Tenant Wants to Move Out Before Lease

26 Replies

I am self-managing my single-family home rental in Fresno, CA. My current tenant just notified me that they would like to move out by the end of next month. However, their 1-year lease is effective for 6 more months after their desired move-out date. They have been fantastic tenants so far. They are set up on automatic rent payments, and they have never been late. They send maintenance requests as needed, etc. 

My lease allows me to have them pay any costs associated with their breach of lease, which includes the rent they would have paid if they stayed the whole term.

How have you all handled situations like this? Any piece of advice helps. 

@Justin Yurong Part ways as cleanly as possible, require they leave the place in move-in condition, wish them good luck, and find a great new tenant.

I know folks first reaction is to fight this situation, but think about the long-term...you can send them a bill for the remaining balance, which is fine...and maybe they pay, but very unlikely. Then the alternative is court action...attorney fees and court costs...dragging on...maybe small claims court...it's all pretty messy.

The scenario sucks for sure, but weigh alternatives.

As an extension of this, I've requested that tenants be responsible for rent for the month after they move out to cover carrying costs...rarely works though.

At least you get to keep the security deposit ;) 

I'd charge them your actual damages for vacant days. Have them keep it clean and neat so you can show it while they are still there (hopefully it shows well still and doesn't need carpet/paint/etc) In exchange for them letting you show the property with them still there, you could find a new tenant with a compatible move in date, and the current tenants would only need to compensate you for a couple days (assuming carpet shampoo or other cleaning). I'd try to make this a win win. You'll minimize vacancy, chances of legal cost, and resentful/spiteful tenants.

Having spoken from previous experience, you're better off having them leave the place as clean as possible... theyve given a good deal of notice.  Your ultimate goal is to get it rerented as soon as possible and if the place is clean, that should be easy to do.  Be sure to do a final walkthrough with them and schedule it.  This process will save TONS of headaches and their reasoning may be completely legitimate if theyve been great renters.

This actually happens to us relatively often, as we have a SFR close to Fort Carson and prefer to rent to military families. As such, orders come up and by law, we have to let them out of the lease.

That said, on a few occasions we've had renters who have asked to get out of a lease early for various reasons. One had a mom fall ill out of state and wanted to move back right away to be close. Another couple found a good deal on a house and wanted to break lease to close quickly.

I agree with Brandon Sturgill that the best way to handle it is to work with the tenant as much as possible. The fact that they gave you more than a month notice works in your favor, as you should be able to list it and find another renter in that timeframe. 

When we've done it, we just reinforce that we're happy to work with our tenants and that we will work quickly to get a new tenant placed, hopefully without any significant vacancy, but that they may be responsible to cover a pro-rated rent if a new tenant can't move in almost immediately after. All of our tenants have been happy that we took the time to understand their situation and went out of their way to accommodate for showing potential tenants and keeping the place clean. And we've never had to worry about collecting pro-rated rent because we've always been able to place new tenants within the month.

My feeling is you're always better off parting ways on good terms, for no other reason than to protect your long-term asset. Plus, otherwise good former tenants are also a great source of referrals.

Hope it works out well for you!

Cheers!

Kyle

What does the lease say?  If this one doesn't address it, the next one needs to have language to cover this scenario.

If it isn't in there, they are obligated to pay rent for the duration, but you are obligated to mitigate the damages by marketing and attempting to release the apartment.  Once you have someone new paying rent, they are off the hook.  They can assist by looking for new tenants themselves to either take over the lease, sublet from them, or lease directly from you.

We charge a month's rent to break the lease, and they must give use 30 days written notice.  This gives me 60 days that the rent is being paid to find a new tenant, which is usually enough time, and a bonus if they move in before that 60 days is up.

They have a legal binding contract that determines how this is handled. In most cases a landlord will inform the tenant that they are responsible for rent up to the date that a replacement tenant begins to pay plus any landlord costs associated with finding a new tenant, legal, advertising, PM fees etc.

The landlord should never be out money when a tenant chooses to break their lease. It is the landlords responsibility to find a replacement tenant as quickyy as possible.

I’d tell them they are on the hook for the remainder of the lease and the payments but I’d be nice and let them off the hook and just keep the deposit if the place was clean and not damaged when they leave . In California the normal rules and practices don’t apply though so look over your lease and your laws

@Justin Yurong

We have a 60 day out clause which essentially says we require a 2 month rent fee to break the lease.  It might seem high, but if you want out of your contract that is the fee. 

@Justin Yurong

What does your lease state regarding termination of lease.

Some things I would take into consideration is how long did they stay with you. Did they originally sign a 2 year lease and want to move out after 18 months? Or was it a 1 year lease and only stayed 6 months? Big difference if you factor turnover cost. Did you pay a leasing agent to place them in your unit?

Have you considered letting them sublet for the duration of the lease so long as the new tenant meets your credit standards or have the original tenant guarantee any lease that the new tenant doesn't pay?

You can't really stop them from moving if that's what they're going to do, so just keep things cordial and clearly communicate your expectations and remind them of their obligations.  Find out exactly what day they'll be moving, let them know you expect them to have all of their stuff out of the house, the house clean and in broom-swept condition (or whatever your standards are), and when you'll be doing the final walk-thru with them and collecting the keys.  Remind them that they're on the hook for rent until you find a new tenant and start marketing the property to find a new tenant because in California you're required to mitigate damages and you have to make a good faith effort to find a new tenant and can only charge the existing tenant rent until you find a new one.

(Don't forget to send them an itemized statement for any security deposit deductions within 21 days or you lose the right to make any security deposit deductions. You can read more about that here: California Landlord Tenant Handbook.)

It happens.  Just part of being a landlord.  Good luck.

@Justin Yurong you will learn is just because your lease says they are responsible for rent the next 6 months, doesn't mean that clause is enforceable. First problem is you can't bill someone for rents in months that have not passed. You will need to ask them to pay rent every month. If they don't pay rent, you will need to take them to court. Second issue is when you walk into court demanding rent, the tenant will say they don't live there. The judge will want to know what efforts you have made to re-rent the property. You can't just let the property sit vacant and bill them every month.

You are best to negotiate a lease break amount that they pay and in return you sign a lease break agreement. Generally I would do 1-2 months rent and releasing fee of 1 month.

Do your best to find a new tenant and let them know that until you do, they are responsible for the lease.  Remind them there are things they can do to help you get a new tenant including flexibility in showings (while giving them notice) and keeping the place tidy.  If you can get it rented for May 1 (they are leaving April 30), then they are off the hook for the rest of their lease.

@Justin Yurong

I would first ask them if they know any one that would like to take over their lease, provided that the new tenant pass your requirements to rent from you. Secondly I would advise that they are responsible for paying the lease in till you have a new lessee. Third I would get the rented space on the market soon.

Hope this helps

Others here offered some good techniques. I'd say plan to keep the deposit, or request 1-month rent to cover losses while you search for a new tenant. Do NOT make them your enemies, be accommodating. You don't want the headaches of how angry tenants behave.

Originally posted by @Justin Yurong :

I am self-managing my single-family home rental in Fresno, CA. My current tenant just notified me that they would like to move out by the end of next month. However, their 1-year lease is effective for 6 more months after their desired move-out date. They have been fantastic tenants so far. They are set up on automatic rent payments, and they have never been late. They send maintenance requests as needed, etc. 

My lease allows me to have them pay any costs associated with their breach of lease, which includes the rent they would have paid if they stayed the whole term.

How have you all handled situations like this? Any piece of advice helps. 

Easy solution

Allow them to break lease if they show house to potential renters (assuming you are on good terms and the house looks good)

It's a judgment call but holding as close to the lease as possible is usually the best grounds to start the conversation with.

@Justin Yurong

I would have them cover rent until new tenant is found. I know people that keep all their security deposit, but I have given the deposit back in some situations, minus the monies to have carpets shampooed and professionally cleaned, along with other costs associated in getting it rent ready.

I done rentals for 40 years, and I often have tenants leave before the end of the lease. But I include a clause in the first lease that there will be a one month penalty for terminating early, but it does not apply on renewal leases after the first year.

Keep in mind that often, people do not move willy nilly. I myself had promotions early on that require relocation, my wife had to leave her job and apartment when her sister was killed in a car accident, had to move home and be with her mom, who needed her. I couldn't imagine telling my boss that I have to pass on the promotion because my lease had six months to go or my wife telling her mom, sorry, I got a few months left on my lease.

And also keep in mind human nature is funny. I always keep myself on the good side with people and tenants, and often that keeps people civil. If you'll the "follow the rule" type of guy, tenants won't cut you any slack and call the authorities on all small code violations. When tenants have to move, I wish them good luck, get their cooperation to rent the place, and it saves myself lot of grief. I always charge a little under market, but when my last tenant who left me, he put an ad in Craigslist, asking for market rent, had had his three finalist interview with me, and I accepted one. I would've gone for $200/month less. He was a high paid professional, and all the finalist were all high paid professionals. He paid for a professional cleaning crew to clean the place, left 3 days before the end of the month, and the next tenant moved in 3 days later, on the first. I didn't lose a days rent. Usually, I got a 30 day turnover period where I had to do some fixing and cleanup, but some of the time, it was like this last one. This last one was unusual since he did all the cleanup and found the next tenant.

Yea...you don't get to just sit back and collect for the next six months.

Best case scenario is they are not slobs, and will work with you to show the property.

I find most tenants are not exactly "show-ready", and so therefore prefer to just get them out before I show, and certainly before anyone new signs. I sure would hate to sign with someone and when the day comes, the old tenants decided not to move!!!

Easy problem, it happens, just get it re-rented.

@Justin Yurong

We let them go, and they lose their security.

In my early 20’s I asked to be let out of a lease as I was buying my first home. No issues, I left the apartment as it was, and he was proud of me for buying a house and even gave my security back.

Thank you all so much for the replies. I really appreciate every single one of you. 

I'm working with the current tenants, and they have been very accommodating and understanding. I let them know that they could be responsible for the rent for the remainder of the lease, but that I would like to work with them so they don't have to. I told them I would like to have their replacement tenant ready to move in the day after they leave, and they're more than happy to clean up the property so that prospective tenants can view the inside. They even offered for me to keep the security deposit for the trouble. 

The property is currently being marketed, and I've already began pre-screening prospective tenants.

Again, thank you so much to everyone who commented. 

The way our leases are written, is that they need to find a new tenant upon approval from landlord.  Landlord will also look for new tenants at the same time.  Tenant is responsible to pay rent for the next 60-days where proper notice was not given (in writing) or up to where the property has a new tenant in place, plus a non-refundable fee of one month's rent for associated costs for the property going back to market before expectations, etc.     

Also check the laws that may protect tenants for paying full rent within the lease in case of default.  Will it be fair if they pay you 6 months of rent left in the lease where you filled-up your property within 2 months? 

Be careful with Special Statutory Rights such as active military orders, family violence, sex offenses, etc.  Check the laws regulating this.

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