Tenants want to stay, but new tenants already paid deposit.

41 Replies

In Portland, we must give 90 days notice to change rent/terms or renew lease. Tenants' lease ends May 31. 

March 1, I offered to renew lease for June 1, no rent increase. March 30, they emailed that they didn't want to renew the lease. 

I marketed the unit and screened/accepted new tenants, accepted holding deposit in secured funds. Agreement signing scheduled for next week, June 1 move-in.

Today April 11, current tenants changed their mind and say they want to stay. 

I told them I've already got a new tenant lined up and they can't stay. Their lease says they must inform me 60 days in advance if they want to move out or renew, and they already said they wouldn't renew.

The question is, do they have any legal grounds to stay? In Portland you must renew a lease otherwise pay tenants a $4,500 relo fee.  I offered to renew, but they declined. I want to make sure I can keep my agreement with my new tenants that they can move in June 1. 

(I think once they started looking, they realized they had a screaming deal at $1836 for a 3 bedroom in 97217, and hadn't known how good they had it. My new tenants will pay $1995, and even that is a good deal. It rented with a week of listing, sight unseen.)

Can you increase the current tenants rent if you agree to let them stay? It’s an opportunity to make more money if staying is important to them. If they don’t agree to rent change then at least you have back up.

Also how were the current tenants? Sometimes it’s less headache to keep good tenants since you know what you get with them.

I just don’t know what you would do with the new tenants. Just give the deposit back and sign a decision..?

The problem is you now have a lease with the new tenants and you may have to pay THEM to relocate since they were banking on moving into your unit, and probably missed other deals based on their signed lease. This is why we don't sign new leases until a unit is vacant.

Originally posted by @Dani Z. :

 In Portland you must renew a lease otherwise pay tenants a $4,500 relo fee. 

I'm still in disbelief over this.

Originally posted by @Eric James :
Originally posted by @Dani Z.:

 In Portland you must renew a lease otherwise pay tenants a $4,500 relo fee. 

I'm still in disbelief over this.

 I'm pretty lefty liberal, but Portland City Council really outdid itself with that. They're now angling for rent control. 

I rented for 40 years, saved up to buy a duplex, and a couple years later, all the rules were flipped on their heads and the rug pulled out from under me.  Now I'm an evil landlord who should work for free because housing is a human right. 

Anyway, for people who wait until a unit is vacant to sign a lease, what do you do? Just let it sit vacant until you find a tenant? That could be a month or more of vacancy, especially given that the best tenants start looking well in advance of their move date. 

Julie Nearing the new tenants are phenomenal. Current tenants lied about smoking on their app and now the whole duplex always smells like weed. I've given them written warnings (probably why they didn't renew) but it's not worth my time and sanity to evict over this. I was kind of glad when they didn't renew. 

I’m neither an attorney, nor am I familiar with the Portland landlord codes.  However,  if the existing tenants provided you with written evidence that they did not want to renew their lease, why would you be obligated to pay the $4,500 relo fee?  Just thinking out loud.  That’s all.

What a conundrum Dani! 

They gave you notice by telling you they didn't want to renew so I would think you are under no obligation to continue leasing to them and under no obligation to pay the relocation fee. You offered to continue leasing to them at the same rate and it was their choice to put in their notice. It wasn't due to any increase or no-cause eviction on your part. As I read it, you're safe to carry on with the new tenants. All that being said, I'm not a lawyer! 

Will you let us know what happens/what you decide? 

I'm very interested to see how this plays out. Please keep us updated. and 4,500 relo fee is insane and there has got to be grounds to sue the city over that, but I'm no lawyer. 

Please seek the advise of a local attorney who specializes in landlord/tenant law and not those of us in other areas that are stunned by a $4500 relocation fee!!!  The few hundred for legal advice could save you thousands. Call the local Tenants Council as well....they seem to be very powerful 

Since they voluntarily chose to not renew when offered  they forfeit any relocation fee and you must accept though new tenant according to their signed lease. Your existing tenant must leave.

In tenants email, did they state that they intended to move out?  That is important, because, as I understand relo ordinance, they can simply decline to renew and default to mnth to mnth lease into perpetuity.  Compelling them to renew or move considered no-cause eviction, thus relo ordinance triggered.  You may want a lawyer to help you understand your options.  I doubt city council even understood implications of what they were passing. 

Originally posted by @Adam Cornell :

In tenants email, did they state that they intended to move out?  That is important, because, as I understand relo ordinance, they can simply decline to renew and default to mnth to mnth lease into perpetuity.  Compelling them to renew or move considered no-cause eviction, thus relo ordinance triggered.  You may want a lawyer to help you understand your options.  I doubt city council even understood implications of what they were passing. 

 I gave them 2 options for lease renewal:  1, they could renew their lease for a year at the same rent, or 2, they could go month to month for an increase in rent.  

Here is the email one of the three tenants sent in March:

Hey Dani,

We're choosing to discontinue our lease at the end of May. Is there paperwork we need to fill out?

Let me know. Thanks! 

And here was my reply, cc'd to the other 2 tenants as well: 

I'm sorry to hear that.

So your last day will be May 31st? I've cc'ed Luna and Olivia. Your email is enough, no paperwork needed.

If you want to do a walk through with me before you leave to help insure you get your full security deposit back, please let me know in advance so we can schedule it.

Dani 

I did not receive a reply to this though I know they all opened it (because of my email tracking software).  

A month later, that's when they asked to stay:  

Hi Dani,
How are you? I wanted to ask you a few questions about our lease. Did you find new tenants yet? If not, I was inquiring about if you would consider letting us extend our lease on a month-to-month basis. I realize we already discussed our interest in discontinuing our lease, but we decided that it would be in our best interest financially if we stayed for the time being. If we could work something out that would allow this we would very much appreciate it. Let me know when you get a chance.

". . . we already discussed our interest in discontinuing our lease . . .  "  No, you told me you were leaving at the end of May.  

Originally posted by @Dani Z. :
Originally posted by @Eric James:
Originally posted by @Dani Z.:

 In Portland you must renew a lease otherwise pay tenants a $4,500 relo fee. 

I rented for 40 years, saved up to buy a duplex, and a couple years later, all the rules were flipped on their heads and the rug pulled out from under me.  Now I'm an evil landlord who should work for free because housing is a human right. 

.

Are you in the other half of the duplex?  This seems to suggest that the move out fee may not apply: 

 https://www.portlandoregon.gov/phb/74544

I see after re-reading that the potential tenants haven't signed a lease yet. You could technically return their deposit and let them look elsewhere. But they'd likely have negative feelings toward you as a landlord if you did. Your current tenants said they were moving, so let them move. The issue is if they decide NOT to move and you've got new tenants standing at your door.

Having a property vacant for just a month is a dream come true for renters. You need time to clean, paint, let the place air out, inspect, etc. anyway. It is expected there there is at LEAST a month between tenants. If you are trying to move someone in on the tails of someone moving out...that's kinda nasty.

@Peter, thanks for that.  I'm familiar with the exceptions to relo, but this is not the case here.  My concern isn't so much with relo, as much as the tenants claiming they have a right to stay, and staying.  

Originally posted by @Ray Harrell :

Having a property vacant for just a month is a dream come true for renters. You need time to clean, paint, let the place air out, inspect, etc. anyway. It is expected there there is at LEAST a month between tenants. If you are trying to move someone in on the tails of someone moving out...that's kinda nasty.

 Thanks for your opinion, Mr. Harrell.  The current tenants have only been there 6 months.  If you want to run your business with a 17% vacancy rate, you're welcome to do that.  :)

@Dani Z. , how were we supposed to know they were only there for 6 months? You did a 6 month lease? I think most experiences landlords/managers will agree that having a one month vacancy between rentals is pretty typical.

@Ray Harrell , If 1 month is typical, you need to move faster on cleanup. While I wouldn't shoot for next day, I'd keep it as quick as possible. Maybe a week if it required a lot of work, if not just a few days to touch up paint, new occupancy permit, make w/e small repairs necessary, then move it. We're doing a pretty large rehab on a unit now and with the large rehab it'll only be offline for 1 month (due to contractor hold ups). 

@Donald S. , if a tenant moves out on the last day of the month, and you clean and paint in 3 days, the next tenant will still likely want to move in on the first. Do you do mid-month leases? If you do, then that's a different story. Most people move in and out at the beginning/end of the month.

When I was younger I was in a terrible apartment and I did a mid-month lease, but I paid up the full month at the previous place, and the full month at the new place. Most people aren't willing to do that.

@Ray Harrell I absolutely don't think having a one month vacancy is typical. In fact, I do the same thing where if I know a tenant's lease is up and they don't want to extend the lease, I'm going to be searching for new tenants while the current one's are still in. A month of vacancy no matter how long the previous renters were in is a lot of costs to chew.

Seems pretty straight forward. Their mail said "Did you find new tenants yet? If not, I was inquiring about..." The answer is yes, I did, end of story.  They sent you two emails detailing that they wanted out of the lease, and are interested in extending on the condition that you haven't found a replacement. 

Then you run into problems like our friend @Dani Z. I'd like to know how you manage to find tenants willing to move in mid-month. 

Originally posted by @Ray Harrell :

@Donald S. , if a tenant moves out on the last day of the month, and you clean and paint in 3 days, the next tenant will still likely want to move in on the first. Do you do mid-month leases? If you do, then that's a different story. Most people move in and out at the beginning/end of the month.

Huh?  What most people do is let the tenant move in when the unit is ready.  Rent is due on the first of the month for the rest of the lease and the first month is proated (number of days/30).  So if it's 1000/month, and they move in on the 15th, they owe you $500 for the partial month and $1000 on the first of the month for the next 12 months. 

They did not leave any ambiguity in this statement: 

Hey Dani,

We're choosing to discontinue our lease at the end of May. Is there paperwork we need to fill out?

They said THEY are choosing to discontinue the lease. I would simply respond that per their email dated X  stating they did not wish to continue their lease, you relisted and rerented the unit and them staying is not an option, you expect them out  by May 31, please call/text when the unit is  completely empty and cleaned, so you can perform your final walkthrough so you can calculate the amount of security deposit they will be refunded.

@Peter Sanchez , I understand the moving IN part, and I understand pro-ration. But usually people have already paid for the current month and want to finish out that month in their current apartment. I would be skeptical of someone wanting to move in prior to the first. Did they skip the last month's rent at their current place? Are they fighting with a spouse/partner/roommate and need a place to live ASAP? Red flags for me.

@Mindy Jensen , their statement is pretty clear that they did not want to renew the lease. BUT, what if they don't leave, and the new tenant is waiting at the door with the moving truck? People sign a legal document saying they will pay rent every month, in full, and on time, but sometimes that doesn't happen.

Originally posted by @Ray Harrell :

@Peter Sanchez, I understand the moving IN part, and I understand pro-ration. But usually people have already paid for the current month and want to finish out that month in their current apartment. I would be skeptical of someone wanting to move in prior to the first. Did they skip the last month's rent at their current place? Are they fighting with a spouse/partner/roommate and need a place to live ASAP? Red flags for me.

Well, if you have to be out by the 31st to do the walk through, and you have to clean the place after your stuff is out (on the 30th), what are the movers supposed to do with your stuff for 2 days?  If you stay past the 31st, a new month starts and you have to pay your old landlord for a full month so that you can move out on the 1st and into the new place on the same day? You're either going to pro-rate the old landlord a few days to move out after the 31st (if they allow it), or pro-rate the new landlord to move in before the first (if they allow it). Either way, something's gotta give, that's how time works  :) 

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