Your opinion on this situation?

Question

Hello BiggerPockets! :)

I have been reading this forum for a while now… almost daily! I finally have a question that I think is worthy of the board.

My Background…
I have been a landlord of 4 units now for about 5 years. 2 single family and a duplex.

The Situation…
My sister leased a single family home from a friend of the family. The lease was for 1 year. About 4 months into it she found an unbelievable deal on a house with acreage. She spoke with the landlord about getting out of the lease early. He said that is fine if he can find some one to replace her. She continued to pay the rent while she was moving out. On the 15th of Nov the landlord stated he had someone to replace her, and that she needed to be completely out by the end of the month. She moved out, took pictures and turned the key into the landlords drop box on the 20th. She did not pay Dec rent and never heard from him until a few days ago. He was upset because when she moved out she turned the electric off in the house. (she did not realize that the elec. had to be on for the gas furnace to work) The landlord stated that the new tenant fell through and could not rent the property. He said that she would be liable for the rest of the lease and because nobody turned the elec. on, any damage (if any) done due to freezing pipes.

My Position on the Situation…
I feel that she did her part for the lease and it is not her fault that the new tenant fell through. He asked her to be completely out so the new tenant could move in. She turned in the keys and was completely moved out like he asked. I feel at that point the lease was terminated and she is no longer responsible for the lease or property and any damages after.

Your opinions on the matter would be greatly appreciated!

Thanks
-Allan Landfried

Steve Babiak · Answer

This landlord is an amateur.  Almost all utilities have a provision for service to be put into the landlord's name automatically upon termination of service by the tenant.  Had he done that simple thing, the electricity would have become his responsibility, and pipes freezing would be on him.

BTW - if you happen to be reading this, and haven't had your rentals set up for automatic utility switchover upon tenant termination, I suggest you at least contact all pertinent utility companies and ask about this!

Lynn McGeein · Answer

Unfortunately, in some places, like Raleigh, where I have 3 of mine, the gas company and water/sewer allow the automatic reversion back to me, but the electric company requires that I own at least 10 units in order to set it up with them (they said 10 minimum is required by law, not their policy).  And since all 3 have gas heat, this is a big PITA.   And the gas company says it only reverts automatically if the tenant notifies them to turn off service, not if it's turned off for lack of payment, which I suppose makes sense but doesn't solve the pipe-bursting-in-winter problem if the tenant doesn't pay and you don't know about it (not that it applies in this situation as she had it turned off.)

John Mireles · Answer

I agree with Lynn. Everything needs to be documented and put into writing. If this goes to court, that letter will be exhibit A. Make sure that it's detailed, easy to follow - with bullet points highlighting important events - and unemotional. Just stick to the facts.

The fact that the landlord waiting until just a few days ago says a lot about the facts here. If your sister had just broken the lease on December 1, the landlord would have - should have - acted much much sooner. The fact that he's only acting now, more than a month later, confirms your sister's story. (Imagine a judge asking the landlord why he waited a month to go after the tenant if the tenant had in fact broken the lease. The judge just won't buy whatever answer the landlord manages to stumble through.)

And yes, your sister did have a lease, but the landlord agreed to end the lease because he had signed a new tenant. The fact that this new tenant didn't work out is not your sister's responsibility. He should have had her keep paying until he got the first month's rent and security deposit in hand. The fact that this guy is inexperienced or just dumb is not her fault. Same thing with the busted pipes.

At this point, I would respond with that detailed letter and politely tell the landlord to pound sand. The next move is his.

John

Jon K. · Answer

She  moved out Nov. 20.

The landlord told her to be out Nov. 30.

Why didn't she give the keys to the landlord and tell him she was moving out 10 days before he assumed she was moving?

I don't see the "receipt of keys as acceptance" since she dropped the keys in his mailbox. Did she actually tell him she had moved on Nov. 20, or just drop keys in some mailbox and assume he would just guess she moved out 10 days early?

Why didn't she call the landlord and tell him she moved early???

Since he told her that he found someone else and to move by Nov. 30, I wonder if she could be stuck paying rent until a replacement was found. It doesn't seem like it. I would be surprised if she was stuck paying rent since he told her he found someone and to move out... unless he said "I THINK I found someone, could you possibly be out by Nov. 30?"

I suppose a judge could hold her liable for the full rent amount. She had a lease, and she did break it early.

#1 rule: get it in writing. She 'amended' the lease verbally on the phone, making it a he said/she said. My lease doesn't allow for verbal changes to the lease. Otherwise I would have some tenant saying "but you said I could XYZ." Definitely mail or e-mail future communications.

Allan Landfried · Answer

I completely agree... I told my sister this exact thing... all my units are set up this way.

I want to thank all of you for responding!

Everything that is being posted is essentially what I thought and relayed to my sister. I just wanted to make sure that I wasn't completely in left field on this.

It will be touchy going forward, as we do not want to get in a heated battle with a friend of our Father. But, she will defiantly only mail responses from now on with the landlord.

Again thanks to BiggerPockets for having such a large community to allow so many responses in just a few hours.

I will post more updates as the situation progresses.

Bill Gulley · Answer

Steve is correct! No tenant leaves and leaves utilities left in thier name, if they have a brain. The landlord accepted the keys, receipt is acceptance, he should have checked immediately or close to it!

Further, I bet he had to get the utilities turned on again and may not have had the money to do so, toooooo bad! If he had had a landlord agreement with the utility company, none of that would have happened.

She broke the lease. She is liable until it is relet and he needs to seek new tenants in good faith, advertise it, to get that. You can request a lump sum bill along with proof of his attempts to find new tenants to the date of a new lease, run that by your attorney.

As to broken pipes, IMO, tell him you'll see him in court if he likes.

Mark H. · Answer

It really depends on the judge you get.  Obviously, the landlord thinks the tenant is responsible, and without having these details in writing, everyone involved is right, until the judge says otherwise.

In my area & in my leases, tenants are required to set up utilities before they can move in, and maintain those utilities for the duration of their tenancy.  I've seen some leases that require utilitues to be maintained for a period of time after the tenant moves out, but i sincerely doubt any judge in my area would enforce that.

The crux of the issue is did the landlord *know* exactly when she was moving?

In the absence of written documentation, it'll be whomever tells a better story.

Lynn McGeein · Answer

Because it all seems to be verbally agreed to, I would suggest having your sister write a detailed letter to the landlord listing her version of what happened, step by step, especially the part about being told to move out by the end of the month, and finish by saying that due to his request for her to move out, she feels the lease ended on the date he told her to be out, so she has no further obligation to him.  She should make copies and send it certified for proof that he received it.  If he calls her, she should ask him to please put any response in writing, especially if he denies her version of the story.  Then at least she'll have something to show a court if it gets that far.  It is too bad that he is a friend of the family, as this type of thing definitely strains relationships, and both of them would probably have done things in writing had they not had that connection but had just been landlord and tenant.

James H. · Answer

Does the lease agreement state that the tenant is responsible for broken pipes?

Carlos Flores · Answer

The lease probably says all changes have to by in writing and agreed to by all parties so legally it's he said / she said and a crap shoot in front of a judge if he were to pursue.

A little pressure from those closest to this "friend of the family" landlord might be in order if her story is bulletproof.

Your opinion on this situation?

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