to real estate cases. Matters such as the termination of a lease agreement or a declaration of real estate are also included in this category.

Whether you are a tenant, a property owner, or a landlord, you may face many legal challenges when terminating a lease agreement. Dadista’s experienced lawyers will help you to use the best possible way to terminate the lease agreement. Also, the use of an expert and experienced lawyer in the field of real estate matters will help you not to lose in determining the amount of damage caused by the termination of the lease or affidavit and to get your right in full.

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FAQ
How is the lease agreement terminated by the tenant?
The most common reasons for the termination of lease contracts by the tenant are defect, breach of specification, failure to provide the conditions in the contract and relocation of the tenant before the contract deadline.
How is the lease agreement terminated by the lessor?
Non-payment of rent, tenant's lack of attention to the health of the property, commercial use of the residential unit and other cases mentioned in the article are among the most common reasons for termination of lease contracts by the lessor.
How is the contract termination damage calculated in the lease?
In many cases, the amount of termination is determined when the contract is drawn up and it is mentioned in the contract, but if the relationship between the lessor and the lessee was such that they could not agree on the amount of the termination damages, then the matter should be pursued through legal means.

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