Security deposit and lease termination.

[Lacy Tilley]

Any input would be great.

The tenant had told me she cannot go through with the lease.(circumstances are legitimate but an agreement is and agreement)

Signed on aug 15th for move in on aug 29th for a 2 year lease. With security deposit and first months rent(sept) and prorated rent up to the first month (3days). Tenant has not moved in yet. I have tried to get a tenant in there as soon as possible. I found a qualified tenant But can only get them as early as October 1st.

My lease is pretty specific that that are responsible for the full term. And security deposit is to uphold the agreement of the lease not just property damage.

[Mike Cumbie]

It sounds like you have lost use of this property for 3 days. That would be the extent of my damages. You can't rent it to both for the same time period and in many places you are required to make an effort to find another tenant (which you have, Congrats). If they have not moved in there should be no damages, the first months rent is actually being paid by the new person so all that's left is the prorated rent (3 days). 

Just my thoughts and good luck. Now if your documentation is different and your local laws are different you can go with that. 

[Lacy Tilley]

Originally posted by @Mike Cumbie:

It sounds like you have lost use of this property for 3 days. That would be the extent of my damages. You can't rent it to both for the same time period and in many places you are required to make an effort to find another tenant (which you have, Congrats). If they have not moved in there should be no damages, the first months rent is actually being paid by the new person so all that's left is the prorated rent (3 days). 

Just my thoughts and good luck. Now if your documentation is different and your local laws are different you can go with that. 

 I apologize i had the months wrong. Corrected them now ^^. Im actually out the 3 days in august and all of september. 

[Jeff Willis]

Most states have laws that cover your situation, as to use of security deposit. Here is an example of California (most are similar)

https://www.courts.ca.gov/1049.htm

[Lacy Tilley]

Originally posted by @Jeff Willis:

Most states have laws that cover your situation, as to use of security deposit. Here is an example of California (most are similar)

https://www.courts.ca.gov/1049.htm

This is ohio. Ive read the laws. I cant find anything on it.

[Lacy Tilley]

I wonder what @James Wise would do

[Andrew B.]

Given the circumstances, the maximum you can take from this person is the 3 days in August, September rent, and any fees accrued while looking for this new tenant. You handled your end by taking immediate action to mitigate your losses. Tenant should handle their end by making you whole, as though they had moved in.

[Lacy Tilley]

Originally posted by @Andrew B.:

Given the circumstances, the maximum you can take from this person is the 3 days in August, September rent, and any fees accrued while looking for this new tenant. You handled your end by taking immediate action to mitigate your losses. Tenant should handle their end by making you whole, as though they had moved in.

I feel this is fair. How would I estimate my fee's? When most damage is my time. ( I self manage)

[Andrew B.]

Originally posted by @Lacy Tilley:

Originally posted by @Andrew B.:

Given the circumstances, the maximum you can take from this person is the 3 days in August, September rent, and any fees accrued while looking for this new tenant. You handled your end by taking immediate action to mitigate your losses. Tenant should handle their end by making you whole, as though they had moved in.

I feel this is fair. How would I estimate my fee's? When most damage is my time. ( I self manage)

Don't bill for your time. Most states consider that to have no value, as it is your business. Try to bill for that, and you may end up on the wrong end of a lawsuit. Better to take the rent that you are confident you can keep, than to push it into grey territory and risk a lawsuit. That also applies to security deposits btw. I would never bill a tenant for my time, unless I knew for a fact my state upheld that policy.

[James Wise]

Originally posted by @Lacy Tilley:

I wonder what @James Wise would do

To clarify, the tenant signed the lease and paid all of the move in fees but did not yet move in. Did you deliver possession to them? IE hand them the keys when all of this happened?

[Lacy Tilley]

Originally posted by @James Wise:

Originally posted by @Lacy Tilley:

I wonder what @James Wise would do

To clarify, the tenant signed the lease and paid all of the move in fees but did not yet move in. Did you deliver possession to them? IE hand them the keys when all of this happened?

Yes we agreed they could have the keys early ( to ease the move of leases ending, as long as they had utilities in their name. that was on the 22nd. I also a greed to let them paint the closets (there request) which they had started.

[James Wise]

Originally posted by @Lacy Tilley:

Originally posted by @James Wise:

Originally posted by @Lacy Tilley:

I wonder what @James Wise would do

To clarify, the tenant signed the lease and paid all of the move in fees but did not yet move in. Did you deliver possession to them? IE hand them the keys when all of this happened?

Yes we agreed they could have the keys early ( to ease the move of leases ending, as long as they had utilities in their name. that was on the 22nd. I also a greed to let them paint the closets (there request) which they had started.

If they had possession then the lease started. I would agree to simply terminate the lease but would not refund any money paid thus far.

[Jennifer T.]

Originally posted by @Lacy Tilley:

Originally posted by @Andrew B.:

Given the circumstances, the maximum you can take from this person is the 3 days in August, September rent, and any fees accrued while looking for this new tenant. You handled your end by taking immediate action to mitigate your losses. Tenant should handle their end by making you whole, as though they had moved in.

I feel this is fair. How would I estimate my fee's? When most damage is my time. ( I self manage)

In the future, I recommend adding a "break lease" fee to your leases.  Which is on top of requiring rent to be paid until a new tenant moves in.  I don't call out that this is for my extra time and hassle.  But that's essentially why I have a "break lease" fee because, even if I don't lose one day of rent, I need to be made "whole"...and that includes compensation for my time.

With that said, I don't feel a LL can normally charge for their "time" or a fee, unless those consequences were spelled out ahead of time. 

[Lacy Tilley]

Originally posted by @Jennifer T.:

In the future, I recommend adding a "break lease" fee to your leases.  Which is on top of requiring rent to be paid until a new tenant moves in.  I don't call out that this is for my extra time and hassle.  But that's essentially why I have a "break lease" fee because, even if I don't lose one day of rent, I need to be made "whole"...and that includes compensation for my time.

With that said, I don't feel a LL can normally charge for their "time" or a fee, unless those consequences were spelled out ahead of time. 

Thanks for the input

What is a "LL"? How would you recommend structuring that fee 2 months rent? a flat amount? The properties i have are primarily 1000-1200$

[Jennifer T.]

Originally posted by @Lacy Tilley:

Originally posted by @Jennifer T.:

In the future, I recommend adding a "break lease" fee to your leases.  Which is on top of requiring rent to be paid until a new tenant moves in.  I don't call out that this is for my extra time and hassle.  But that's essentially why I have a "break lease" fee because, even if I don't lose one day of rent, I need to be made "whole"...and that includes compensation for my time.

With that said, I don't feel a LL can normally charge for their "time" or a fee, unless those consequences were spelled out ahead of time. 

Thanks for the input

What is a "LL"? How would you recommend structuring that fee 2 months rent? a flat amount? The properties i have are primarily 1000-1200$

LL-Landlord/Landlady.  The initials for a term used a lot on BP, lol.

I charge a $250 break lease fee, but I've seen others charge up to $500.  However, keep in mind, that fee is ON TOP of whatever lost rent there is.

I'll give you a real life example.  A couple years ago, I had a tenant sign a one-year lease in Feb., but then had a long-term family emergency come up and gave notice around May 23rd.  He actually moved out within the week and had left the place clean and in great condition.  He paid June's rent, plus I still had his one month's security deposit.  I told him I would fill the vacancy as quickly as I could, but would be deducting the break lease fee out of his security deposit and...if the vacancy continued into July...I'd also subtract whatever pro-rated days of rent I missed out on.  He was good with all of that.

And that was essentially what happened.  My next tenants moved in after 4th of July weekend.  I subtracted those few days of rent, plus the break lease fee, and returned the rest of his security deposit.