Tenant lease break situation and re-renting advice

Tenant lease break situation and re-renting advice

Investor · Hyattsville, MD · Member since 2012 · 822 posts · 441 votes
I have a tenant with a lease ending July 31 and is breaking their lease to move somehwhere else instead of wait out the end of their lease. They just moved out early this past saturday .They've been there for 10 years. I explained they are on the hook for the full lease until the unit is re-rented. I've agreed to list it and get cooperation from tenant with showings and pointed out that feb is a slower month to get interest in applicants and that they would be on the hook for additional rent if I couldnt rent it by Feb 1. I've had several showings in jan and one applied, qualified and was approved for Early feb move in. New applicant now says shes available to move in March 1 and not feb 10 as she originally indicated.  If I accepted this new move-in date, I would use current tenants deposit to pay the feb rent. What are my obligations here? It's looking less likely I'll be able to do more showings and result in someone moving in Feb 1 at this point and I already dedicated alot of time grinding out pre-qualifying and coordinating showings in January. The easiest thing is to accept a march 1 move in and forfeit the existing tenants deposit, resulting in no out of pocket to me, but I also know I need to attempt to re-market for rent as quickly as possible, but it seems like I did that already, but just making sure I dont need to keep it listed when I can have this applicant put down a deposit ASAP which she has agreed to. Another thing I can do is try to compromise with the new applicant and see if they will consider a Feb 15 lease start date to hold the unit until they can move in march 1, but again its not my money since the deposit covers the month anyway. So I'd only be getting half the deposit back to the tenant off the back of the new tenant who really wants march 1. My gut says accept march 1 move in and existing tenant forfeits deposit to cover month of feb that was not rented out. Thoughts appreciated!
0Reply
25 views

2 Replies

Jump to latestLatest
  • Dave KushPro Member
    Frankfort, IL · Member since 2022 · 204 posts · 132 votes
    2y

    I would take the 3-1 date if you feel good about the tenant.

    May depend on state, so double check you can confiscate the deposit for that. 

    Personally, I just want them to pay rent or leave so I can get it rented. If this tenant has been paying for ten years, maybe just allocate some of the vacancy reserve for this and move on. 

  • Member since 2018 · 5 posts · 5 votes
    2y

    Hey Jeff,

    I'm sorry to hear about the tenants breaking the lease on short notice, I had something similar happen to me this past year that I had to work through and I learned some good lessons from it.  Long story short it's worth negotiating for better terms with both parties, but ultimately if neither will give you anything I would accept the March 1 move-in date, get the lease signed and collect the deposit ASAP.


    How I'd approach the prior tenant

    Congratulations on having had 10-year tenants!  That's a very successful term and with a relationship that long, you can likely find something that's reasonable for both parties.

    Is there any clause in the lease that specifies what happens if they move out before the term ends?  If there is, I would use that as your anchoring point with them.  In my leases, I have a clause (I can share it with you if you like) that requires they pay an additional 2 months' rent in order to break the lease and I shared that with them.

    Even if you don't have that, I think it's worth offering it to them, say "Hey I know something serious has happened and I want to work with you on that, but it's going to take me a while to prepare the renovation - if I let you off the lease after March, can you pay me the next 2 months' rent?   If it helps, I can serve as a reference for you with your next landlord."  A compromise is likely better than trying to enforce the lease at this point.

    I have filed small claim cases against tenants for breaking their lease in the past, and generally just getting served will convince them to pay.  It's a pain getting a PI to locate them and it costs a few hundred dollars all-in, but if it's worth that to you I've generally been pleasantly surprised with how much I wind up collecting.  Barring that, I would be careful taking the Deposit to pay for the missed rent, because there are some states where that isn't legal and you can wind up getting sued for a lot of money - it's playing with fire if they contest it.

    How I'd approach the new tenant:

    I would offer them a compromise and see if you can find something that works.  In the past what I've offered is to have them sign the lease for the full month in question (In this case starting in February), but giving them the 1st month half-off.  This can be a win-win for both sides and I've had many tenants accept it:
    - You have the unit rented and don't have to show it any more

    - You still collect rent for half of February (vs the status quo of $0)

    - They can get access the property two week earlier (Start of February) and move in at their own pace while still having access to their current place - this can make the move much easier for them!

    If they aren't willing to consider that, I would accept the 1st of March date and get it signed, especially if you're excited about the tenant, then you can move on to the next challenge.  Also I would make sure that if you don't have it in your current leases, you add in a clause about paying 2-months' rent for breaking the lease so you have something really explicit you can point to in case this ever happens again!

Join the conversationCreate a free account to reply, vote on answers and follow this thread.