Early Move Out

17 Replies

Hello,

I have run into a situation today. My tenant is being laid off by her employer and will need to break the lease as she found a new job in another state. We have a 2 year lease and are just over 1 year into it. She has been a great tenant so far, never missed payments, kept the unit immaculate, ect.

She asked if she could use security deposit as rent for May and then move May 31st. My question is, should I let her?

My thought is to do so, as she likely doesn't have the money to pay the May rent anyway and allowing her to do this will keep it occupied and she is more than willing to allow me to show it whenever I need. Not using it for last months rent, she may just decide to stay anyway and then I would be trying to evict and creating bad blood ect.

Anything I'm missing?

Thanks

If I were in your situation I would handle it just like you're proposing, to just let her go. You've pretty much got 2 months notice and she's not making it a difficult situation for you so I'd be happy with that.

Probably OK as long as you have already inspected the place closely. It would better if she went May 1st so you still have the security deposit just in case but it comes down to your trust level. Draw up paperwork that she has to sign first before you agree to let her stay stating that she promises to move out no matter what on May 31st because of her job situation so it would be in theory easier to evict if she try to stay past May 31st. Every situation is unique and if they lose their job you have to let them out of the lease.

Also make sure that she knows you will bill her for any damages (if there are any). I've had situations like this in the past, and as long as everyone is clear about expectations up front, it works out fine.

Hi Lance,

I would not change security deposit rules and "approve" of a tenant using it as rent. Instead I would say "hey, I'm willing to work with you regarding breaking the lease, you've been a great tenant, etc... but I'll need the rent every month you decide to stay." "I can, however, promise to get you your security deposit back as quickly as possible and offer you a great reference for your next landlord."

If she's always paid on time like you say, why assume she can't fulfill her obligation to continue paying rent? Allowing her to use the security leaves you no way of recovering expenses for damages and/or clearing out stuff she leaves behind.

She may not pay anyway, but I wouldn't give my tenant the green light to do this.

I hope it works out for you.

Tell her you will give her deposit back the same day she move out base on a walk through. Most landlords will hold the deposit for 30+ days because they are piss the tenant is moving. She did you right you do her right.

Joe Gore

@Lance H.

I personally recommend NOT doing that. My first rental I had a great TENANT. Never any problems as far as I could tell they were amazing. They also broke their lease because they were buying a house. I didn't charge them because they were "great tenant". Fast forward to move out, the house was disgusting, the garage door was broken, appliances weren't working, etc. Thank goodness I had not promised to give back the security deposit and waiting until we could do a full move out. Personally the security deposit is the your only protection.

I also disagree with @Joe Gore . I hold on to the security deposit for a couple of days. I do not do it because I am "upset with the the tenant". I do it so I can make sure I haven't missed anything with the house. I had one tenant who swore they cleaned the carpets. They had also been okay tenants so I said okay. Well the next day the house smelled like cat. I asked for the receipts and she didn't have them. Thank goodness I held onto the security deposit becuase I was able to take it out than!

@Elizabeth C.,

I good landlord can walk through the unit and tell what is wear and tear and what the tenant is responsibly for with one walk through.

Joe Gore

@Joe Gore

Than I am not a good landlord!!

In the states I operate in, the law gives me 21-30 days till the security deposit must be returned. Personally I take 5-7 days to make sure I haven't missed anything, get quotes on any repairs, etc.

@Elizabeth C.,

I guess my experience is different. We had 300 units and we did all repairs in house. The law say 30 or 60 days in some states but we don't wait that long and if the tenant was a good tenant we are there with check in hand after we do a walk through with the tenant and damages are deducted.

Joe Gore

@Lance H. - Really not your problem and the hard part of being a landlord with a heart. This is her problem. I would tell her, pay this month's rent and I will work to replace you as quickly as possible. Otherwise, you (renter) are responsible for the rent for the rest of the term. Stick to your lease and you can do whatever you want once she is out and paid up. Do you have another renter lined up? In most of these situations, I charge the tenant a 1-month penalty for breaking the lease and we sign a release once they move out to that effect...meaning, you should keep the deposit PLUS this month's rent. Beyond that, I rarely take anything a tenant says as being truthful unless I have a very long history with them. All of us here on BP can tell you all kinds of stories.

We just had one in a shared mansion home. There was an issue in the house where the owner allowed a boyfriend to move in with another renter who was supposed to be leaving. A new tenant decided that gave her reason to break her lease...which is didn't. Both parties were unhappy. The renter really wanted to try and rent a home and was pursuing that while planning to stay with family short term and save money. Remember, she had a lease with us. I worked out a 1-month payment for mutual release...that was Tuesday and the tenant was moving out. Friday comes and she lost her new job and now wants to backpedal and stay! I don't manage this one so Owner can do as he wishes. He's kind and allowed her to move back in but what happens if she doesn't get a new job? I never would have let her back in. In a tough economy otherwise "nice" people will do all kinds of things when their back is up against the wall. Plan for the worst, don't trust in what they say but reward them for what they do if you choose to! Happy Investing.

I would try to get a little more help from her than that. I would see if it is possible to get the property a couple days before the end of the month in order to do some touch ups and have it rent ready by the first. Maybe ask for a percentage of the rent. For example if it is $800/m ask for $300 on May first. The rest will be covered with the security deposit and then you still have some money to play with if a cost arises. Then also you are saving them some money by them not living there the last couple days of the month as well.

Joe Gore, I have 21 days to return the security deposit in Wisconsin. If it was a great tenant, I usually have it back in about 7 - 10 days. For a poor tenant it is usually closer to 20 days. The reason for this has nothing to do with resentment for a tenant. I need to follow my state laws and provide the proper forms and documentation. I also need to verify utilities that are leinable have been paid. If a tenant is on the ball and sets up final readings on their last day it still takes a couple more days to generate their final bill and that is usually my biggest delay. Most tenants don't desire to sit around for an hour plus detailed final inspection to make sure nothing is missed. The tub might look great however when I run the water for a couple minutes I find that their is either a squirrel stuffed in the drain or 2 years worth of hair. There are many things that can be missed in a quick walkthrough. A couple posters left on the walls or a door might seem like a 2 minute task until you take it off and realize that there are massive holes. It is foolish to return a full security deposit the on the final walkthrough. If that is a path you decide to take then I would not even collect a security deposit to begin with, why limit your tenant pool if you are not going to utilize the deposit as intended anyway?

@Lance H, I would not touch the security deposit until she moves out, to ensure the place will still be in good shape the last month of her stay. You did not state it explicitly, but I assume you let her break the lease without any penalty. You have already helped her out in that aspect. So, keep the deposit alone.

I just went through this, and it's exactly as Elizabeth Colegrove said - a tenant and his family, that had been excellent tenants for several years, gave me 5 days notice when he lost his job and got another one out of state. Because they were "great" tenants, we hadn't kept up with inspecting the property.

The night they left (3 days into March, and I hadn't planned on charging for the extra days, even though they said they'd be out on Feb. 28th), my contractor did the walkthrough and sent me photos that night. The place was a disaster. It took a month to renovate to the tune of $7K. The tenant never asked about his deposit, which was forfeited when they broke the lease and gave improper notice anyway, and in no way could it have covered the damages.

@Lance H. - if you are inclined to let her stay and use her security deposit, I would ask her for a copy of her job's offer letter with the start date, just to be sure she is actually going to leave when she says she is. If the job falls through, and she has no way to pay the rent and doesn't leave, then you have a possible eviction to deal with.

@Lance H. I agree with what others have said. I would hang onto the security deposit until after the move out. I had a similar situation happen couple months ago. Also great tenants, job in different state, move out early. I have him back the security deposit the day they moved out, but were not totally done moving when I handed it to him and left. (I know what was I thinking!) when I stopped back the next day I noticed there was garbage piled up in front of the house and by the garbage cans, still a few items left in the house and a final bag of trash hanging on the back door...

They had been moving all day and were dead tired. Why not just cut a few corners, it's not a big deal? I got to deal with it.

Luckily these were all small, insignificant problems, but it had taken me a couple hours to do the final cleaning that the tenants should have done.

My lesson learned is to always hang onto a bargaining chip (deposit) until they are gone and you are pleased with the results.

I always want to have a position of control with my tenants. Not mean and overbearing. Kind of a "speak softly but carry a big stick" mentality.

Thank you everyone for the responses, it seems the consensus is hang on to the deposit.

Luckily in this case it won't actually come into play anymore, as the move out is actually going to be 4/30, since she has already paid April rent I will have the deposit until after move out as normal. I'm confident I can fill the unit by then as well so should be almost 0 vacant time.

@Lance H. Don't forget to send the tenant the security deposit accounting within the time specified by your state law. Even if they get nothing back.

Totally agree with Yiv L on this

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