I'm new to real estate not sure what to do
Member since 2023 · 1 post · 0 votes
I'm new to real estate not sure what to do
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3yQuote from @Brian Gallagher:
You don't say where this is located. The laws are different for each state and it's important you figure out what the laws are. I recommend you check out the website for NOLO where they explain the laws for each state. Even better: buy "Every Landlord's Legal Guide" by NOLO. Written by attorney investors, it's full of practical advice pertaining to management of investment property, has sample forms that can be edited, and - most importantly - they tell you what your primary state laws are and where you can read them. It's updated every year and is the best $40 you'll spend as a Landlord.
But you need a solution now. The law is clear: your Tenant is obligated to fulfill the full term of the lease agreement. If they leave, they remain responsible for rent, utilities, or any other terms of the lease until a new Tenant takes over. The Landlord has to make an effort to find a replacement tenant and minimize the cost to the departing tenant.
You do not have to accept anyone he sends you. Make it very clear that any replacement tenant will have to submit to your screening and approval. Until you find someone that meets your qualifications, the current tenant remains responsible.
I offer my tenants two options:
1. Tenant notifies me of their move-out date at least 30 days in advance and pays me a termination fee equal to one month of rent. They pay rent through the last 30 days and they have to let me market and show the rental to other tenants. When 30 days is up, they move out. I handle the deposit like I would a normal termination, and the Tenant leaves without any further obligation. This works well because it gives the tenant a clean break and good reference, and I can usually find a new tenant to take over shortly after they move out which means more money in my pocket.
2. Stay on the hook until I find a new Tenant. I can usually place a new tenant in 2-3 weeks, but sometimes it can take another 1-2 months. This can get really expensive for the departing tenant so most of them don't take this option.
The DIY Landlord Book4.7244 Reviews
4 Replies
- Real Estate Consultant · San Francisco, CA · Member since 2023 · 109 posts · 71 votes3y
Can you get a copy of the lease he signed with the previous ownership? It's tricky because if you did not make him sign a new lease, he's only bound by his previous agreement. If you made him sign a new lease, did you stipulate the cost for breaking the agreement?
- 3yNathan MillerPro MemberProperty Manager · Grants Pass, OR · Member since 2009 · 429 posts · 202 votes
You in no way are obligated to take on the person he's recommending take over the lease. And by all means NEVER EVER EVER rent to somebody with a recent eviction on their record. It can take a landlord thousands of dollars, and often 3-6 months of lost rent to evict somebody and that's what that person put their prior landlord through.
But in most states you are obligated to advertise the vacancy and if you find a new qualified tenant that moves in before the current lease expires, you can credit them the difference. Otherwise he may owe you the entirety of the remaining lease months - of course depending on how your lease agreement is worded. But if there is 7 months left, it's highly likely you will find a new tenant before then. - Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes3yAloha,
Quote from @Brian Gallagher:
Bought my first rental (5plex) in June. Last week had a tenant (that came with the building) decided he wants to move to Florida with 7 months left in his lease.
Said if he wanted to leave I needed 1 full months rent and he would forfeit his security deposit also said if I was able to rent before the month ended I would return that part of the rent. ( he also owes me some $ for not switching his electric bill right away)
He freaked out and thinks that is very unfair he should loose his security deposit and is trying to find another person to take over his lease now. Not sure what to do.
As others stated, it first of all depends on the terms of the existing Rental Agreement, and local LL/Tenant laws. Your offer is reasonable...the Tenant signed a contract stating he would pay rent for 7 more months. Period. Stand by your offer. - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Brian Gallagher:
You don't say where this is located. The laws are different for each state and it's important you figure out what the laws are. I recommend you check out the website for NOLO where they explain the laws for each state. Even better: buy "Every Landlord's Legal Guide" by NOLO. Written by attorney investors, it's full of practical advice pertaining to management of investment property, has sample forms that can be edited, and - most importantly - they tell you what your primary state laws are and where you can read them. It's updated every year and is the best $40 you'll spend as a Landlord.
But you need a solution now. The law is clear: your Tenant is obligated to fulfill the full term of the lease agreement. If they leave, they remain responsible for rent, utilities, or any other terms of the lease until a new Tenant takes over. The Landlord has to make an effort to find a replacement tenant and minimize the cost to the departing tenant.
You do not have to accept anyone he sends you. Make it very clear that any replacement tenant will have to submit to your screening and approval. Until you find someone that meets your qualifications, the current tenant remains responsible.
I offer my tenants two options:
1. Tenant notifies me of their move-out date at least 30 days in advance and pays me a termination fee equal to one month of rent. They pay rent through the last 30 days and they have to let me market and show the rental to other tenants. When 30 days is up, they move out. I handle the deposit like I would a normal termination, and the Tenant leaves without any further obligation. This works well because it gives the tenant a clean break and good reference, and I can usually find a new tenant to take over shortly after they move out which means more money in my pocket.
2. Stay on the hook until I find a new Tenant. I can usually place a new tenant in 2-3 weeks, but sometimes it can take another 1-2 months. This can get really expensive for the departing tenant so most of them don't take this option.
The DIY Landlord Book4.7244 Reviews
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