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Roommate wants to break lease in rental

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Bienes Raices

Orlando, Florida

Oct 11 '11, 04:55 PM


My rental has three people (husband, wife, & their friend). The friend called me today and says he can't get along with them anymore and he wants to move out at the end of this month (they moved in in May on a one year lease).

Do I need to evict the whole group now or is there a way to work things out if the two remaining people can continue to pay the full rent amount? Also, how do I handle the security deposit in this situation? Thanks.



Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Oct 11 '11, 05:28 PM
1 vote


The simplest answer is that its not your problem at all. The lease stays in force, they all stay on it. You don't return anything. If he wants some of the deposit, he needs to take it up with the other two. As long as they pay, no problem.



Jon Holdman, Flying Phoenix LLC


Kyle Meyers

Residential Landlord from Indianapolis, Indiana

Oct 11 '11, 05:51 PM
1 vote


I agree with Jon, as long as your lease made them all jointly and severally responsible for rent, him moving out does not remove responsibility from any of them for paying the rent. If they are month to month, they would have to all give notice to move out, if they are on a term lease, they cannot stop paying rent until the end of the term. If the husband and wife want to sign a new lease and remove the third roommate from the lease, you can do that, but don't reduce the total rent.



Bienes Raices

Orlando, Florida

Oct 11 '11, 06:12 PM


Thanks Jon and Kyle...

One other thing -- in the lease it states that the tenant can pay an extra fee of two month's rent if they wish to be released from the lease early. I assume I shouldn't bother to give him that option unless the entire group of three people wants out of the lease?

Would it be better just to remove that clause from any future leases? It is used at the apartment complexes in this area, and I thought it would be a good incentive to keep people from breaking the lease early, so I included it in my lease.



Bienes Raices

Orlando, Florida

Oct 12 '11, 06:56 AM


If he remains on the lease, do I still issue the security deposit to all three people at the point when the married couple completes their lease and moves out? And if so should I issue one check in all three of their names that they all need to sign or just write three separate checks? Thanks.



Randy Rodenhouse

Real Estate Investor from Mount Pleasant, South Carolina

Oct 12 '11, 07:40 AM
1 vote


Bienes,

In general Jon has it correct. I had a recent incident similar to this and that is exactly what I did. When everyone moves out then we inspect the property and give back the deposit (assuming the property is in good condition.)

In terms of the two month's rent if they wish to be released from the lease early, I would not say anything since the others want to stay in the property (I assume). It is not a bad clause since 2 months rent will cover you cost during the time it takes to get another tenant in the property, but it is always best to keep the number of consecutive months with the property occupied and paying the highest possible.

Randy Rodenhouse



Jon Holdman Moderator

SFR Investor from Wheat Ridge, Colorado

Oct 12 '11, 09:26 AM
1 vote


I have a similar clause in my lease. It is my "improper lease termination clause" and the penalty is equal to the security deposit. I have no expectation of getting a dime out of someone who moves out prematurely, but I also don't want to give them a penny of their deposit if they bug out and leave me with an unexpected vacancy. I only do month-to-month leases, so all they have to do is tell me at the beginning of the month that they're leaving and they have given proper notice. I'm actually considering reducing the notice to 15 or 20 days because I have little luck trying to show a property at the beginning of the month when the tenant isn't leaving until the end.

As far as the deposit, when everyone is actually gone, and the appropriate time has passed, you issue one check made out to all the tenants. Put "and" between their names, not "or". All of them gave you the money, you give it back to all of them. They have to sort it out.



Jon Holdman, Flying Phoenix LLC


Keith Barton

Real Estate Attorney from Cleveland, Ohio

Oct 12 '11, 10:06 AM
1 vote


While the information given by everyone in this post has been good information - there are some unanswered questions.

1) Is it the case that the lease is made out so all 3 residents are named in the lease?
2) Did all 3 sign the lease?
3) Does your lease have any clauses with regards to individual tenants or does it treat all tenants the same (e.g., does the lease provide for the ability of 1 named tenant to give notice to move out, or does the lease assume if someone gives notice they will all be moving out)?
4) How was the security deposit paid - was it paid by each individual tenant, or was it handed to you as 1 check or in cash?
5) What do you want to do as far as the couple that would remain when the 1 person moves out? Do you want to continue leasing to them or do you want them gone too?

These are all items that need to be addressed before specific information can be given.

In general I would guess, unless they have been problem tenants, you want the couple to continue leasing the unit - why create a vacancy if you don't need to?

I would also say, the price of the rent is for the unit, not for the persons. Therefore, the rental price of the unit should not change because 1 of 3 tenants move out. If the 2 remaining tenants want to stay, they need to pay the entire rent for the unit (a possible exception would be if they say they can't pay full price and you know you will have a hard time re-renting the place, then you might want to allow a reduced rent to keep the unit occupied and cash coming in....)

Legally speaking, you don't have to evict the 2 remaining tenants unless you want to (and if you want to you have to make sure the lease is structured in such a way that you can do so under these circumstances.)

How to handle the security deposit depends on what the lease says and how it was paid to you. If the security deposit was paid by a single check with the payor being someone other than the tenant moving out (and assuming the lease doesn't call for something else) - technically speaking the tenant moving out didn't pay you a security deposit. He would have to talk to the 3 remaining tenants about getting his deposit from them, and when they move out they talk to you about getting their deposit back.

If he did pay a deposit directly to you, what you do with the deposit 1st depends on how the state statutes say you can handle security deposits, then it depends on how the lease says to handle security deposits, then it depends on how you want to treat the security deposit.

I recommend you take advantage of this learning experience to list any and all items you did not take into account before renting to room-mates - then make sure all of your documents and procedures (and the state laws) allow you to operate how you want to operate....

Generally speaking, a tenant who breaks a lease early by moving out (let's assume proper notice was given and assume there are no damages to the unit) is liable to the landlord for the income the landlord loses by virtue of the tenant moving out early. The landlord must work to mitigate damages by re-renting the place as quickly as reasonably possible. The tenant is no longer liable for lost rent when the term of the original lease expires or when the landlord finds a new tenant - whichever is 1st. In this situation though, if the other tenants stay and pay the full rental price - the tenant is not liable for anything unless the lease has a clause specifically addressing this situation and the clause does not violate state statutes.



Bienes Raices

Orlando, Florida

Oct 12 '11, 10:07 AM
1 vote


Thanks again...I'm just going to stick to the lease and let them sort it out--I don't see why I should allow someone else's drama to make things complicated for me.



Bienes Raices

Orlando, Florida

Oct 12 '11, 11:39 AM


Keith, the lease says they are all jointly/severally responsible--it does not break it down by individual tenant. The security and pet deposit was in the form of a money order given to be me by one member of the married couple--the person who wants to leave didn't give me any money, although I assume he gave his share of the money to the married couple at some point.

I need to brush up on my state's security deposit law--I can't remember whether it using it for unpaid rent is allowed or not.


Edited Oct 12 2011, 11:45 by Bienes Raices


Bienes Raices

Orlando, Florida

Oct 12 '11, 12:31 PM


I looked at their lease again and it says that the security deposit will only be returned if they complete the entire one year lease (among other conditions, obviously). This lease was written by a lawyer in my state.

If this guy is going to stay on the lease, but leave physically, do I still need to get the keys from him when he leaves early? I'm guessing that technically it would be illegal--constructive eviction--to rekey the locks after he leaves, since he is still on the lease.


Edited Oct 12 2011, 12:41 by Bienes Raices


Aly L

Real Estate Investor from Middletown, New Jersey

Oct 12 '11, 12:58 PM


I had a unit with 2 roommates. My lease, written by an attorney in that state (FL), said the security deposit can only be returned to one tenant when there are multiple adults. They had to identify which one of them would get it back. And of course, that's the tenant that skipped out. The other tenant couldn't afford to stay much longer and asked for the security deposit when she left. My attorney said it could only be returned to the tenant stated in the lease and she disappeared.

Good question about the keys. I'm curious about that since your departing tenant isn't exactly disappearing.



Bienes Raices

Orlando, Florida

Oct 12 '11, 02:08 PM


^ Supposedly the other two people are going to try to find a substitute roommate to move in with them now (I'm not letting anyone they choose move in without going through my screening though). I'm starting to see what a can of worms roommate situations can be now (I guess someone has to keep Judge Judy and Judge Joe Brown in business)



Bienes Raices

Orlando, Florida

Oct 13 '11, 09:18 AM


Now they are not answering or returning my phone calls. Why do I get the feeling this will not end well? :sigh: If I don't hear from them soon I'm going to drive over there and find out what's happening.



Bienes Raices

Orlando, Florida

Oct 13 '11, 09:39 AM


OK I did hear from them. They are going to be posting an ad on craigs and showing the vacant room and I will process the applications from the new applicants as they come in.

Should I start a brand new lease once the new person is found or is there a way to substitute the new tenant for the old one (who is moving out) on the original lease?



Keith Barton

Real Estate Attorney from Cleveland, Ohio

Oct 13 '11, 10:04 AM
1 vote


If the old tenant gave you notice that he is leaving by a certain date, then he is canceling his lease. Just because his name is written on the paper does not mean he is still a tenant. Therefore, once he is gone - you should not have to worry about replacing the locks being considered constructive eviction (as long as you give the keys to the other tenants that is....)

YES, you should definitely issue a new lease to reflect the change in the named tenants. The lease should also address the fact that the security deposit has already been given and will be carried over to the new lease - and while you are at it, specify that the security deposit (if returned) will be returned to the person who gave it to you (as long as this complies with FL law).

Also, given the circumstances you describe and without knowing what, if anything, FL law states about the security deposit and the tenant who is leaving - I would guess he is not due any security deposit from you. If he wants any of it, I would think he needs to get it from the couple.



Bienes Raices

Orlando, Florida

Oct 13 '11, 11:40 AM


^ Thanks. It was suggested to me that the new tenant give his portion of the security deposit to the old tenant moving out, and that the original security deposit remain intact until the entire group moves out. Does that make sense? I was thinking that the new tenant should contribut part of the security deposit--otherwise they have no skin in the game and may not worry about the repercussions from causing damage.



Keith Barton

Real Estate Attorney from Cleveland, Ohio

Oct 13 '11, 11:48 AM


As long as both options are allowed by FL law and the lease, whichever one you go with is up to you - whichever you think makes most sense.



Bienes Raices

Orlando, Florida

Oct 13 '11, 02:45 PM


Is a verbal notice of his departure enough legally to consider him gone? He just told me over the phone. I don't have anything in writing from him.



Keith Barton

Real Estate Attorney from Cleveland, Ohio

Oct 13 '11, 11:18 PM


While written would be better. Verbal is good enough - just confirm with the other tenants that he is in fact gone.



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