3 tenants, 1 wants out ???

23 Replies

Three tenants moved into one of my rental properties June 1, 2019. They are all adults, and friends. All three adults signed the lease, and went over all the paperwork together. It's only July 21, and one of them wants to move out. 

One tenant emailed me personally with the following message:

Hey Nicole ! I wanted to know if there was anyway to take my name off the lease? Things are not working out and I need to leave but I don’t want to have anything bad on my recorded if they don’t stay. I would really appreciate if this is possible I’m looking to leave in August
Thank you. :)

My business-gut says to just tell her no, and that the rental agreement is a legally binding agreement. She can move out, but if anything happens with the rental payments, she'll still be held legally responsible. 

However, the other two tenants could technically just barely qualify on their own, without her. They need to make at least $4,050 per month to qualify, and together they make $4,056. And, I fear that if I make her carry out her lease, things could get ugly between her and her roommates. 

Just not sure how to handle this, or what to tell her. Am I thinking too much about this? Please advise. Thank you!


IMO: She stays on the lease and her ‘portion’ of the deposit isn’t refunded. She’s an adult, she should have thought about things before entering a binding legal agreement. The above is non-negotiable.

To your success! 

Originally posted by @Nicole Obregon :

Three tenants moved into one of my rental properties June 1, 2019. They are all adults, and friends. All three adults signed the lease, and went over all the paperwork together. It's only July 21, and one of them wants to move out. 

One tenant emailed me personally with the following message:

Hey Nicole ! I wanted to know if there was anyway to take my name off the lease? Things are not working out and I need to leave but I don’t want to have anything bad on my recorded if they don’t stay. I would really appreciate if this is possible I’m looking to leave in August
Thank you. :)

My business-gut says to just tell her no, and that the rental agreement is a legally binding agreement. She can move out, but if anything happens with the rental payments, she'll still be held legally responsible. 

However, the other two tenants could technically just barely qualify on their own, without her. They need to make at least $4,050 per month to qualify, and together they make $4,056. And, I fear that if I make her carry out her lease, things could get ugly between her and her roommates. 

Just not sure how to handle this, or what to tell her. Am I thinking too much about this? Please advise. Thank you!


Taking the tenant off of the lease with no financial benefit to you does you no good. You are in a much better position when you can hold 3 adults liable for potential damages as opposed to only 2 adults. Whenever this happens we offer the tenant the ability to remove themselves from the lease by paying the early termination fee & fore-fitting their deposit or reaming on the lease and being liable for anything that happens to the house because of the behavior of their former roommates. 

 

Originally posted by @Nicole Obregon :

Yes, James, exactly. I rented to them because of the appeal of having 3 working adults paying rent. 

What is your early termination fee? 

2x rent.

 

Adding adults under a roof, always raises the propensity for drama

You didn't choose her roommates, she did. Personally I would let them figure it out. And I would just be ready to eat some rent loss.

If you really want to do something another than stick to your guns and get involved:

1)  Let them find a new roommate but I would not let her off the lease guaranty even after the new room mate moves in. 

2)  let her buy her name off the lease for a lump sum (Don't accept a payment plan). Then pray the tenants left behind can find a new room mate.. get at least 2 or 3 full month rent

3) Offer a termination fee is a 60 day notice (given at the end of the month) and 2 months rent on top of the rent they pay for the 60 days. That gives you some time to find a new tenant with out taking a hit 

and #3 being is written on all my leases

This post has been removed.

they're all jointly and severally liable for the rent.

This is why roommates are the last kind of tenants I want in a 3-4 bed house. Recent college grads are the worst.

One of them always wants to leave, and without fail, that puts a financial strain on the remaining roommates. 

Depending on where you are, it's probably still a good time to re-rent the place. Get the current tenants out and make them pay for your losses. For new tenants, write up a new lease that is 10-11 months, ending next summer, when renter demand is highest.

Hold her to it or get a lump sum buy out. I err on the side of holding her to it. She signed the contract and your numbers were based on her being there. A lump sum does give you a buffer at the very least, but I worry about the other 2 and any financial strain it would cause on them until another qualified roommate is found.

Basically, everyone's calculations were based on her being there another 11 months.

I've had this same situation in the past. An unmarried couple, a child and their friend. One of the couple moved out and wanted to be taken off the lease. I told the person they were welcome to not stay in the house but they were still on the lease for the duration. Shortly thereafter, this person moved back in and forced the other member of the couple out. But then that person moved back in as well. All those shenanigans has caused me to rethink qualifying from the financial end and I think the only way to make it work is that in "roommate" situations, anyone (everyone) has to be able to support the rent on their own. That way if someone moves out, the whole situation isn't in jeopardy. In the OP's case, I would not release the person from their lease and that individual can either move back in or hope the remaining two people can make the rent.

Thank you all for your comments and insights. They are incredibly valuable. I've read them all and considered what to do given an update this morning from my tenants.

UPDATE: I called the 2nd roommate on the phone. She told me that things are not good. Money is tight, hours were cut back, they're back into dabbling into drugs or thinking about it, and the 3rd roommate is now in rehab. !!!  So, they're out his income. She thanked me for calling and offering an exit because they just didn't know how to tell me what was going on. 

So, I've offered them an exit offer to avoid eviction and court costs. (Although I'm willing to do that if they don't follow through on the offer).

Option 1: Pay $1,350 for August's rent. Move out completely by July 31, 2019.
Option 2: Pay $1,350 for August's rent by August 5 and $1,350 for September's rent by September 5. Move out completely by August 31, 2019.

This is beyond what I've ever experienced! My tenants so far have been so easy and simple. I've never had to evict anyone or do anything like this. My heart is beating fast, and I'm really nervous about what's going to happen. Oh dear me. !!!

@Nicole Obregon

No way I would let this happen so early. If it was the last two months of a 24 month term no big deal. This, no way.

“Hello ______,

A lease is a legally binding contract that is joint and several. I would encourage you as an adult to work through your issues with your roommates as the legal and financial effects of this could be very serious for all of you!”

Done. You’re not dr Phil and you don’t need to try to be

We have an early termination setup similar to @James Wise . Two months of rent, which usually ends up being the deposit + one other month, and they walk clean, or keep paying and maintaining everything while we try to re-rent. The few people who have wanted to terminate early always take the 2 months & walk because they've already paid the deposit so only have to come up with one more month and they get to take their name off the utilities, lawn care, etc. 

In cases of roommates, everyone is responsible for the lease. In cases where an individual can't qualify on their own (generally college students), they have to have a co-signer who can qualify on their own. Then if someone wants to leave, if the remaining 2 can pay, fine, if they want to find a new person and they can pass credit/app/background check, fine, if not the co-signer ends up responsible along with the roommates if there's a no-pay situation. 

They just gave you a big hint that this is just the beginning of issues..... losing work hours, getting back into drugs and one now in rehab......who screened these people?

Offer them ALL out of the lease with the early termination penalty and start over.....

This post has been removed.

One time (15 years ago?), I rented a place with a friend and her boyfriend. Like a month later, on New Year’s Eve, they got into a drunken shouting match that ended with him pushing her down the stairs. Thankfully he left, and also thankfully, the PM let him off the lease.

Fast forward a year and my “friend” had a new boyfriend who was a creeper. I decided to leave but this time they wouldn’t let us change the lease. I paid four months after I moved out to finish our six-month renewal we had signed. She let the guy move in without the PM knowing and I still had to help pay the rent and other bills. The two of them wrecked the place and had cats peeing all over and we had a huge claim against our security deposit (plus some), which I chose not to pay and detailed why I shouldn’t be responsible so I believe they went after her since they knew I had left already but was trying to do the right thing and still pay my half of the bills.

Moral of the story: Every situation is unique. Do what is right for that situation. You don’t know why it’s not working out for this particular roommate, and she hasn’t been there long, so as long as the other two can qualify and are amenable to removing the third roommate from the lease, I see no reason to not accommodate that. Maybe charge a lease change fee due to the paperwork and time.



Just like I don't want to work with people who don't want to work with me, I don't want to rent to people who don't want to be there.  so I'm not going to force them to stay for the remainder of the lease.  

Every lease can be broken. You just have to make sure you have close to zero loss.

In the last 8 years, I've had 3 tenants that I've granted early termination, and they have cooperated with my efforts to rent the place out again.

One of them was short on cash, and if someone can't pay, you get them out immediately, ideally without any loss of rent.

Second tenant was a roommate situation where one moved out 7 months into the lease. This is why I never rent to roomates anymore.

Third tenant was an asbestos complaint issue, for which I was cleared, but I don't want to continue dealing with such a tenant.

I like tenants who cause no trouble.

@Nicole Obregon Do not let her off the hook by taking her off the lease. The fact is you have no clue what is going on day to day in that house. Your role as a landlord is to collect rent and respond to maintenance requests (generally speaking), not to get involved with tenant squabbles.

Going forward consider instituting an early termination fee clause in your lease. It takes the emotion out of situations like this when you can just respond with "sure you guys can get out of your lease by paying the early lease termination fee outlined in section "x" of your lease documents.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here