Discharge of Leases

As with any contract, a lease is discharged when the contract terminates. Termination can occur when all parties have fully performed their obligations under the agreement. In addition, the parties may agree to cancel the lease. If the Tenant, for instance, offers to surrender the leasehold interest and the Landlord accepts the Tenant’s offer, the lease is terminated. A Tenant who simply abandons leased property remains liable for the terms of the lease – including the rent. The terms of the lease will usually indicate whether the Landlord is obligated to try to re-rent the space, which is the case in Illinois. If the Landlord intends to sue for unpaid rent, Illinois requires an attempt to mitigate damages by re-renting the premises to limit the amount owed.

 The lease does not terminate if the parties die or if the property is sold. There are two exceptions to this general rule:

  • Life estate – a lease from the Owner of a life estate ends with then Tenant’s life ends
  • Tenancy at Will – the death of either party terminates a tenancy at will

In all other cases, the heirs of a deceased Landlord are bound by the terms of existing leases.

If leased Real Estate is sold or otherwise conveyed, the new Landlord takes the property subject to the rights of Tenants. A lease agreement may, however, contain language that permits a new Landlord to terminate existing leases. The clause, commonly known as a sale clause, requires that the Tenants be given some period of notice before the termination. Because the new Owner has taken title subject to the rights of the Tenants, the sale clause enables the new Landlord to claim possession and negotiate new leases under his own terms and conditions. A tenancy may also be terminated by operation of law, and in a bankruptcy or condemnation proceeding.

 Breach of Lease
When a Tenant breaches any lease provision, the Landlord may sue the Tenant to obtain a judgment to cover past-due rent, damages to the premises, or other defaults. When a Landlord breaches any lease provision, the Tenant is entitled to certain remedies. The right and responsibilities of the Landlord-Tenant relationship are usually governed by state law.

If a Tenant defaults on the payment of rent, the Landlord has two options:

  • Five Day Notice – Monetary Breach – He may elect to serve the Tenant with five days’ written notice, demanding payment of the delinquent rent within five days after the notice is received. If the Tenant fails to pay the rent, the Landlord may terminate the lease automatically and sue for possession, without further notice. If the Tenant pays the past-due rent, the lease continues in full force.
  • Ten Day Notice – Non-Monetary Breach – Alternatively, (and in cases in which the Tenant’s breach is other than non-payment of rent) the Landlord may terminate the tenancy by service the Tenant with ten days’ notice, including a demand for possession. After the ten-day period expires, the Landlord may sue for possession without further notice, even if the default is cured.

Landlord’s Remedies – Actual Eviction
When a Tenant breaches a lease or improperly retains leased premises, the Landlord may regain possession through a legal process known as actual eviction. The Landlord must serve notice on the Tenant before commencing the lawsuit. Most lease terms require at least a ten-day notice in the case of default. In many states, however, only a five-day notice is necessary when the Tenant defaults in the payment of rent. When a course issues a judgment for possession to a Landlord, the Tenant must vacate the property. If the Tenant fails to leave, the Landlord can have the judgment enforced by a court officer, who forcibly removes the Tenant and the Tenant’s possessions. In Illinois, this would be the Sheriff. The Landlord then has the right to re-enter and regain possession of the property.

In Illinois, a Landlord seeking actual eviction of a Tenant must file an action called a forcible entry and detainer. It can be used when a tenancy has expired by default, by its terms, by operation of law, or by proper notice. The suit should be files in the circuit court of the county in which the property is located.

If the court rules in favor of the Landlord, a judgment for possession (and money damages in some cases, where the Landlord has a reasonable expectation to obtain the funds from the Tenant) will be entered, and an order of possession will be issues by the clerk of the court. The Tenant must then leave peaceably, removing all his property from the premises. Traditionally, however, if a residential Tenant personally appears in court and the Landlord prevails, the court will delay issuing the order for a reasonable period to allow the Tenant to find alternative housing.

When a Tenant refuses to vacate peaceably after a judgment for possession has been entered, the Landlord must deliver the order to the sheriff, who will forcibly evict the Tenant. The Landlord then has the right to re-enter and regain possession of the property.

Until a judgment for possession is issued, the Landlord must be careful NOT to harass the Tenant in any manner, such as locking the Tenant out of the property, impounding the Tenant’s possessions, or disconnecting utilities (such as electricity and gas). Illinois Landlords have no right to self-help; that is, they may not forcibly remove a Tenant without following the proper legal procedures.

 Tenants’ Remedies – Constructive Eviction
If a Landlord breaches any clause of a lease agreement, the Tenant has the right to sue and recover damages against the Landlord. If the leased premises become unusable for the purpose stated in the lease, the Tenant may have the right to abandon them. This action, called constructive eviction, terminates the lease agreement. The Tenant must prove that the premises have become unusable because of the conscious neglect of the Landlord. To claim constructive eviction, the Tenant must leave the premises while the conditions that made the premises inhabitable exist.