Lease Termination Letter [Free Sample Template Coronavirus Force Majeure Frustration of Purpose Impracticability]

Talkov Law handles California real estate partition actions between co-owners. This lease-termination resource is provided for general information; the firm does not handle landlord–tenant matters.

How to Write a Lease Termination Letter

A lease termination letter can propose an agreed early end to a lease. Sending a proposal does not, by itself, release a tenant from rent or other obligations. Review the lease, identify the proposed termination date, explain the request accurately, and seek a written agreement addressing payment, possession, the security deposit, and any release of claims.

This page preserves a sample originally prepared by Scott Talkov and Colleen Talkov in July 2020 for a commercial tenant affected by coronavirus restrictions. The historical template and spreadsheet remain available below, with clarifications. They are not a universal termination notice or a statement that pandemic relief remains available today.

Before Using the Sample Letter Today

• Have an attorney who handles landlord–tenant matters review the lease, applicable notice requirements, and the facts before asserting a right to terminate.
• Distinguish a request for a negotiated release from a notice exercising an established contractual or statutory termination right.
• Propose clear terms for the termination date, final payments, return of possession, deposit accounting, and any guarantor’s release. Do not assume the deposit is forfeited.
• Document the property’s condition and agree on the process for returning keys. Moving out alone does not establish that the landlord has released you.
• Use only accurate facts and applicable legal arguments. Do not reuse 2020 shutdown dates, emergency rules, or business-loss assertions as if they describe current conditions.
• Obtain a signed agreement documenting the resolution rather than relying on a payment memo or an informal acknowledgment.

Coronavirus, Force Majeure, and Rent Obligations

Coronavirus-related losses do not automatically cancel a lease or reduce rent in proportion to lost sales. The lease language and the effect of the claimed event on performance matter. In West Pueblo Partners, LLC v. Stone Brewing Co., LLC (2023) 90 Cal.App.5th 1179, the court rejected a commercial tenant’s force majeure defense where the tenant admitted it had the resources to pay rent despite pandemic-related business losses.

The sample below presents a historical negotiation position, not a prediction that its arguments will succeed. References to frustration of purpose, impossibility, and impracticability require analysis of the particular dispute. The spreadsheet is a settlement illustration, not a court-approved formula for calculating rent owed.

Free Lease Termination Letter: Historical Coronavirus Template

Historical context: This example concerns a commercial business affected by 2020 restrictions. Its discussion of shutdowns, business conditions, and proposed defenses must not be treated as current facts or copied without review. It has been edited to clarify its limitations; it is not an unaltered historical document.

[Sender’s Name]

[Sender’s Address, Phone Number and Email]

[Date]

VIA EMAIL ONLY

[Recipient Name]

[Recipient Address]

Phone: [Recipient’s Phone]

Facsimile: [Recipient’s Fax Number]

[Recipient’s Email Address]

Re:      [e.g., Proposed Termination of Lease]

Property Address: [Property Address]

Occupant: [Occupant Name(s)]

Landlord: [Property Owner’s Name]

Dear [Mr/Ms.] [Property Manager/Property Owner/Other Party to Contract],

I hope this letter finds you well. Unfortunately, with regard to your lease with [name of tenant(s)], the State of Emergency following the Coronavirus pandemic and [governmental restrictions] in [name of county] County have made continued operations economic infeasible. Accordingly, this letter proposes terms that we suspect will be agreeable to the landlord to terminate the lease dated [date of lease] between [name of landlord] (“Landlord”) and [name of tenant] (the “Lease”), for the premises at [address of leased property] (the “Premises”).

Regretfully, the problems for [name of tenant] began immediately when the State of Emergency was declared by Gov. Gavin Newsom, which included stay at home orders effective March 19, 2020. This shuttered [name of tenant] by operation of law. In an effort to protect their employees and customers, effective the day before, [name of tenant] ceased its operations entirely. While many public leaders and business owners were optimistic at the time that the issues caused by this shutdown would be temporary, that is not what has occurred.

Unfortunately, since the Coronavirus pandemic began, the operations of [tenant], as reflected by its gross sales, have been a small fraction of what they were before the pandemic. Specifically, as shown in Exhibit 1 hereto, the sales from March 18 through [end date of calculation] were [specify small amount]. Thereafter, [the tenant] reopened for [limited operations, e.g., take-out] on [specify date]. However, this resulted in only about [specify percentage of sales] of the normal sales in [specify month of comparison]. Even when [normal operations, e.g. dine-in] was allowed in [specify date, e.g., June 2020], sales were a mere [specify percentage] of what [name of tenant] would normally enjoy.

Even more unfortunate for all parties, on July 1, 2020, the State of California issued new health orders, mandating that [type of tenant’s business, e.g., restaurants] in Orange County must cease indoor operations. An article published by the [name of newspaper] on [specify date] entitled, [name of article] is attached herein as Exhibit 2, for your reference. As for [name of tenant], there is no ability to comply with this new law by providing an alternative means of carrying on its business, meaning they must return to sales that they expect to be about [specify small percentage of sales while governmental restrictions continue] of the normal gross revenue.

Regretfully, this level of gross sales does not begin to cover the fixed costs of the business, most notably the rent to the landlord. While [tenant] has paid [all or most] rent through the date of this letter, the continued financial frustrations and uptick in Coronavirus transmissions has led to the undeniable conclusion that this will be a long recovery for any businesses that are similarly doing next to nothing during this pandemic. Accordingly, [tenant] plans to close its doors effective [specify date].

In connection with this closing, they would like to terminate the lease and turnover possession in a prompt fashion, subject to a written agreement with the landlord. References to emergency eviction rules must be checked against the rules applicable to the specific time and dispute.

The tenant requests consideration of potential frustration of purpose and impracticability arguments, subject to the lease terms, supporting facts, and applicable law. The pandemic alone does not establish these defenses. Related thereto, Civil Code § 1511(2) provides that the performance of an obligation is excused “when it is prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States, unless the parties have expressly agreed to the contrary.” [In this case, there is no clause in the contract addressing what would occur in light of the irresistible, superhuman Coronavirus pandemic that has effectively shuttered certain parts of the American economy. Accordingly, the judicial decisions in California will control. Or, if there is a force majeure clause is the contract, quote the relevant portions of that clause that support your position that the clause applies to the Coronavirus pandemic.]

California liberally applies the force majeure defense, holding that “force majeure…is not necessarily limited to the equivalent of an act of God.” Pac. Vegetable Oil Corp. v. C.S.T., Ltd. (1946) 29 Cal.2d 228, 238. The test for whether a force majeure or act of God situation is present is “whether under the particular circumstances there was such an insuperable interference occurring without the party’s intervention as could not have been prevented by the exercise of prudence, diligence and care.” Id.

For example, in 20th Century Lites, Inc. v. Goodman (1944) 64 Cal.App.2d Supp. 938, the court discharged a defendant’s obligations to pay a plaintiff for a three-year lease of neon light advertising of the defendant’s business after a government regulation was enacted prohibiting the lighting of such signs.

The leading California case on frustration of purpose explains that “the applicability of the doctrine of frustration depends on the total or nearly total destruction of the purpose for which, in the contemplation of both parties, the transaction was entered into.” Lloyd v. Murphy (1944) 25 Cal. 2d 48, 53–54. Under doctrine of frustration of purpose, “performance remains possible but the expected value of performance to the party seeking to be excused has been destroyed by a fortuitous event, which supervenes to cause an actual but not literal failure of consideration.” Lloyd, supra. “This defense applies when performance is not impossible or impracticable, but has become pointless—i.e., the main purpose of a contract has become frustrated. [See La Cumbre Golf & Country Club v. Santa Barbara Hotel Co. (1928) 205 C 422, 425-426, 271 P 476, 477—hotel agreed to pay monthly amount to golf course for use by guests, but hotel burned down].” Cal. Prac. Guide Civ. Pro. Trial Claims and Def. (The Rutter Group) Ch. 9(I)-C, 9:18.

Moreover, impracticability of performance is yet another defense to performance of contract, which applies when “a thing is impracticable when it can only be done at an excessive and unreasonable cost.” City of Vernon v. City of Los Angeles (1955) 45 Cal. 2d 710, 719–20.

In this case, the terms of the Lease clearly delineate an intention and expectation, by both parties, that the tenant would use the Premises as a [specify nature of business]. As such, the March 19, 2020 mandatory stay at home restrictions and the [specify date of later order hindering business] order mandating the [termination of the tenant’s business] within [specify county name] County have effectively frustrated the purpose of the Lease, as [name of tenant] is unable to use the Premises for the specified purpose. This has also made the performance of the Lease impracticable where the only way for the tenant to perform is at an unreasonable cost, i.e., at a guaranteed, extraordinary loss month after month.

Lloyd placed limits on the application of frustration of purpose as follows: “The doctrine of frustration has been limited to cases of extreme hardship so that businessmen, who must make their arrangements in advance, can rely with certainty on their contracts. The courts have required a promisor seeking to excuse himself from performance of his obligations to prove that the risk of the frustrating event was not reasonably foreseeable and that the value of counterperformance is totally or nearly totally destroyed, for frustration is no defense if it was foreseeable or controllable by the promisor, or if counterperformance remains valuable.”

In this case, the Coronavirus pandemic was unforeseeable not only to the tenant, but also to the United States government, as has been reflected by its response. Even the President’s trusted advisor, Dr. Fauci, at one point estimated a death toll of a quarter-million Americans- even with the shutdown that has occurred. As of the writing of this letter, the death toll in America has surpassed [specify death toll in America from Coronavirus], despite the efforts at social distancing. This shutdown has nearly eliminated the need for the services provided by the tenant. Even further, this event was entirely outside of the tenant’s control, but, rather, has occurred due to the contagious nature of the virus and, at least arguably, the slow governmental response. What has occurred has rendered performance of the contract, by way of payment of the rent and operation of the business, impossible or impracticable [OPTIONAL: The [party writing this letter, e.g. the tenant] was already running without sufficient profitability such that there is simply no purpose for the continued performance of the contract.]

[OPTIONAL: While the Coronavirus pandemic ultimately [caused this request for termination or brought the tenants to close their business], there were issues with the [the contract or condition of the property due to the landlord’s lack of maintenance] that predated the Coronavirus pandemic that created the conditions for [this need to terminate the contract or this financial failure]. Specifically, Section [specify section] of the [lease or contract] identifies the [e.g., “Lessor’s Obligations” as follows: “Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, Common Area fire alarm and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area Operating Expense pursuant to Paragraph 4.2”] Contrary to those obligations, [specify the other party’s breaches, e.g., the roof has had repeated and ongoing leaks]. This is shown in the attached [e.g., pictures of the roof, the walls, and the floors attached as Exhibit 3]. These show [e.g., water damage on the roof, water seeping down the brick walls, and water on the floor]. These issues caused repeated damage to [e.g., the business, the tenants’ personal effects, while diminishing the tenant’s reputation as a reputable business].]

For settlement purposes only, the tenant proposes that the parties consider the reduction in gross revenue when negotiating a compromise of rent claims. The attached spreadsheet illustrates this proposal; it does not establish a legal entitlement to proportional rent reduction or prove that rent was overpaid. Any adjustment requires the landlord’s agreement or an applicable legal basis established in court.

We suspect that the Landlord would prefer not to go without the payment of any further rent for [specify number of months remaining on lease] months at the Premises, but rather would prefer to find a new tenant that can make a viable use of the Premises in light of the Coronavirus pandemic.

Accordingly, the tenant offers the landlord a termination of the lease on the following terms. First, the tenant will pay the lump sum of $[specify amount, e.g., two months of rent]. Second, the landlord would retain the deposit already on hand with the landlord of $[specify amount of deposit]. Third, the Tenant will leave the property in broom-swept condition on [specify date that tenant will vacate]. In exchange, the landlord would release the tenant from all obligations arising under the Lease, as expressly stated in a signed termination and release agreement. The tenant is prepared to send a check to the landlord with the memo line “Lease Termination – Paid in Full – Landlord to Retain Deposit” in exchange for termination of the Lease as of [specify date that tenant will vacate]. This check can be sent as soon as the landlord indicates its acceptance.

I hope to hear from your office on these issues by [specify a date about one week away]. I can be reached at [add your phone number] and at [your email address]. [If there is something to be done if the offer is accepted, specify that it will be done promptly, e.g. I can overnight the keys as soon as you confirm your agreement as set forth herein].

Very truly yours,

/s/ [Sender’s Signature]

[Sender’s Name]

Encl.

Historical Settlement Spreadsheet

The original spreadsheet is retained for readers following earlier references to this resource. It illustrates a proposed rent compromise based on reduced revenue. It does not determine the rent legally owed, establish an overpayment, or create a right to withhold rent.

Download the historical coronavirus rent-settlement spreadsheet

Consult an attorney who handles landlord–tenant matters before using this template or spreadsheet in a dispute.

Do You Own the Property With Someone Else?

Ending a lease is different from ending co-ownership. If you own a California home with another person and cannot agree on selling it, a partition action can force the sale of jointly owned property. Talkov Law represents co-owners in California partition actions.