Tenant breaking one year lease after 2 and a half months.

El Paso, TX · Member since 2013 · 22 posts · 3 votes

I have some tenants who just got a job in another city. They signed a one year lease and are moving at the end of this month, breaking the lease nine and a half months early. I know that they are obligated for the full lease until I re-rent the apt. Do I collect the full amount of rent remaining on the contract up front and then return the remaining balance when I re-rent the apt., or do I re-rent the apt. and then charge them for the time it was vacant?

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Elizabeth Colegrove

Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes

12y

That is why I have a buyout clause in leases. You can only collect until you have replace the tenant. You have to put a good faith effort. In my areas with a good faith effort, I can get it reoriented with no vacancy. That is why I have in my lease they owe 2 months notice and there is a 2 months fee. Any lack of notice becomes a fee. It is a win win, i get paid for my time and effort. The tenant know exactly what needs to be done to break the lease.

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Alex CraigBusiness Member
Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
12y
The process should be specifically spelled out in your lease. If it is, then go by whatever the lease states. If you lease is is not specific, then do what you feel is in your best interest. But if you get any push back, then understand your tenant could take you to court and more then likely win.
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James Erickson
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El Paso, TX · Member since 2013 · 22 posts · 3 votes
12y
The lease states that the tenant is responsible for the full year, regardless of the reason save those allowed by Texas state law which in this case does not apply. The tenant has no legal ground to break the lease and cannot take me to court. I want to know if the rent owed me is due up front or at a later time when I re-rent the apt.
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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
How long will it take to get a tenant? You're usually obligated (by state law) to make a diligent effort. A mid month move-out here could certainly be re-rented by the end of the month, probably sooner than that. So, you would collect rent on the first of the month for that month, then return whatever portion is covered by another tenant, if any.
IMHO, its highly unlikely you will collect either the remaining nine months when they move out or any money after they move out.
My lease has a clause and a fee for breaking the lease. Its equal to the security deposit. But I know good and well that I'll never see a dime beyond whatever rent I've already collected and the security deposit.
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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
12y
@James Erickson - in my experience it would be due later - If they are moving out July 30th you could collect August rent and refund it if you get somebody by the 15th - but I have never heard of a landlord being allowed to get the whole year upfront
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Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
12y
@Jon Holdmanis right about never seeing anything beyond the security deposit that you already have.
Renting an SFR can be faster than renting a condo that requires association approval, as ours do. Your tenant gave what sounds like 2 weeks notice, and if they're cooperative, they will agree to show the unit to help get it re-rented. Hopefully it's in good condition.
We had tenants that wanted to break the lease to buy a house, but they agreed to keep paying the rent and to show the unit and keep it super clean until we found another tenant who was approved by the association. We lost no rent. But if a tenant had to leave in 2 weeks because of a job transfer, and we didn't find another tenant and get them approved for another month or two...well, we would keep the security deposit and sincerely hope they did no damage and left the place clean.
Some landlords require first month's rent, last month's rent, and a security deposit to move in. That's legal in FL.
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George P.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
12y
U will ruin their credit but not get any more if u push it. I'd ask for two months rent which is enough time for u to find someone else.
I had to do this twice. . At th3 same house. I hated it.
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Elizabeth Colegrove
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
12y
That is why I have a buyout clause in leases. You can only collect until you have replace the tenant. You have to put a good faith effort. In my areas with a good faith effort, I can get it reoriented with no vacancy. That is why I have in my lease they owe 2 months notice and there is a 2 months fee. Any lack of notice becomes a fee. It is a win win, i get paid for my time and effort. The tenant know exactly what needs to be done to break the lease.
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Brett B.
Real Estate Investor · Spring, TX · Member since 2014 · 39 posts · 13 votes
12y
Let them know that they lose their security property and are responsible for paying you every month until you rent it. I just had this issue last month and found new tenant pretty quickly. You can also allow them to sublet if person qualifies with your standards. Did you use a realtor?
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Marcia Maynard
Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
12y
I don't do long leases. I do month-to-month. But if I did do long leases, I would do as @Elizabeth Colegrove does. Have a clause that specifies what will happen if a tenant wants to break the lease. Compensation to the landlord from the tenant for the privilege of breaking a lease seems fair. Keeping the security deposit separate, to cover other things such as extra cleaning, damages, unpaid utilities, unpaid rent, unpaid fees, etc makes sense.
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William Hochstedler
Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
12y
Like @Elizabeth Colegrove we offer a buyout equal to two month's rent. This is a fee for releasing them of their obligation to commit to the full term of the lease. In most cases we can rent it in less than two months and it turns into a win for everyone.
My attorney at one point told me that Utah judges won't award the full unpaid lease amount--only an amount that would cover a reasonable vacancy which runs around 45 days according to him.
This is not legal advise, but the way I understand it, you don't need the clause in the lease to do a buyout. Unless stated otherwise, you can mutually terminate a contract and hold each other harmless at any time.
We intentionally omit the clause from our lease so tenants don't get the idea that they can just walk for a price. However, we do include an assignment clause with a $200 processing fee. And we always want an assignment rather than a sublet because we want the direct contract with the person who is living there. Evicting subletters is messy and you do not have the same goals as the master tenant.
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Richard C.
Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
12y
Your specific question was whether you get the rest of the year up-front, or charge them after the fact. The answer is neither. The rent is due when it is due, until you re-rent. So on the 1st, your next month is due. If you re-rent before the end of the month, you re-fund.
In fact, of course, you aren't getting more checks from them. Just make sure you make diligent efforts to re-rent, and under no circumstances can you be paid double rents.
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