broken lease-need to travel to show-can I deduct from security de

San Diego · Member since 2017 · 23 posts · 5 votes

Hello- My tenant signed a one year lease (after completing a two year lease) in July. They just called two days ago (October 10th) to tell me they are breaking the lease and will move out and stop paying rent November 1st. They bought a new house and I wish had told me earlier, now I am scrambling to find tenants and will need to rent below fair market value to fill this vacancy. Winter is the hardest time to rent. I may find someone to move in Nov 1st for two months at $400 below the rental rate and may be able to find another 6 month lease on January 1st. I know I can withhold the loss in rent. Can I withhold my expenses for having to travel there to show the property? (airfare and hotel?) I live in CA and the house is in DC. Thank you very much for your time and advice.

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Max T.

Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes

Depends on your local laws and your lease, but in many places you CAN charge a tenant for all of the rent payments throughout the remainder of their lease terms.

Some states require you to mitigate your damages (attempt to re-rent). If you have to lower the rent you CAN charge for the difference, and you CAN charge for costs associated with re-renting. I don't believe your travel costs will count, but marketing/staging will.

Check your local laws!

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Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
8y
its not the tenants fault you live far away . And if you lower the rent I dont believe you can charge them the difference .
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Kim Meredith HamptonBusiness Member
Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
8y
Kate,
That stinks,m but I dont believe that that you can charge for that. Always good to check out your landlord tenant laws
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Gail K.
Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes
8y
No, you can't deduct your expenses for travel from their security deposit. Try that and if the tenants sue you over this any court will agree with them, citing that this is your cost of doing business as a landlord.
Gail
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Max T.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
8y
Depends on your local laws and your lease, but in many places you CAN charge a tenant for all of the rent payments throughout the remainder of their lease terms.
Some states require you to mitigate your damages (attempt to re-rent). If you have to lower the rent you CAN charge for the difference, and you CAN charge for costs associated with re-renting. I don't believe your travel costs will count, but marketing/staging will.
Check your local laws!
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Jenifer Kynor
Fort Collins, CO · Member since 2017 · 273 posts · 91 votes
8y
Hi Kate,
Immediately start posting your property on different listing sites. There are online services that will take care of all of your marketing needs for you. Have you considered hiring someone to just show the property or have anyone you know in DC that would? It may take a little weight off your shoulders as you scramble to find a new tenant.
Although winter is a harder time to lease out a property it's still possible. People are always moving, there are military bases, job changes, etc. You'll find something!
Good luck!
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Aaron Cavazos
Investor · Washington DC, DC · Member since 2016 · 26 posts · 12 votes
8y
I would not deduct the travel expenses or the different in rent price. If they decide to take it to small claims you will probably lose since the tenants don't control where you live or what the difference is in seasonal market value. A D.C. Court will chew you up as a landlord here. Tough situation. I am also in the middle of tenants bailing in October and breaking a lease because of a divorce. Why fly all the way out to show it versus hiring someone?
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Ray Johnson
Irvine, CA · Member since 2016 · 545 posts · 614 votes
8y
@Kate C. @Aaron Cavazos is correct, it's probably cheaper to hire a RE agent here to rent it out for you instead of paying airfare, hotel, meals, etc. Did you have a good realtor here in DC when you purchased the property that you can reconnect with to lease it for you?
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Amy Beth
Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
8y
I would hire an agent to find a tenant. It is not worth your time and a plane fare to handle it yourself. You can then take over rent collection and other landlord responsibilities as you have been once the agent finds a tenant for you. I would make sure you pick the tenant from the applications that the agent collects versus having the agent select the tenant for you.
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Wesley W.
Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
8y
As other have said, I don't think you'd be able to charge the outgoing tenants with your travel expenses. However, it's worth noting that all those expenses (travel/food/lodging) should be allowable deductions against your income so long as they are documented.
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Jeff Filali
Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
8y
Totally depends on your lease agreement and local laws. Most leases if the tenant bails early, you can charge the months they didn't fulfill against the deposit, and collect additional payments if the deposit doesn't cover it.
Lease Agreements should always include an Early Termination Clause such as this:
“If the tenant terminates the lease prior to the X (Time) Lease ends or does not give 30 days notice prior to move out once the lease has gone month-to-month, the tenant is responsible for all rent owed for the remainder of the lease. The landlord will deduct the amount owed from the tenant’s security deposit. If the security deposit does not include sufficient funds to cover the amount owed, the tenant is responsible for paying the additional money owed the landlord for the remainder of the lease."
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