How to End a Lease Early by Mutual Agreement in California: A Tenant’s Guide

In California, breaking a lease can be intimidating, but the law is actually quite balanced compared to other states. Under California Civil Code § 1951.2, if you leave early, your landlord must make reasonable efforts to re-rent the unit ("mitigate damages") rather than letting it sit empty and charging you.

However, relying on a judge to decide if your landlord tried "hard enough" to find a new tenant is risky. The cleanest way to exit a lease without court battles or credit damage is through a Mutual Lease Termination Agreement.

While the California Association of Realtors (C.A.R.) has specific forms for this (Form MOD or NTT), you do not need a real estate agent to do it. You can draft a private agreement. This guide explains how to do it, how to leverage California’s "Duty to Mitigate," and the new 2025 rules regarding security deposits.

How a Mutual Agreement Works in California

A mutual agreement is a voluntary contract where the landlord and tenant agree to end the tenancy on a specific date, releasing the tenant from future liability.

• No "Official" State Form: There is no government-mandated form for mutual termination. It is a private contract.

• Overrides the Lease: A valid mutual agreement replaces the expiration date of your original lease. It legally stops your obligation to pay rent after the agreed move-out date.

• Voluntary: A landlord cannot force you to sign this. If they want to evict you, they must have "Just Cause" (under AB 1482 or local ordinances) and follow strict notice procedures.

When Should You Use It?

1. Breaking a Fixed-Term Lease

If you need to move out before your lease ends, simply leaving can make you liable for the rent until the lease expires or a new tenant is found.

• The "Mitigation" Leverage: Under Civil Code § 1951.2, landlords have a mandatory duty to mitigate damages. If they find a new tenant, you stop owing rent.

• The Strategy: Use this law to negotiate. "I need to leave early. Since the law requires you to try to re-rent the unit anyway, I offer to surrender the keys on [Date] and pay a 'break fee' of [Amount] if we sign a mutual agreement releasing me from the remaining months."

2. "Cash for Keys" (Buyout Agreements)

In California cities with strict rent control (like Los Angeles, San Francisco, Oakland, Berkeley, and Santa Monica), landlords often cannot evict tenants even if they want to sell or move in themselves.

• The Negotiation: Landlords may offer you a "Buyout Agreement" (Cash for Keys) to leave voluntarily.

• Warning: Many cities now require landlords to give you a disclosure form regarding your rights before making an offer. In places like San Francisco or Santa Monica, you also have a right to rescind (cancel) the agreement for up to 30-45 days after signing. Check your local ordinance.

How to Draft the Agreement

Since you likely won't have access to C.A.R. forms, you must draft a clear document.

Required Elements:

1. Title: "Mutual Lease Termination Agreement."

2. Parties: Full names of Landlord and Tenant.

3. Property: The complete address of the rental unit.

4. Termination Date: The exact date you will surrender the keys.

5. Release of Liability: A critical clause: "The Landlord releases the Tenant from all future rent obligations under the Lease effective as of the Termination Date."

6. Security Deposit: Explicitly state that the deposit will be returned within 21 days as per Civil Code § 1950.5.

7. Signatures: Both parties must sign and date the document.

The Risks for Tenants (New 2025 Rules)

1. The 21-Day Security Deposit Rule

California law requires landlords to return your security deposit (minus itemized deductions) within 21 days of you vacating.

• New 2025 Photo Requirement (AB 2801): Landlords are now generally required to take photos of the unit before you move in and after you move out to justify any deductions. If they fail to provide these photos/documentation with the itemized statement, they may forfeit the right to deduct money.

• Deposit Cap (AB 12): For leases signed on or after July 1, 2024, security deposits are capped at one month's rent (with limited exceptions for small "mom and pop" landlords). Ensure your mutual agreement reflects the return of your full deposit amount.

2. Waiving Rent Control Rights

If you live in a rent-controlled unit, a "Mutual Termination" ends your cheap rent forever. Be very careful about signing one unless you have secured new housing or received a significant "Cash for Keys" payout (often tens of thousands of dollars in cities like LA/SF).

Special Rights: Domestic Violence & Military

Domestic Violence:

Under Civil Code § 1946.7, victims of domestic violence, sexual assault, stalking, or elder abuse can terminate a lease early without penalty.

• The Process: You must provide 14 days' written notice and a copy of a restraining order, police report, or statement from a qualified professional (doctor/counselor). You are responsible for rent only for those 14 days.

Military Service:

Under federal law (SCRA) and state statutes, active duty members receiving deployment or PCS orders can terminate a lease. You must provide 30 days' written notice and a copy of the orders.

Frequently Asked Questions (FAQ)

1. Is there an official California form to end a lease?

No. Real estate agents use C.A.R. Form MOD (Modification of Terms) or NTT (Notice of Termination of Tenancy), but these are copyrighted. You can draft a simple written letter signed by both parties.

2. Does the landlord have to find a new tenant?

Yes. Civil Code § 1951.2 imposes a strict duty to mitigate damages. They cannot let the unit sit empty and charge you if a replacement tenant could reasonably be found.

3. When do I get my deposit back?

Strictly within 21 days of vacating. The landlord must include an itemized statement, receipts for work over $125, and (as of 2025) photos justifying the damage.

4. Can I sublet/assign my lease?

It depends on your lease. If your lease does not prohibit it, you generally can. If the lease requires consent, the landlord cannot unreasonably withhold consent (in commercial leases), but residential rules are stricter. Offering a replacement tenant is a great way to "mitigate damages" yourself.

5. How much notice do I need to give if I am month-to-month?

You must give 30 days' written notice to terminate a month-to-month tenancy (Civil Code § 1946). Landlords, however, must give you 30 days (if you lived there <1 year) or 60 days (if >1 year), subject to "Just Cause" limitations.

References:

• California Civil Code § 1951.2 (Duty to Mitigate)

• California Civil Code § 1950.5 (Security Deposits & 21-Day Rule)

• California Civil Code § 1946.7 (Domestic Violence Protections)

• AB 1482 (Tenant Protection Act of 2019)

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