Would you keep last month and securtiy from tenant?

9 Replies

Tenants are getting a divorce and will be moving out 7 months early and breaking the lease. I specifically told them before moving in if they break the lease they would not get their security or last months rent back. I will be out at least 1 month rent minimum from them, moving out early. I kind of feel bad for her since they are getting a divorce she seems to try and is honest.

Would you keep the last month rent and also their security deposit? They are good tenants but with that said they are moving out. I was thinking giving them a couple hundered back if they leave peacfully and clean the place as it was when they moved in.

@Jimmy S. you can't just "keep" an SD. Apart from language in your lease stating that SD and last month's rent are forfeited for breaking lease you must rerent and return all that is not used to offset lost rent. You must diligently try and rerent. If you rerent and find a paying tenant tomorrow. You must return it all. Again you canNOT "keep" an SD. It must be used to offset costs and you must provide an accounting of that within the terms (usually 30 days) of your state laws. Perhaps a Pennsylvania PM will chime in with the specific requirements.

Medium rre 1to1 small sizeBill S., Reliant Real Estate, Inc. | 720 207‑8190

@Bill S. is correct, at least in my experience, and I believe many states have rules where even if you have that type of clause in your lease it is not enforceable. In Maryland, the tenant can sue the landlord and be awarded 3 x the disputed amount if he wins his case.

I just had a similar experience with a tenant losing a job and moving to NJ 6 months into her lease. I told her as long as I got the unit rented the month she was moving out then she would get her security back. She was very cooperative and made sure the apartment was ready to show every time I needed it and made sure it was spotless before the next tenant moved in. I had another tenant moving in the day she moved out so it worked out well for me.

I have however, heard of other landlords in my area not refunding the security deposit when the tenant broke the lease. They had that language in their lease and I do as well, that the security deposit is forfeited when the lease is broken. I haven't heard of this not holding up in court.

What does your lease say? For commercial the penalties can be severe but if you go to court over a residential the judge will probably say 1.5 months or 1.

It does say in my lease

IF TENANT VIOLATES THE LEASE AGREEMENT, THE LANDLORD MAY SUE EACH TENANT IN COURT:

1)TO COLLECT OVERDUE RENT, LATE CHARGES AND MONEY DAMAGES CAUSED BY TENANT’S VIOLATION OF THE AGREEMENTS IN THE LEASE.

2)TO RECOVER POSSESSION OF THE LEASED PREMISES (EVICTION).

3)TO COLLECT FOR UNPAID RENT UNTIL THE END OF THE LEASE OR UNTIL ANOTHER PERSON TAKES POSSESSION OF THE LEASED PREMISES AS A NEW TENANT.

Nate, it sounds like you do not have an early termination fee mentioned in your lease. I have a small fee of $250 for early termination in my lease. If I have a tenant leave mid lease I will start marketing the property immediately or in my normal fashion depending on notice. If a tenant leaves at the end of May and lease is not up for a couple months, I will attempt to release on june 1st barring any larger repairs that will delay the process. The tenant will be resposible for rent until I rerent the property, so if it takes until June 15th for the new tenant to take possession, the last tenant will be responsible for 14 days of june rent as well as the early termination fee of $250. In some cases I will leverage the early termination fee (knock it down) if the tenant cleans up well and is helpful when I need to show the property.

So for your situation, unless you have written documentation that last months rent and security deposit will be forfeited as a result of breaking the lease early I don't think you have a leg to stand on.I would be immediately marketing the property to get it rerented. If you are out rent from the time they leave until you place new tenants then you can take that money from last months rent. Security deposit would then be for any damage and returned as well per state law with a written statement of expenses charged. The final option you could do is to draft up a mutual moveout agreement. Set the terms in that document. State that you will begin marketing the property for rent immediately. State the final day that they will occupy and have possession of the property. Schedule the final walkthrough in this document as well. State that the tenants will assist you in marketing the property by making the property available with notice of a certain amount of time that you guys agree upon. The tenants also agree to clean the property to a certain expectation. Maybe set up a time a week before moveout and do a quick walkthrough to point out areas that need work or the like. Then upon those conditions being met you will collect an early termination fee of (x amount, maybe half a months rent) and will also collect rent from them until the property has been rerented. If they agree to these terms and sign as such then you have a binding agreement but as of right now it doesn't seem like you can keep anything outside of rent from when the leave until a new tenant starts and damages normally due from security deposit.

Good luck

Nate, you can't just "keep" things. You can recover damages as provided by law. They have notified you that they're moving out and you must now diligently look to fill the vacancy with a qualified tenant.

They will owe you rent between the date that they paid through and the date the property becomes occupied again. If they have already paid May's rent and moved out today and you were able to find a new tenant to move in June 1st they would owe you nothing other than any damages to the property (which could be recovered from their security deposit). Your lease doesn't cover any additional damages or fees, at least not what you quoted.

In my lease I give the tenant a "liquidated damages" option where they can break the lease for a fee (I use 1 month's rent + $250) and I can rent right away without refunding their damages (as provided by FL statute 83.595, your state/local laws will probably vary).

"I agree, as provided in the rental agreement, to pay $ (an amount that does not exceed 2 months’ rent) as liquidated damages or an early termination fee if I elect to terminate the rental agreement, and the landlord waives the right to seek additional rent beyond the month in which the landlord retakes possession."

Since you're a landlord and someone is deciding to break their lease and vacate early, you must have a specific clause in your leasing agreement stating what the consequences that you tenants may face.

Most of the time, when someone is trying to end their lease before it expires, the landlord give a tenant at least 2 options:

*  Allows tenant to break the lease and pay an early termination fee of 2 months' rent

*  Allows tenant to find a tenant willing to take over their lease for remainder of the lease,       which will eventually save a tenant on paying an early termination fee.

Security deposit should only be withheld if landlord find damages done to apartment, while tenant lived there. Let's assume that he security deposit was only $1000 and the only damages were done to carpet.  Landlord must show proof of cost estimate for replacing the carpet (~ $300) and must return the rest to the tenant.

Originally posted by @Andrew Feil :

I just had a similar experience with a tenant losing a job and moving to NJ 6 months into her lease. I told her as long as I got the unit rented the month she was moving out then she would get her security back. She was very cooperative and made sure the apartment was ready to show every time I needed it and made sure it was spotless before the next tenant moved in. I had another tenant moving in the day she moved out so it worked out well for me.

I have however, heard of other landlords in my area not refunding the security deposit when the tenant broke the lease. They had that language in their lease and I do as well, that the security deposit is forfeited when the lease is broken. I haven't heard of this not holding up in court.

I don't know your state law. If your lease is contrary to state law, a tenant cannot waive any right that is contrary to it. You can put any clauses you like, but if they assert any loss of legal rights or waive remedies provided for under state laws (federal as well) they would not be enforceable. I avoid having any clauses that make it appear I am unfair, etc because that may sway a judge to rule against me should I have to defend any part of a lease. A perfect example would be a clause stating the tenant must pay any legal fees whether they prevail or not in a lawsuit. IMO, BAD idea. My lease states the prevailing party would be entitled to reasonable attorney fees. As far as the OP, it sounds like they have the wrong idea. They would be entitled to keep what state law dictates if they can prove damages, and nothing more. Security deposits DO NOT belong to the landlord. They belong to the tenant until a legal claim is made against them. Legal is the key word....anything less can cause a lot of problems.

No company avatar mediumJohn Thedford, John Thedford | 239‑200‑5600 | http://www.capehomebuyers.com