Need help quick. Tenant wants to break lease.

General Landlording & Rental Properties
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Need help quick. Tenant wants to break lease.

Stephen N.
Accountant · greenwell springs, LA · Member since 2009 · 177 posts · 43 votes

Ok, so here is the deal. I recently purchased a nice middle class home from an out of state owner who was renting it out to a tenant whose lease runs out at the end of July.

I bought the house sub2 and was planning on using the last half of June and all of July to market the house for a lease purchase. Initially I told the tenants I would renew the lease but I would charge more for rent. They weren’t interested. So I gave the current tenants a 45 day notice (as required by the lease) that their lease would not be renewed. I told the tenants that I would probably start marketing the house to sell it and to expect that I would call upon them from time to time to allow me to show the home. They were fine with that.

Well, I get a phone call today from the tenant saying they found another place to stay and they would be moving out at the end of June. I said that’s fine but they still would owe rent for the month of July.

Well, that’s when the tenant just went ballistic. He started out by saying he thought he was doing me a favor by moving out early because it would allow me to market the house and show the house a lot easier. Then he started trying to put a guilt trip on my by telling me that I “bought the house out from under him†and gave him an “ultimatum†by telling him his lease would only be renewed if he agreed to “pay more rent for the same houseâ€. Then he really started getting personal by saying “I don’t have a lot of money like you do. I can’t go out and buy a bunch of houses and sell them. I really need my deposit back. I’m sure my $1,600 deposit is like $16 to you.†Of course this is all a crock of you know what. I don’t have any money either. This house is MY FIRST DEAL and I basically got it with no money down.

So here are my thoughts and I would appreciate any advice you guys have give me. I know the guy owes me the last month’s rent. In a perfect world I think I should be able to demand the last months rent and allow me to show the house any time I want to a prospective buyer. The lease he originally signed specifically says I have the right to show it whenever I want. However, if I make him pay the last months rent I am concerned that a) he will tear the house up before he leaves or b) he will try to stay in the house for another month and make my life a living hell as I try to show it to prospective buyers and then tear it up at the end of july.

So what would you do?

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Michael Rossi
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y

Stephen,

You're in the wrong business. "Selling" a property on lease-option really means that you're getting into the rental property business. The majority of lease-option "buyers" never buy the property. You'll be doing a lot of dealing with angry tenants when they realize you've charged them an option fee and they realize that they aren't buying the house.

Back to the current situation. I agree with Eddie. I would let them go at the end of June without demanding July rent. If you think you're going to "sell" this property in June or July while the property is occupied by an angry tenant, you're sadly mistaken. I guarantee that he's going to tell every prospective tenant what a terrible landlord and person you are. You are the one forcing him out of his house for your own purposes. It is to your advantage to get him out as quickly as possible so that you can get the place ready to "sell". It would be a waste of money to market the property while this tenant is still in there. So, he's doing you a favor by leaving at the end of June.

Good Luck,

Mike

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  • Kel S
    Real Estate Investor · Toledo, OH · Member since 2008 · 234 posts · 53 votes
    17y

    If it were me, I would let them go but NOT give the deposit back until AFTER you do a walk through of the house.

    However, that is me. If it were my husband he wouldn't budge and would insist they pay July rent. Or if he didn't do that he would take the rent out of the deposit and the remainder would be for cleaning cost if there were any. Depending on what the lease said and the law.

    So as you can tell I'm not really cut out to be a landlord...at least on my own. I couldn't deal with tenant very well. Thus, the reason I'm in a partnership so to speak with my husband. He's an attorney and negotiates all the time and can handle people a lot better than myself. So I take care of making phone calls, setting up appointments, etc., and he will deal with direct tenant issues.

    Representing yourself as the "Property Manager" is something I'm pondering. Because that may be a better way to go then opening telling people you own the house.

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  • Eddie Ziv
    Investor · Mableton, GA · Member since 2009 · 1k+ posts · 465 votes
    17y

    Kel S
    " If it were my husband he wouldn't budge and would insist they pay July rent"
    ______________________________________________________
    but, then... He is a lawyer. He can do that... :wink:

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    17y

    I have found that a lot of people need to learn this lesson on their own and the hard way.

    Once you learn it you will understand what everyone here is telling you - until then - it just may not make any sense.

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  • Dennis Treacy
    Contractor · Philadelphia, PA · Member since 2009 · 85 posts · 65 votes
    17y

    Why don't you call him on the comment you “bought the house out from under himâ€.

    I would call his bluff and offer to do a rent to own with him. Make the rent increase part of a larger rent credit.
    Move the $1600 into the option consideration payment.
    Hook the tenant up with a credit repair company and sell him the place.

    On your end there would be no reason to clean, paint, or market the place.

    Lease optioning houses in a falling market is not all it is cracked up to be. Don't believe for a second the tenants are not going to ask you to fix what breaks, they are not stupid enough to believe the place is theirs until they have the deed.

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