Break Lease Early - Milwaukee

11 Replies

A tenant of mine who moved in July 1st has informed me that they will be moving out March 2nd due to a change of employment resulting in a move to the East Coast.  They have been good tenants and are a nice couple so I would like to end this mutually as possible.  

They have offered to find a sublease; however I have a no sublease clause in the lease.  March 2nd is not exactly an ideal move out date and according to Wisconsin statute the tenants are entitled to pay rent until I find an acceptable tenant to move in.

I am thinking of proposing the following:

Agree to mutually end lease 3/31 and use their security deposit to pay March's rent.  I do have a clause that the security deposit won't be used for the last months rent; but then again they also have a year long lease.

Any thoughts or suggestions are appreciated!

I would not offer to have them use the security deposit for last month's rent.  What if they leave damages?  You will then have nothing to cover it.

I dont know therental market there, but in Jersey City I find its easy to rent out within a month of listing. So what I am currently doing is, in case a tenant breaks a lease, they pay me a month's rent as penalty. And we're good.  I also charge to their deposit whatever it takes me to hire  help to clean out their apartment for a new tenant to move in

I charge a $500 sublet fee and the tenant is still responsible for the rent until a new tenant is secure.  I do all the advertising and showings and only allow the current tenant to offer referrals.  

Do not let them use the security as a last months rent.

We have an early lease termination clause in our lease for situations like this.

When we had this situation (really nice tenant who had an unexpected employment change), we advertised immediately, and stated in the ad that a candidate with a flexible move-in date was preferable, e.g. between March 1 and April 15 (our dates were actually between Mid-August and late September).  Outgoing tenant really appreciated us working with him to allow him flexibility in his somewhat complicated move. He said that he would pay one extra month, he just would like a refund when the new tenants actually started paying, whenever they moved in. His 'penalty' paying double rent turned out to be only about two weeks worth. We lost nothing, just passed on the first month's partial rent from new tenants to the old tenant as a refund. New tenants were a couple moving in together, his lease ended one month and hers the next, so it worked out great.  YMMV, but open communication with tenants usually results in a plan agreeable to all.

Note, we do like to have our one-year leases start and end Aug 1, so the first lease we made with the new tenants was just for 10 months.

Definitely do not ever use a security deposit for rent payment.

Thanks for the feedback, apparently they decided to sublease themselves as I have been receiving calls today to the effect of "Hi, I saw your apartment listed in the classifieds, I was wondering if you could tell me the address, how much the rent is, and whether heat is included"!!  


I will be adding a early termination clause to my future leases!

@Andy J. maybe I should not say this too loud, but I dont think it serves me well to hold someone to a contract they are no longer interested in. I just feel it causes trouble and headache, because at that moment you loose any sense of cooperation. So I usually try to work with them and find a mutaully acceptable solution.

Here is what I would do: if they want to leave on March 2nd I would aks them to pay half of March and move out on the 1st or 2nd. This should cover the majority of your vacancy cost (PITI). And most tenats will think it's fair to pay half a month rent if you work with them allow them to break the lease. My other concern with sub-renting and finding someone overnight in general is that you have the risk to not have the right tenant. I like to take my time to find the right person, who really like the place, take care better and stay longer.

Then you have basically the whole month of March to get the unit rent ready and show it for a April 1st move in date. I always like showing empty houses better than when they are still occupied, never sure in what condition you find the place. It makes it a win-win.

Also, March is not that bad month for finding tenants. Activity seems to pick up as soon as the snow melts.

Don't be such a hard case.  Get a copy of the transfer letter from their employer and work with them to show the apartment before they move, maybe get them to let you show it Saturdays from 12:00 - 3:00.

If you are already getting calls it sounds like the market is doing well enough.  Treat people like you would want to be treated.  

I like eds response. Don't let them off the hook until you have found a new tenant (who signs on). Sounds like you are already getting calls so that is a good sign. Priority one is don't get burned. Priority two is help your first tenants find a good replacement quickly.

I agree with all the posters comments and suggestions. When I had an early (and mind you did not tell me he was moving out until I stopped by to find an vacant house!) departure, I signed the new tenant to a 5 month lease, so that it ended in the June. My thinking was if they stayed on, I am right back on track with the high time for "rental season." She ended up staying and has been there for 4 years now. Be flexible but stick to your rules. Again, this is a business and need to treat it as such. Based on your high praise of the tenants, they should understand.

Just today I had a tenant tell me she needs to move. The house is musty and she and her daughter have been ill since they've lived there. She's had breathing problems (not related to her smoking of course). Anyway, this tenant typically calls me everyday about something or other and to be honest, I'll not miss her. It's a tough time of year for the house to be empty but we'll just blow out the pipes and leave it unheated. The house needs a major refurb and we were renting it to her at a reduced price just to keep someone in it until we can get to it. (two in front of it) I told her as long as she had everything out by the end of the month, to go ahead and leave. She paid a half month, a reduced month and a full month of rent so it wasn't exactly as we envisioned... We won't try to find another tenant to rent the property "as is" because we don't want similar issues.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here