Our tenants moved into our downstairs unit not even a month ago and just asked if they can bring in two cats. The lease clearly states no pets and we are pretty firm on this rule so we let them know that is not an option. I got a call today saying they want to move out and break the lease. What should my next steps be? Should I let them go and just keep their deposit? Is that an option? I was going to ask them to send me their termination notice and date they are leaving in writing or email and then was going to respond with "approved and will keep your security deposit." Attaching the section of our least that covers termination notices. Would appreciate any advice at all! Thank you.
@Sarah Damico Check your local law. Generally speaking, they need to give written notice and 30 days. They signed a 1 year lease, so they are on the hook for 1 year. Having said that, let them out of the lease and start marketing it right away. Tell them they need to pay for advertizing, make it available for showings (with proper notice) and they are responsible for the rent until you find a new tenant. In exchange you will do your best to get it rented quickly and minimize disruptions with showings. The faster you find new tenants, the happier everyone will be.
For your new lease, you may want to add an early termination clause if CO laws allow it.
Rental Property Investor · Member since 2018 · 207 posts · 225 votes
7y
The paragraph you posted is what happens AFTER the initial lease term and has nothing to do with the current lease (I am assuming 12 months.)
Barring some early termination clause in your lease, the tenant is liable for the full 12 month lease or until such time as the unit is rented (at least in my state.)
You'll want to check with someone with Colorado-specific knowledge, but don't communicate with the tenant or give permission to vacate at all until you are clear on your rights as a landlord as well as the fiscal responsibilities of the tenant. The lease looks professionally drafted...perhaps you can reach out to whoever provided the lease, or you can check the CO landlord/tenant act.
I believe the tenant laws in CO are pretty land lord friendly as well. From everything I’ve researched it seems they are responsible for the length of the lease except for about 3 legal reasons none of which they have. We also do not have a clause in our lease for early termination. I have not committed to anything and don’t intend on doing so until I understand the full legalities around the situation. I’m not opposed to paying the money to speak to a lawyer, Im sure in hindsight there will be many learnings from this! It’s our first tenant- we just bought this property a month ago.
@Sarah Damico Check your local law. Generally speaking, they need to give written notice and 30 days. They signed a 1 year lease, so they are on the hook for 1 year. Having said that, let them out of the lease and start marketing it right away. Tell them they need to pay for advertizing, make it available for showings (with proper notice) and they are responsible for the rent until you find a new tenant. In exchange you will do your best to get it rented quickly and minimize disruptions with showings. The faster you find new tenants, the happier everyone will be.
For your new lease, you may want to add an early termination clause if CO laws allow it.
Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes
7y
We charge an Early Lease Termination Fee = 6 weeks of rent. They still must give 30 days notice and pay rent during that month while we advertise and show the unit. They cannot apply their deposit to the Fee, but neither do they forfeit their deposit.
I am almost always able to find a new tenant within 6 weeks of move out. The Fee compensates me for extra time and hassle finding a new tenant. For the tenant, it eliminates the risk of them having to pay rent, advertising expenses, & utilities for months while I look for a replacement, so it's really a WIN WIN.
No land lord should ever "just keep the deposit." You must document the loss you sustain and send the appropriate accounting statement per state laws. It may end up that you are owed an amount that will use up the full deposit and more, but please, please, please... do it right.
Thanks, Theresa! I have no problem letting them out of their lease, I'd rather have lease abiding folks living in our property at the expense of a little vacancy. We live in the Denver area, so finding new tenants is not an issue. We had more qualified tenants apply for our unit, however, I had a soft spot for this couple. I do not want to hurry and get new tenants, I'd rather take the time to find a better fit as we live in the unit above and have to share a driveway with the tenants. I will definitely work with an attorney to get an early termination clause added. Lesson learned! Thanks for your input.
Erik- Thanks for your message. The deposit would be less than 6 weeks rent hence the reason I thought it may be a better alternative to both parties instead of having them be on the hook until we rerent the unit. I would, of course, negotiate this with them and get it drafted as an amendment and signed. Sounds like I need to add a more defined clause in my lease agreements.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y
Basic contract law: you can't change the contract without both parties agreeing.
This is a great example of a problem that every Landlord will experience, probably more than once. Unfortunately, most Landlords don't develop a plan and then get caught by surprise.
When a tenant is under a lease, they are obligated to the full term. Some will want to break the lease for petty reasons, like not being able to add a pet or because they want to move in with this super-cool guy they met at the bar Friday night. Others will have real-world problems beyond their control like a death or loss of job. Landlords should be prepared to handle these situations by developing a written plan well in advance.
It's too late for you this time but you can still salvage the situation for yourself and make it palatable to the tenant. My recommendation is to offer them three choices:
1. Fulfill the terms of the contract they agreed to. This is what responsible adults do.
2. Move out but stay responsible for the terms of the lease until a replacement tenant takes over. Your tenants can reduce their risk of loss by keeping the place tidy and helping with showings even while they still live in the unit. There's a pretty good chance you will find a new tenant quickly. Once the new tenant takes over, your old tenant is released (in writing) from any liability and their deposit is refunded (minus legal deductions).
3. Tenant gives 30 days notice and pays a termination fee equal to one month of rent. After they move out, you start looking for a new tenant. If you find one in 10 days, the termination fee will be extra money in your pocket. If you don't find a tenant until 60 days after your tenant leaves, you're out a month of rent. The benefit of this option is it providers your current renter with a definitive dollar loss; they know exactly what it will cost them (one month of rent after move-out) and nothing more.
There's more options available but this should be enough for you.
Talk to your tenants, come to an agreement, and put it in writing. If they are going to pay a termination fee, make sure they pay it when they give 30 days notice, not after they move out. And do not let them use the security deposit as the termination fee or last month's rent! The deposit is your only leverage until the tenant is out and you have full control of the property.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
7y
I'd try to negotiate an early release addendum where they pay a lease termination fee of $X (mine is equal to 2 months' rent as cost of releasing their contractual obligation) in addition to rents due until they leave. If you do not have an early termination clause in your current lease, then let them know what your landlord/tenant laws allow, likely that they will be responsible for rents due until unit is re-rented or until their lease expires, but that you'd rather just negotiate a termination fee so everyone can just move on. Security deposits are usually strictly regulated, so know your landlord/tenant laws before discussing the deposit as that can usually come back to bite you later unless you can prove they owe that in damages or past rent.
Also, be wary of the emotional support animal thing, as they may try that route in order to get the pets in without your consent, so read up on it here in the forums and maybe have a required form ready so they can't just use the cheap online letter that almost anyone can get these days.
@Nathan Gesner Your advice is amazingly helpful and actionable. We absolutely should have thought all scenarios through beforehand, not making excuses, but the whole process has been a whirlwind. Now, we are having to learn from our mistakes in realtime. Any books or classes you recommend to become well versed in basic contract law?
As of now, they have only expressed verbally about wanting to break their least. I asked them to individually submit their request for early termination through email and that I would follow-up with next steps and options. I will propose the options you have laid out. Thanks for your help.
Thanks, @Lynn McGeein! Such great advice. I once had to leave my lease a month early because our landlord allowed an aggressive dog to move into the unit we shared a yard with. He kept our deposit for breaking the lease a month early so I guess I naively thought that would be a good option. Lesson learned! As for the emotional animal support thing, I read up a little on here and looks like I should request an actual doctors note vs what you can get online. Curious- my husband is allergic to cats and we live in the upstairs unit. I wonder if there are any medical loopholes on our end about this? I can look into this. Thanks so much for sharing your experience.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y
@Sarah Damico any chance you're related to a Joe Damico, prior Air Force?
My recommendation is to read a couple books on Property Management. Brandon Turner has a highly recommended one in the bookstore, though I haven't read it personally. I highly recommend "Every Landlord's Legal Guide" by NOLO because it's written by attorneys with tons of practical advice about marketing, screening, leases, breaking leases, security deposits, and more. The best part is they provide a summary of state-specific laws and links to where you can find the state laws to read yourself. They also include a couple dozen forms for leases, pet policies, applications, etc.
Once you have the basic foundation of knowledge, start refining it. This takes effort, but not to difficult if you systematically approach it. Make a list of the most common problems. After the list is complete, start building responses (policies and procedures) for how you would approach them.
Example problems:
Applicant denied
Applicant approved, fails to pay deposit
Applicant approved, fails to move in or pay rent on scheduled date
Tenant moves in, complains about condition of rental
Tenant adds unauthorized pet or person
Tenant pays rent or other outstanding charge late
Tenant doesn't pay rent or other outstanding charge
Noise complaint or other lease violation
Multiple noise complaints or other lease violations
Tenant abandons rental
Tenant moves out but leaves property behind
Tenant wants to terminate early for personal reasons
Tenant wants to terminate for loss of job, death, or other legitimate cause
You want Tenant out because they're a pain in your neck
Tenant refuses to allow you access to inspect or conduct maintenance
You can read BP and get a list of the most common issues. Start with the most common - or most likely to occur with you first - and formulate a response. Create form letters that are short, professional, and unemotional. This enables you to address the problem without getting emotionally involved. If you create a plan for one problem a week, you'll have over 50 in a year.
Thanks, @Lynn McGeein! Such great advice. I once had to leave my lease a month early because our landlord allowed an aggressive dog to move into the unit we shared a yard with. He kept our deposit for breaking the lease a month early so I guess I naively thought that would be a good option. Lesson learned! As for the emotional animal support thing, I read up a little on here and looks like I should request an actual doctors note vs what you can get online. Curious- my husband is allergic to cats and we live in the upstairs unit. I wonder if there are any medical loopholes on our end about this? I can look into this. Thanks so much for sharing your experience.
Not a lawyer nor is this legal advice. Check the actual verbiage in your state/federal laws that govern emotional support animals.
However, a major exception to having to accept an ESA animal(s) is if the property is owner-occupied and 4 units or less. Sounds like you all fall in that category.
The key to doing this correctly in Denver/Colorado is to mitigate the tenants damages. So even if your lease says you can charge the tenants for the remainder of the term as well as a lease break fee( which the lease should say on both) you still have to do everything in your power to find a tenant right away. I’ll happily discuss how we handle it and how our lease reads for anyone who wants it.
@Nathan Gesner this is great advice! I love these types of projects so I will definitely start doing this. I am not familiar with any Joe D'Amicos but I married into the D'Amico family and it's not super common so who knows!
@Jennifer T. Thanks for the insight I will look more into this for future reference.
@Thomas Cummings I guess the part I get stuck in on finding a tenant right away is I don't just want to find the first person available to rent to. We live in the upstairs unit so I want to be able to live within close proximity of the person living there. I'd love to discuss this with you and see what your lease includes. I'd greatly appreciate that. Did you use a local attorney? thanks!
Thorold, Ontario · Member since 2016 · 62 posts · 58 votes
7y
No way I would let this go. Get them to either assign their lease or sublet to someone else with your approval or tell them they are on the hook for the rest of the year rent. They don't want to pay? Take them to court.
If you don't want to deal with a court situation get them to buy themselves out for however long it may take you to find new tenants, your gas, time etc. Call it 3 months or so.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
7y
@Sarah Damico every landlord will face the situation eventually. My best advice for this and in life is "cooperate with the inevitable". That advice comes from Dale Carnegie. The underlying theory is that when something is going to happen, work with it not against it.
They are leaving. Work out a financial plan that works for you and them. I would negotiate 1-2 months rent plus a rerental fee. The rerental fee compensates you for your time finding a new tenant. Usually the total is 2-3 months rent. Option 2 is they pay until you find a new tenant and pay a rerental fee.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
7y
@Sarah Damico As others have mentioned definitely add an early lease termination fee to your lease moving forward. Makes dealing with these types of situations a little less messy because everything is spelled out if they want to terminate early.
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
7y
@Sarah Damico so some good advise above. I will add one point that I don't think was addressed adequately. You cannot "just keep the security deposit" as a lease break fee. The security deposit belongs to the tenant and is held in trust by the landlord for the performance of the lease. I would be weary of of even putting that in writing. Since if you end up in court, the judges don't tend like seeing the tenant's security deposit evaporate into the landlord's pocket.
Now it's clear you and the tenant don't approach life in the same manner. You wouldn't sign a lease for no pets and then bring in two cats. So why would you expect the tenants to leave the property clean and in good condition when they leave? Otherwise, why get a security deposit in the first place? The security deposit is for securing the condition of the property when the tenant has moved out of the property. If you accept that for the lease break funds, what incentive does the tenant have for doing anything but moving out the items they want in their new place? Without the security deposit, you end up with a filthy wrecked unit.
I really like the approach of offering options. 1) pay the fee and leave 2) sublease and be 100% responsible for finding the new approved tenant and their performance for the remainder of the lease. Most take option 1 or stay.
Note: Assume this in the future. No one will ever give up their pets for a place to live. They will lie and bring them anyway. If they don't, they will miss them and move out in a year. Neither is desirable.
BTW by not allowing pets you are eliminating approximately 60% of the renter pool between those that have pets and those that want to get them.
Curious- my husband is allergic to cats and we live in the upstairs unit. I wonder if there are any medical loopholes on our end about this? I can look into this.
I believe if you live in the house, the rules may be different regarding allowing animals. This would be something to check with your attorney or call your local tenancy board to ask.
Thanks, @Lynn McGeein! Such great advice. I once had to leave my lease a month early because our landlord allowed an aggressive dog to move into the unit we shared a yard with. He kept our deposit for breaking the lease a month early so I guess I naively thought that would be a good option. Lesson learned! As for the emotional animal support thing, I read up a little on here and looks like I should request an actual doctors note vs what you can get online. Curious- my husband is allergic to cats and we live in the upstairs unit. I wonder if there are any medical loopholes on our end about this? I can look into this. Thanks so much for sharing your experience.
Not a lawyer nor is this legal advice. Check the actual verbiage in your state/federal laws that govern emotional support animals.
However, a major exception to having to accept an ESA animal(s) is if the property is owner-occupied and 4 units or less. Sounds like you all fall in that category.
One of the ESA sites agrees with what you wrote. there are also a few other things that they say (full article here-some is how to get an ESA into a rental)
AQ #7 – When can a landlord legally reject an ESA?
There are some conditions when a landlord can reject your ESA. Emotional support animal protection is meant to protect a person with an emotional or mental disability, the law is not made to punish the landlord. This is why there are particular situations where a landlord can reject an ESA.
First – if the animal is too large for the accommodation size. For example, a horse or a llama may be rejected from a small studio apartment.
Second – if the building has 4 units or less and the landlord lives in one of the buildings.
Third – it is a single-family house that was rented without a realtor and the owner owns less than 3 single family homes.
Fourth – if the animal in the unit brings an undue financial hardship to the landlord.
Fifth – if the animal causes damages or harm to others in the building.
This was taken from their website and might be of interest to others. The site as I said is very ESA friendly, so I can't see why they'd put this up if it wasn't true.
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
7y
@Theresa Harris so all of those examples or cases are great but who gets to decide what? Also the source of each should reference a statute, law or ordinance.
1) for me any ESA is too large for my units. How does that sit?
2) where does that come from? Perhaps it's true in a jurisdiction somewhere. What if my local ordinance says it's only if the landlord lives in the same unit too? Sounds similar to an exception for illegal discrimination related to religion. Not sure how that translates to an ESA
3) Never heard of that. Perhaps a variant of item 2. Realtors are a professional organization which has professional standards but does not create or enforce any housing laws. Not sure how having them involved makes for a litmus test for illegal discrimination of an ESA.
4) I say not getting my $350 animal registration fee and $35 per month in animal rent is undue hardship. I'm sure the ESA owner thinks a bit different.
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
7y
@Theresa Harris what I meant was the ESAdoctor did not provide citations for their information. I was cautioning against believing them just because they are ESA friendly/slanted. Their information could simply be made up because it sounded good to them at the time.
@Theresa Harris what I meant was the ESAdoctor did not provide citations for their information. I was cautioning against believing them just because they are ESA friendly/slanted. Their information could simply be made up because it sounded good to them at the time.
You are right. I figured since it was a website that catered to getting ESA into homes, it would be proESA and not landlord friendly.
We are in Colorado and if the cats are not ESA, we require 30 days notice, then we start showing the unit. If it takes more than 30 days, the tenant has to keep paying until we find a tenant. The damage deposit can only be withheld for actual damage.
The 1 st tenant cannot sublease! The new tenant signs a new one year lease, and gives you a new deposit. Yes, this is extra work for you, but you loose no money. If the first tenant has ESA pets, it is their responsibility to tell you. Never ask if the pets are ESA! Good luck.
I just wanted to circle back on this thread to give an update and thank you all for your advice and input. We gave our tenants the option of paying an early termination fee to relieve them from their lease obligations and they decided to take that route vs stay responsible for the lease. Also, thanks to @Thomas Cummings on this thread for hopping on the phone to talk me through all of this and letting me see what he uses in his leases. I have updated my lease to include the early termination clause. I listed the apartment last weekend and have spent the week showing it and running applications. Our new tenant signs and moves in this Tuesday, October 1st so it definitely ended up working out. I've also started outlining responses to different scenarios as suggested by @Nathan Gesner super helpful advice!
