New landlord for a few months now. I am also new to this forum so I want to say hi to everyone here. Heard great things about Bigger Pockets and love listening to the podcasts.
Looking for any landlords who can help me with an issue. Also, if you happen to live in New Jersey and are familiar with the landlord/tenant laws, that would be extremely helpful. I have good tenants who are breaching their 1 year lease contract as they are looking to move. Legally, what is it that I can do here and what are my tenants obligated to do?
First thing you need to do is get a copy of and study your stste landlord tenant regulations. It is your responsibility to know all the codes before becoming a landlord. You should be able to easily find thenm on line.
As for your rights and your tenants rights in breaking a lease they will be found in the wording of your lease. There will be reference to penalties, length of notice etc. When there is no written lease it defers to state codes.
Did you use a nj statewide lease template ?
Depending on if you made any changes to your lease, your tenant will be liable for the entire 1 year lease and would be in breach of contract if they break the lease early. They would also be jeopardizing their security deposit.
Thank you for the feedback Thomas S. I will absolutely get a copy and study my state’s landlord tenant regulations. In terms of the wording of the lease contract, I do not see any reference to to penalties regarding this situation.
Thank you Joe. I did use a NJ statewide lease template. It was through my agent. And someone mentioned the same exact thing to me today but I have to see if this regulation is applied to New Jersey.
@Anthony Galante you need to make yourself well versed (as does anyone who operates in the state of NJ) with the New Jersey Truth in Renting which you're supposed to supply your tenant with at the time they rent the apartment. We make sure they actually sign a doc acknowledging receipt of it. In there it goes into details about breaking a lease (which is one of the few things that really puts the landlord in favor here in NJ). The state in my opinion is not fond of those who break leases. Here's a link to the doc, of which you should download and again provide to your tenant.
Read pages 4-5. It's covered there.
Tenants will leave when they want to leave, lease or no lease. Not worth making it miserable for them by demanding more than would be reasonable. If they break the lease by vacating early and return possession of the unit back to you, get it re-rented as soon as you can. You must get it rent ready and market it for re-rent it in a timely manner.
Technically, you could hold the vacating tenant accountable for whatever the lease and law allows. Hopefully your lease has a lease-break clause, since breaking leases is a fairly common occurrence. Once another tenant starts paying you rent, the first tenant is off the hook. But if the outgoing tenant has been kind and cooperative, leaves the place clean and without damages, and informed you with plenty of notice about their leaving, then I would just let them go and bid them a good farewell.
Provided they gave proper notice (30 or 60 days), I'd let them go. Remind them they are responsible for the rent until you get it rented and you will do your best to get it rented as quickly as possible. This will also make them more responsive to showings to other prospective tenants as they will also want you to rent it out quickly. If possible, try to group showings to minimize the disruption to the current tenants. You have time to get the place re-rented.
This is something people should learn about before it happens.
Yes, many tenants will break the lease early. That doesn't mean you should just let it happen or throw the one-year lease out the window and only use month-to-month.
I require a one-year lease. When a tenant breaks it, they have two choices:
1. Remain responsible for rent/utilities until a new tenant is placed; or
2. Pay a stiff penalty equal to two month's rent.
The vast majority of my tenants choose Option 2. I typically have a new renter located before the current tenant leaves so I am making extra money, not suffering a loss.
Are you the same @Anthony Galante I went to high school with? If so, small world bro!
You have a duty to mitigate damages so take steps to rent the apartment if you haven’t done so already.
As for your existing tenants who are breaking the Lease, let them go. It's not worth a big battle, and legal fees. Increase the asking rent and find a new tenant.
It depends on your state laws and how your lease is written. I am currently in the same situation.
A lease-break fee equal to 2 months rent is part of my lease agreement. I have a tenant moving out today who is breaking the lease. He paid the lease-break fee.
I started advertizing a couple weeks ago and have a new tenant ready to go. New tenant paid a non-refundable hold deposit and will move in a few weeks after the old tenant moves out.
The old tenant will get a refund pro-rated from the date that the new tenant starts paying rent after a new lease is signed (I don't keep double rent during the overlap and I'm pretty sure that's illegal).
In this way, I am able to do a turnover without any lost rent or actual vacancy loss. Repairs the previous tenant is liable for will be covered by their security deposit. Old tenant is motivated by $$ to keep and return the unit in good condition so we can get a new tenant in place ASAP.
In a way, it potentially works out better than a normal turnover at the end of a lease. There is no lost income and the only extra expense is a little money for utilities along with any improvements in between tenants.
It could work out well if you get in front of it. First step is to know your lease and state laws to see what your options are.