Returning the property before the end of the term: is there a penalty? How is it calculated?

Life changes — a new job in another city, buying your own home, a change of plans — and suddenly you need to leave the rented property before the end of the term. The first question is always the same: will I pay a penalty? How much? Many tenants end up paying the full penalty without knowing that, in most cases, it should be much lower.

In this guide, you will understand whether there is a penalty for returning the property before the end of the term, how it is calculated proportionally, in which cases there is a full waiver (such as a job transfer), and why formalizing a termination agreement is the safest way to end the lease — all in accordance with the Tenancy Act.

Can I return the property before the end of the contract?

Yes. The tenant may hand the property back before the agreed term — the law does not require them to stay until the end. But, as a rule, this early exit triggers a penalty, set out in the lease (Lei 8.245/1991, art. 4).

The big question — and the one that causes the most loss through misinformation — is the amount of that penalty. As a rule, it is not the “full” penalty: it is proportional to the time remaining until the contract ends. The closer to the end the tenant leaves, the lower the penalty. Understanding this is what prevents paying far more than is due.

How is the penalty for leaving before the end of the term calculated?

The rule is proportionality. The contractual penalty is reduced according to the period of the contract already served (art. 4 of Lei 8.245/1991, together with art. 413 of the Brazilian Civil Code, which requires reducing the penalty when the obligation has been partially performed).

An example makes it clear: suppose a 30-month contract with a penalty of three months' rent for early exit. If the tenant leaves halfway through the term (15 months served), they pay about half the penalty — and not the full three months' rent. If they leave with only a few months remaining, the penalty is even lower. The exact calculation depends on the clause and the time remaining, but the logic is always the same: the more you have served, the less you pay. That is why charging the full penalty, ignoring the time already served, is usually improper — and can be challenged.

Is there any case where no penalty is paid?

Yes — and it is a valuable exception. A tenant transferred by their employer to work in another location is exempt from the penalty, provided they notify the landlord in writing at least 30 days in advance (art. 4, sole paragraph, of Lei 8.245/1991).

This scenario protects those who need to move for work reasons, beyond their control. Outside it, the rule is the proportional penalty. There is also another way to remove or reduce the penalty: the amicable termination agreement. By agreement between landlord and tenant, it is perfectly possible to arrange the waiver or reduction of the penalty — something common when the landlord already has a new tenant lined up, for example. Negotiating is usually better for both sides than ending in conflict.

Why formalize a termination agreement?

The termination agreement is the agreement by which landlord and tenant end the lease by mutual consent. A good termination agreement sets out: the move-out date, the settlement of amounts (including any proportional penalty), the condition of the property (with an inspection), and the return of the security (security deposit).

Formalizing the termination agreement in writing is the safest way to end the lease before the end of the term, because it avoids future charges and disputes over the condition of the property or outstanding debts. Without it, the tenant runs the risk of, months later, receiving a surprise charge for alleged damage or rent; and the landlord, of being unable to prove outstanding items. The termination agreement ties up all the loose ends — and gives peace of mind to both parties.

A practical example: Mariana's job transfer

Mariana rented an apartment in São Paulo for 30 months and, in the tenth month, received a job offer that required moving to another city. The real estate agency told her she would have to pay the full penalty of three months' rent to leave. Mariana nearly accepted — it would have been a considerable amount.

When she sought guidance, she discovered two points in her favor. First: because the exit arose from a transfer by her employer, she could be exempt from the penalty, simply by notifying the landlord in writing 30 days in advance (art. 4, sole paragraph). Second: even if that were not the case, the penalty would never be the full one — it would be proportional to the time remaining. Mariana notified the landlord correctly, obtained the waiver of the penalty, and formalized a termination agreement with an inspection, getting back her security deposit. She saved the equivalent of three months' rent — just by knowing the law. Here, information was money in her pocket.

The most common (and costly) mistakes

• Paying the full penalty. In most cases, the penalty is proportional to the remaining term — much lower.

• Being unaware of the waiver for a job transfer. With the correct notice, there is no penalty.

• Leaving without a termination agreement. This opens the door to surprise charges for damage or debts.

• Not carrying out a move-out inspection. Without it, a dispute over the condition of the property is inevitable.

• Accepting improper deductions from the security deposit. The security deposit may only cover real and documented debts.

Checklist: for returning the property before the end of the term

• Inform the landlord of your intention to leave (in writing).

• Check whether there is a waiver of the penalty (e.g., job transfer) and give 30 days' notice.

• Calculate the penalty proportional to the time remaining (do not accept the improper full one).

• Carry out the move-out inspection and record the condition of the property.

• Formalize a termination agreement with the settlement of amounts and the return of the security deposit.

• Rely on a real estate lawyer to avoid loss.

Frequently asked questions about returning the property before the end of the term

Can I return the property before the end of the contract?

Yes. The tenant may hand the property back before the end of the term, but, as a rule, pays the penalty set out in the lease agreement (Lei 8.245/1991, art. 4). The difference is that this penalty is proportional to the time remaining until the contract ends: the closer to the end, the lower the penalty. Charging the full penalty when a large part of the term has already elapsed is not permitted. The ideal is to formalize the handover and the inspection.

How is the penalty for leaving before the end of the term calculated?

The contractual penalty is reduced in proportion to the period already served (art. 4 of Lei 8.245/1991, together with art. 413 of the Brazilian Civil Code). Example: with a penalty of three months' rent on a 30-month contract, if the tenant leaves halfway through, they pay roughly half — and not the full three months' rent. The exact calculation depends on the clause and the time remaining. That is why the “full” penalty charged without proportion is usually improper.

Is there any case where I do not pay a penalty when leaving before the end of the term?

Yes. A tenant transferred by their employer to work in another location is exempt from the penalty, provided they notify the landlord in writing at least 30 days in advance (art. 4, sole paragraph, of Lei 8.245/1991). Outside this scenario, the rule is the proportional penalty. An amicable termination agreement may also provide for the waiver or reduction of the penalty, by agreement between the parties.

What is a lease termination agreement?

It is the agreement by which landlord and tenant end the lease by mutual consent, setting the move-out date, the settlement of amounts (including any penalty), the condition of the property, and the return of the security. Formalizing the termination agreement in writing, with an inspection, avoids future charges and disputes over the condition of the property or outstanding debts. It is the safest way to end the lease before the end of the term without leaving loose ends.

How can I return a rented property in São Paulo without taking a loss?

By communicating your intention to the landlord, negotiating the proportional penalty (or the waiver, if there is good cause, such as a job transfer), carrying out the move-out inspection, and formalizing a termination agreement. In São Paulo, where amounts are high, a mistake on return (an improper full penalty, abusive deductions from the security deposit) is costly. A real estate lawyer guides the exit so that it happens without undue loss.

Do I need a lawyer to leave a rental contract before the end of the term?

It is not mandatory, but it helps avoid loss. Many tenants pay the full penalty when they should pay only the proportional one, or accept improper deductions on the return of the security deposit. A real estate lawyer in São Paulo calculates the correct penalty, negotiates the termination agreement, and protects the tenant (and also guides the landlord in claiming what is due) — ensuring a fair end to the lease.

Leaving before the end of the term need not be expensive

Returning the property before the end of the contract is a tenant's right — and, in most cases, it does not cost the full penalty that many pay out of misinformation. The penalty is proportional to the time remaining, there is a full waiver for those transferred for work, and an amicable termination agreement can reduce or remove the amount, as well as ending the lease without loose ends.

The secret is to know these rules before accepting any charge — and to formalize the exit with notice, inspection, and a termination agreement. That way, the tenant avoids loss and the landlord receives only what is due.

At Falchet e Marques Sociedade de Advogados, a firm in São Paulo (Av. Paulista), we work in real estate law and leasing — calculating the correct penalty, negotiating termination agreements, and guiding tenants and landlords through the end of the lease. If you need to leave (or take back) a property before the end of the term, it is worth understanding your rights well.

Talk to our team on WhatsApp: +55 11 95901-1854 — and end your lease without undue loss.