First day of lease period - tenant no show

20 Replies

I have a strange situation, and I'm not sure how I should proceed.  I have an executed lease with a tenant to start July 6 (yesterday) for 6 months.  He is coming from out of state and is here only temporarily.  He paid a security deposit equal to a full month of rent via Paypal, and our agreement is to pay the full first month's rent on arrival.  

I sent him an email on Sunday asking about his exact time of arrival.  I got no response.  I texted him yesterday and also left a VM.  I know that someone read my text because I used iMessage and it shows that it's been read.  I just sent another text, and it has also been read.  

What should I do?  My gut says that his plans changed, and he is ignoring me.  I would think that with an executed lease and money having changed hands, that I can't just ignore our rental contract and put the apartment back on the market.  He has not taken possession of the property, so I don't really know what process to follow to reclaim the apartment and re-rent it.  

Any thoughts are much appreciated!

Thanks!

@Erin N.  I'm not sure what you should do this time, but in the future I would handle this differently.  Take a non-refundable deposit that holds the property until July 6th. Let the lessee know that if a lease isn't signed and all monies paid in full by 9 pm July 6th, then the property goes back on the market.  I won't sign a lease or give a tenant keys until I have everything I need as far as money, personal information and credit checks etc., and signatures from all interested parties.

  

Since he is legally a tenant due to signing a contract with you, you will need to treat him as a tenant.  Send him a Notice to Quit for non payment of rent.  If that doesn't wake him up to contact you, I don't know what will.

If he doesn't contact you, go through the eviction process. 

You can't rent it out as long as he has a legal lease agreement with you.  So you are up a creek.  

The only way I see you profiting from this is by going through the eviction for non payment of rent.  You will be able to deduct this months rent from his security deposit, plus it will buy you time to see what this guy is going to do.

Nancy Neville

@Erin N. , watch your wording. A "Deposit" must be returned, less any repairs or maintenance, etc; "Fee" can be kept. Consider charging a "Holding Fee" that turns into the security deposit once the lease is signed.

How is the current money you have collected worded in the lease? Did you collect a security deposit? Is the return of the deposit spelled out in a document that you have both signed? 

I wouldn't go spending the deposit just yet.

Open a document on your computer and record all instances of contact between you and him. Note when you sent the texts, email and phone call. I am not sure of your laws regarding eviction and abandonment. Documentation will be your friend.

@Mark Freeman that's not a bad idea. I do have an application complete with references and emergency contact info.  I ran a criminal background and credit check.  I have a lease signed by both parties.  I think that in the future, I'll instead do an agreement and a holding fee that is non-refundable but can be applied to the security deposit or rent once the lease has been executed and all monies are paid to move in.  

@Nancy Neville I can make a claim against for unpaid rent as long as I follow the proper procedure for making a claim against the security deposit.  If anyone sees a flaw in my reasoning here or thinks I'm walking into a land mine please let me know!  Thank you everyone for your input.  It has been very valuable :)

@Steve Babiak of course they can.  It would be just like disputing a CC charge.  Paypal would issue a charge back and then I would have an opportunity to dispute it.  However, Paypal would probably side with the tenant.

I did finally talk with him yesterday.  He said he's in the middle of a family emergency and is no longer coming to town.  Now I want to put together a lease termination document that HOPEFULLY he'll sign (he said he will).  I haven't found much online in the way of templates for early lease termination.  If anyone has any suggestions I'd be very grateful once again!

One lesson learned here is to require the deposit and first (and maybe last) month's rent to be paid in order to validate the lease. That is how my lease is worded; if they don't pay first, last, deposit, the terms of the lease have not been met. 

Family Crisis!  He's making his problems your problems and you want to work with him !

The lease termination is the end of his Lease Agreement he signed already!

Nancy Neville

I've had to sign a couple of early terminations over the years.  I'll see if I have the documents on my computer still.  I don't think it was anything fancy...just something that made it obvious that both the tenant and I were agreeing to terminate the lease early.  

@JD Martin that's where I'm just a tad confused.  The wording of my lease is that the tenant cannot take possession without all up front monies being paid, and it lays out what payments are due when - security deposit, first/last month rent, pet deposit, etc.  The lease is still binding even though he never took possession.  I think I just need to write up a simple early termination agreement, and hopefully I can get him to sign it and agree to liquidated damages in the amount of the security deposit.  I think I still have to send him notice that I'm claiming damages against the deposit.  I'm not sure, though.

@Jen Faulkner that would be wonderful if you could share that with me!  

@Nancy Neville yes, that is true. I'm ok with early termination though.  I'll be able to find a renter for Aug 1.

I think if you took money worded as a deposit, without some type of forfeiture claim, you will have to return those funds. If your lease is worded as you say, then it doesn't sound as if it were ever consummated, which would render the deposit unnecessary. If, for example, the person never paid the deposit either, but signed the lease, and you signed the lease, would you consider the terms applicable? I wouldn't, and I would let a court tell me differently if the tenant wanted to try to sue to enforce the lease. I would simply tear up the lease and go forward. Since he wants out anyway, you're off the hook there, you just are down the river a little bit for having no tenant now and having held the place for someone. 

Seeing how he didn't move in, and if the season was ripe for new tenants, I too would let him off the hook.  However, I would put it in writing, and also give him a huge lecture on why he is lucky that I'm letting him off the hook.  

Nancy

Good advice in this thread. To reiterate/add/summarize: 

1. Word the lease so that it doesn't start until occupancy has been taken, keys have been exchanged, and security deposit/first months rent is in hand.

2. Don't except Paypal. Even if this went better, the tenant has 30 days to take back their payment. 

3. The unit isn't rented until you have CASH IN FIST and a warm body in the unit. Next time treat the unit as available until it's rented (using the requirements I just listed). This will save you a ton of vacancy time. People are flaky, consider this situation the norm instead of a fluke.

The way my leases are worded, he would be responsible for the rent until the start of your next contract with a new tenant. This would come from the deposit obviously.

On deposit amounts, more often than not, I'll ask for 1.5-2 times the monthly rent, depending on their credit check, job history, etc. If it goes sideways, one month is usually enough maybe to repaint, but if they damage the flooring or don't pay, you'll be happy you have more.

Always get full deposit and one months rent in advance of over in.

Lastly, no leniency for a new tenant. I have tenants that have been there for years and if they are a few days late, no problem. But someone who's only been there a month or two, if they are late, I need late fees and a darn good explanation for why it's not going to happen next month.

Anyway, sounds like you're getting the hang of it. Experiences like this will be good for you in the long run

So just to clarify this discussion, if the prospective tenant has signed a lease and paid a deposit, non-refundable pet fee and the first month's rent and they decide they want to cancel the lease (boyfriend/girlfriend breakup), what do I get to keep? The boyfriend says I can keep the deposit just as long as I terminate the lease so they don't have to move in together but I want to do what is legal (I'm in Michigan). Can I keep the deposit, pet fee, and/or first months rent or do I have to give some or all of it back?

Originally posted by @Dante Pirouz :

So just to clarify this discussion, if the prospective tenant has signed a lease and paid a deposit, non-refundable pet fee and the first month's rent and they decide they want to cancel the lease (boyfriend/girlfriend breakup), what do I get to keep? The boyfriend says I can keep the deposit just as long as I terminate the lease so they don't have to move in together but I want to do what is legal (I'm in Michigan). Can I keep the deposit, pet fee, and/or first months rent or do I have to give some or all of it back?

Again, the answer is, what does your lease say? If you have a signed lease, then they are responsible for the rent and you have to allow them to occupy. I would think if you have the first months rent, they are paid through the first month, and you would have to wait until at least the second month in order to start eviction. The renter doesn't get to see what you "get to keep," The lease does.

I think I would explain to them that you have costs and you have a lease with them. You can come to some deal on what is returned and what you keep. But at the very least, I would think you would get to keep some amount to cover until a new tenant is found. From what I understand, the tenant is responsible for the rent until it is re-rented if they break the lease.

Joe

@Dante Pirouz you can try to keep anything but what a court may uphold is different. Normally what is in the lease governs  plus what your local laws support. For the most part that would be  actual damages for time you were not able to rent the property making a good effort. If you have a non-refundable holding deposit that may be upheld too, providing it isn't considered excessive.

If you know they aren't taking a place advertise and start showing as soon as possible.  Worry less about the terminated tenant and concentrate on getting a new one to mitigate your damages.  I have yet to hear a landlord say they received more then a month rent for a terminated residential lease. I suppose it is possible but usually I try to keep the cost for the unrented portion.

@Dante Pirouz Hello, you should go to the PHALA meetings (phala.net) they bring in local judges and this type of issue is discussed. The cost is $40 a YEAR! That is way cheaper then a lawyer and you talk directly to the judge, not the middle man. They also bring in the city manager, police chief, government agencies like the ones that handle section 8 and a lot of other people/groups. But back to your question, in this type of scenario, because you have a signed lease and money in hand which showed intent you are typically entitled to payment until you can get the property rented again by someone else. Also because you may have to lower your payment now due to the winter month you would be entitled to the difference. So if you had it rented for 900 and now you can only get 850 you would be entitled to the $50 difference. With all that said, what are the chances of you getting all of this? Probably low. I would take the first months rent, refund the deposits and have them sign something regarding the payment and cancelling the lease.

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