Should I refund $ to tenant who moved out & brought next tenant?
We are brand new landlords with a class c duplex and had month to month tenants (4 young guys) who left the place in decent clean condition, gave notice on the 1st and moved by the 6th, paying through the end of the month. Plus, as they were moving out, they brought friends looking for a place and who ended up signing a lease with us. So we are feeling so blessed right not that everything went as well or better than we hoped. Some people are telling me we should refund part of their rent since they paid through the end of the month, to say thank you... We want to run it like a business and also do right by our tenants. How should we handle that?
I would give them some of their rent back. I tell my tenants that they are responsible until the end of the lease. I will try to find a new tenant if they want to break the lease early. I ask them to look for a new tenant also. You might want to see if there are any laws in your state/locality regarding your situation.
#3 Managing Your Property Contributor
Did the new tenants move in before the end of the month?
You said the old tenants gave notice on the 1st and moved out 5 days later, so yes they should have paid rent as they didn't give 30 days' notice. If you wanted to give them a small amount as a thank you, that is your choice, but I would not return their rent unless you were paid twice (ie the new tenants moved in before the end of the month).
@Ann Downer I don't feel like you're obligated to pay them back a portion of their rent since they didn't provide you a proper notice when they chose to leave. It was definitely nice of them to help you find a new tenant too, so as a kind gesture, you can give them a gift card or something small as a token of your appreciation.
Thank you. That's exactly what my husband just suggested.
Old tenants are responsible for the month they left, cause they gave improper notice. New tenants are responsible to pay for days they occupied. You are not ethically entitled to collect rent from 2 people on the same day. If the new tenants moved in before the end of the month where the old tenants left, you should refund those days.
This is a great turn of events here; your tenants (1.) paid for the full month yet vacated before month's end, (2.) left the place in clean condition, (3.) referred new tenants. I'd certainly be inclined to refund them for the days after they moved out, especially if the new tenants moved in before the end of the month.
Any time a lease ends you should do a deposit disposition and refund the deposit minus your expenses to repair (above standard wear and tear of course). The only exception would be a sublease situation where the deposit could be swapped (different managers do this in different ways). Try to be as consistent in the implementation of your policies as possible. That being said, if it was left in good enough shape for others to move in almost right away, they should probably get all or almost all of their deposit back.
That being said, if it was left in good enough shape for others to move in almost right away, they should probably get all or almost all of their deposit back.
Absolutely. If they had left a mess that went beyond the damage deposit, resulting in days of cleaning I would not hesitate to keep it. But when left clean, and someone else moves in quickly, they should get it all back. Double dipping is a no no.
#3 Innovative Strategies Contributor
- Investor
- Greenville, SC
I don't feel the need to double dip on rent; so, I would refund the prorated amount if the new resident moved in prior to the end of the month that was paid in full by the prior resident.
@Ann Downer
1. No you should not be keeping rent from a Tenant if they are not living there.
2. If your Tenants are required to give you 30 days notice, then they are required to give you 30 days notice the enforcement of this is that you may charge the prorated rent amount for the 30 days that notice was not given until you find a new Tenant. For example: Tenant gives you a 5 days notice; they could be on the hook for 25 days (possibly less) if you find a Tenant in 10 days then they are on the hook for 10 days prorated rent; if you find a Tenant in 40 days they are on the hook for all 25 and no more (depending on what your Lease says).
3. If you’re trying to run it like a business then run it like a business: A) Your unit not being left trashed and being left in a presentable condition is EXPECTED not something jaw dropping just like a Tenant paying rent on the 1st as is EXPECTED is also not jaw dropping either - so in my eyes it's not something I would 'reward' or provide an 'incentive' for -- it's just simply what is required under the agreement ; B) you should in most cases (99.9%) always follow what your Lease says —- Let’s see, could it be a fair housing violation that you let this Tenant off without incurring the move-out penalty in the Lease but then decide to enforce it on the new Tenant if they decide to do the same thing?… yes, quite possibly. —- again treat it like a business (which to your credit is what you want to do)
You should run your ‘business’ sternly via your Standard Operating Procedures aka your Lease Agreement but also fairly. So no you should not be keeping the Tenant's rent for days they are not occupying but yes you should be enforcing your 30 day move-out notice and charge accordingly.
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Property Manager
- G3 Management & Investments
- 810-844-1104
- http://www.G3Manage.com
Quote from @Ann Downer:
The law essentially says you can't charge two people rent for the same time period. If the new tenants moved in on the 20th, you should refund the first tenants from November 20 - 30.
Some recommendations:
1. Create a penalty for early termination. This could be a forfeiture of the deposit or it could be that you force them to pay rent through the 30 days (in this case, through December 5th).
2. Be careful when a tenant leaves early but brings a replacement tenant. Make sure you screen the new applicants like you would any other.
3. When Tenant A moves out and Tenant B immediately steps up to rent from you, that may be an indication your rent is below market and that's why they are excited to apply.
Thank you for all the great advice. Just to clarify the new tenants will not be moving in till the 1st of December so we will not be collecting from 2 at the same time.
Thank you. You made good points. I had not thought about the unfair enforcement between tenants and the Fair Housing act.
Quote from @Henry T.:
That being said, if it was left in good enough shape for others to move in almost right away, they should probably get all or almost all of their deposit back.
Absolutely. If they had left a mess that went beyond the damage deposit, resulting in days of cleaning I would not hesitate to keep it. But when left clean, and someone else moves in quickly, they should get it all back. Double dipping is a no no.
Absolutely. If there were a few minor repairs needed, it's OK to charge them for that, but definitely not double dip or try to pocket their deposit just cause.