tenant broke lease - security deposit?... no keys returned...

19 Replies

I recently purchased a duplex that was rented on both sides.

One of the tenants had a year lease expiring end of September. They "informed" the previous owners that they were moving out by end of July because they bought a house.

Previous owners confirm that they were informed of this, but they did not agree to break the lease.

Unit is now empty. I've redone the carpet and would like to re-rent the unit, BUT:

- They haven't returned the keys. I gave them an address in the letter they received upon transfer of ownership of the property. They did acknowledge receipt of the letter.

- No written agreement on early termination. They didn't pay August or September rent.

- The tenant's attitude during this process pissed me off, so I'm looking to protect myself and also make them pay as much as possible.

@James W.

Rekey the unit and rent it out asap.  

Your most likely not going to get anything from them.  Dont throw good money at the situation, cut your losses and move on.

Good luck

Curt Davis, Real Estate Agent in TN (#00321765)
605-310-7929

I agree, rekey the unit and move on.  They said they were moving out, they moved out, done.  Only about half my tenants turn in their keys, I rekey everything anyways so it doesn't matter to me.

Unfortunately, a bad attitude isn't something we can deduct $$ from the security deposit.

When did you close on the property?  They may have moved out while somebody else owned it, and that somebody else would be the one to handle return of security deposit. 

Other than you have to toss out a set of locks that have no keys, what other damages can you show? The two months of lost rent might get tossed out by a judge, so let's focus on physical damage, and not wear and tear either. 

Yes is not worth the time and money un less you are an attorney or you r bother is an attorney go that route. Move on to the next deal.

This post has been removed.

About the keys - of course I have re-keyed the place, but don't they have legal right to occupy the building since they haven't been evicted and they have a legal contract (lease)?

If they have "abandoned" the place, do I need to send a letter stating that?

I'm fine with moving on (obviously since I already replaced the carpet) - I'm just looking to protect myself. 

I closed in July and the security deposit was transferred to me. 

When we sold our properties I had it put in the contract that they could purchase our properties for such and such amount, which included the Security Deposits, or I could lower the sale of the house, by the amount of the Security Deposit and have it be their responsibility.   They chose to purchase our homes with the lower sale price of our homes making the Security Deposit their responsibility. 

I'm glad I did that (had it in the contract) because a year later, after selling, tenants contacted us regarding their Security Deposit.  So I sent them a copy of the page where it said the new owners were responsible for the Security Deposit. 

So, with this said and done.  Did you have such a contract?  If there was no meeting of the minds between you and the seller, regarding Security Deposits, then the seller is responsible for the return of the Security Deposit, technically.   

But if there isn't any wording to this in the contract, then a Judge may have to step in and make a ruling.  

Nancy Neville

To help other BP members - I just got off the phone with an attorney friend and as a result of our conversation, I'm sending a letter to this effect:

"Dear tenant, we have been advised that you are no longer occupying /unit address/. We are making every effort to re-rent the unit. Your deposit is being withheld for following reasons: non-payment of August rent, cleaning of unit, etc. Please be advised that you are still liable for September rent if we are not able to re-rent the unit. Also, we have not received the keys. Please return them immediately."

Okay, I see the Security Deposit was transferred to you.  You must have posted while I was writing.  

They have left.  You know they have left.  If there isn't anything inside the home, they have abandoned it and you have the right to regain possession of the home. 

Nancy Neville

Originally posted by @Nancy Neville :

Very good letter.  Thank you for sharing that with everyone!

Nancy Neville

 I'm just here to share with everyone. If anyone has suggestions on how to improve, I hope they will post here so we can all get better.

:)

What are your state's laws on abandonment?  See if your attorney suggests a "release of possession" type of form to go along with the letter, with the intent of having the tenant sign that form to demonstrate that they no longer claim possession. 

Originally posted by @Nancy Neville :

When we sold our properties I had it put in the contract that they could purchase our properties for such and such amount, which included the Security Deposits, or I could lower the sale of the house, by the amount of the Security Deposit and have it be their responsibility.   They chose to purchase our homes with the lower sale price of our homes making the Security Deposit their responsibility. 

I'm glad I did that (had it in the contract) because a year later, after selling, tenants contacted us regarding their Security Deposit.  So I sent them a copy of the page where it said the new owners were responsible for the Security Deposit. 

So, with this said and done.  Did you have such a contract?  If there was no meeting of the minds between you and the seller, regarding Security Deposits, then the seller is responsible for the return of the Security Deposit, technically.   

But if there isn't any wording to this in the contract, then a Judge may have to step in and make a ruling.  

Nancy Neville

 Everyone please be aware that such an arrangement is not legal in every state.  It would give recourse against the buyer, but you would still owe the seller their security deposit.

If they owe the money, they do not get their security deposit back.

The attorney's statement seems good. I would have tweaked a little to read

"We are making every effort to re-rent the unit" to mitigate the damages.

It is not clear if this property is in Wisconsin, but take a look on the Wisconsin Department of Agriculture, Trade and Consumer Protection website regarding "terminating tenancy" 
It talks about the tenant sending written notice to the landlord and this starts a 21 day for the return or accounting of the security deposit.  Additionally I believe you can charge the tenant for the advertising and marketing costs to re-rent the property.

Based on the information provided, it is likely (although not assured) that the tenants are still liable for the underlying rent. Generally speaking, most states require the landlord to use good faiths efforts to re-let the apartment before bringing an action to recover any damages as a result of the breach of the lease agreement. 

If your attorney friend is licensed in the state you operate in, I would recommend following their advice to a T, as opposed to relying on information related to the law from anyone online. Laws related to landlord/tenants are highly state specific, and are likely to involve a significant amount of case law interpreting the various rules and statutes cited. As always, the best answer is "talk to an attorney" for more information.

If you cannot afford an attorney, consider seeking help from a local landlord/tenant clinic. Additionally, law libraries typically have practice guides that allow one to read how these cases are supposed to be handled. For more information on the laws that may apply to your particular case, consult the Wisconsin Landlord Tenant Act, found at: http://docs.legis.wisconsin.gov/statutes/statutes/...

Please do not take affirmative legal actions based on the advice of anyone but a licensed attorney in your state. Good luck with your case, and keep in mind settlement is always preferred.

Originally posted by @Steve Babiak :

What are your state's laws on abandonment?  See if your attorney suggests a "release of possession" type of form to go along with the letter, with the intent of having the tenant sign that form to demonstrate that they no longer claim possession. 

I do believe after 15 days or vacancy/not paying rent, the property is considered abandoned. 

Abandonment is 14 days here in WI.

@Matthew Kreitzer "get legal advice" is always the best option. :) My friend is licensed here and I am taking his advice. I'm in somewhat of a unique situation I guess... I have friends that are realtors, lawyers, etc and I get somewhat "free" advice and help. 

@Jeff B. I like that - thanks for the suggestion, it will be in the next letter I send for this type of situation.

Your not going to get any rent from them or the keys most likely.  Keep the deposit and get your own tenants in there.  The money you will spend going after them to get the rent is futile.  New tenants, new terms that you make, and keep moving forward.  

Brandon Ingegneri, Contractor in RI (#41301)
401-301-5528

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