Q: “I would like to get your thoughts on the CARES Act specifically around our ability to charge lease termination fees. We typically charge 2 months’ rent if a resident comes to us and asks to end their lease early. Can we continue charging this fee and still be in compliance with the CARES Act?”
June 25, 2020
Answered by Jamie Burns
The CARES Act prohibits the lessor of a covered dwelling from charging “fees, penalties, or other charges to the tenant related to such nonpayment of rent.” Section 4024(b)(2)(emphasis added). There is nothing in the CARES Act that prohibits the charging of other fees that may become due under a lease unrelated to the nonpayment of rent – such as an early termination fee. Note that as with most provisions of the CARES Act, this provision remains untested in the courts. However, based on the plain language of the Act, you might be within your rights to continue charging this fee. But again, these guidelines and how they will be interpreted by the courts are uncertain.