We have a tenant who is leaving before their lease ends. What charges/expenses can we hold the tenant responsible for, since they are breaking the lease? Can we charge them for marketing expenses incurred in finding a new tenant? What are the industry standards?
Thank you in advance for your help!
What is stipulated in your lease agreement? Typically there is a penalty or lease break fee written right in the lease agreement. The lease break fee is intended to cover your costs of rerenting it.
I would suggest building this into your lease if it isn't already there. You have to be able to account for marketing, vacancy, etc. in these situations. We typically charge a standard $2,000 early termination fee & require a 60 day notice from our tenants if they decide to break the lease.
What you can charge, beyond deducting from their deposit for tenant caused damage, depends entirely on your lease and your state landlord tenant regulations.
If there is no language in your lease or the state codes it is up to you in regards to actual costs. Generally the tenant is responsible for the rent until a replacement tenant is in place as well as all landlord expenses incurred in finding that tenant. This would include advertising, screening, credit checks etc.
If you have a lease break clause then that would be all you would be entitled to collect.