Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
So I understand that a tenant has the right to break a lease with military orders, but our rental agreements are M2M with this move-in fee caveat.
For example:
Rent $1650.
Refundable deposit $825.
Non Refundable Move In Fee $825 - added to refundable deposit if tenants has stayed for 12 months and is in good standing.
This is a great way to have the flexibility of M2M and include the incentive to have people stay at least one year, or know up front the fee for getting a unique short term rental. Before moving in, the military guy knows he is going on deployment in 6 months. He doesn't care about a lease because he knows he has the military right to break a lease. But for my terms can I still keep his move-in fee, or does the military card trump my move-in fee policy?
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
6y
I'm not a lawyer, no legal advice, but, at least in our area with heavy military presence, it would be bad form to charge a service member an $850 fee because they received new orders, even if it was legal to do so.
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
6y
To paraphrase Nassim Taleb: the problem of modernity is the growing seperation of the legal and the moral.
you can tell something is immoral when you have to spend so much time working around the technicalities just to break the spirit of the rule.
Its astonishing to me that some people would sell their virtue for only $800.
this thread will definitely be making an appearance on the "military to millionaire" podcast (a huge military real estate investor show) to discuss how and why it isn't appropriate to take advantage of service members.
Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
6y
@Julie Marquez here is my simple question, and I think I already know the answer. Which option will allow you to sleep better?
My thought is that you asked, hoping somebody would validate your desire to keep the $800.
I will tell you this. $800 is not worth getting blacklisted by an entire segment of your potential tenant population.
@Alexander Felice we will definitely be discussing this on the show. I am also working on an SCRA article/video, along with a "are military towns REALLY recession resistant" thas t discusses pros and cons to military tenants!
Investor · United States · Member since 2020 · 47 posts · 40 votes
6y
I am also Active Duty and say DO NOT return the fee. It was a fee established to all renters and is an incentive for long term tenants as well as for renters to have a MTM lease option. I am pretty cut and dry when it comes to the rules (never used to be that way, but life lessons have hardened me a little). I had a great tenant who paid on time every single month without an issue. Unfortunately they left the exterior of the home in a state which I needed to hire a lot of work out. It took their entire Security Deposit to fix it as well as extra that I than billed to them (which they paid graciously apologizing for the mess). As much as I, as a person, felt bad for having to do that, as a business owner it was the right thing to do. You have to draw a line in the sand and always tell yourself, this is a BUSINESS... Always easier said than done. I do however love your lease term and deposit idea! Thank you for sharing that!
Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
6y
Simply put, you need to get in contact with the Commanding Officer of this serviceman. This information will be supplied in the paperwork the serviceman must bring to you regarding his plans. No paperwork? There is no service related issue.
I am not saying write a letter. I am saying that you need to make the phone call and ask if the CO can assist, with perhaps finding a replacement for your activated tenant.
Rental Property Investor · Los Angeles, CA · Member since 2016 · 4 posts · 2 votes
6y
@Julie Marquez As almost everyone has mentioned It may be best to consult a lawyer. But I think ultimately you charged a fee that is not part of the security deposit unless the tenant stays past the 12 month point. Therefore I think you can keep the fee but like many others stated deployment is a funny thing they can go away just as quick as one pops up. Your tenant may come back to you with it being canceled and wish to stay on your property. If your keen on keeping the fee I’d probably ask the tenant to see if they can find another member to fill the property and if they do you will return the fee as part of the security deposit. I think returning it would be a nice thing to do but I’m not really sure it would be required as any other application fee has not been returned in my experience.
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
6y
@David Pere@Alexander Felice I'm looking forward to more discussion about this and learning more about the SCRA, how it isn't appropriate to take advantage of service members. As a civilian renter, I might be frustrated to see my service member neighbor (who signs the same rental agreement that I do) get out of the move-in fee, while my other extenuating circumstance that causes me to move before the 12 months doesn't get me my move-in fee returned. I share my very clear rules up front with everyone and would hate to treat people differently based on the particulars of their move-out-before-12-months circumstance. I'm not lessening the service and sacrifice of military members (like I told Lan, I don't know what it's like to go on deployment), I'm just trying to treat ALL people equally, and maybe service members will go to one of the million other property owners that have traditional 1-year leases and no move-in fees because maybe they will find that that is what works better for their situation. But yes, the question was brought up because there is heart behind the matter of the law too.
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
6y
@Rochelle Thea Fabrizio@Drew Busbee I really appreciate your active duty response and understanding the intent of my agreement and fees - to allow people to have short term housing without breaking a lease, and if they stay over a year the issue is not applicable. But this is a people business, and I do love and appreciate all my tenants and want to do what is best and fair for all.
Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
6y
@Julie Marquez You should probably check with your state and see how they feel about a "fee" being made out of somebodies deposit. The rest of the nation just says you owe X number of days notice, and then are responsible of paying thast last month regardless of when you vacate. That isnt part of the deposit though.
Also, let me know when your civilian tenant gets ordered to go to combat 🤷♂️ and Ill understand their frustration.
Rental Property Investor · Sarasota, FL · Member since 2018 · 46 posts · 76 votes
6y
@Julie Marquez
Has your tenant actually asked for the fee back?
In my opinion this was an initial fee that is charged to all tenants and likely allowed you to reduce the month to month rent you already charged them.
When he deploys I personally would thank him for his service, give him the security deposit, and allow him to end the lease early.
If he questions the fact that he did not receive his year long longevity fee back I would likely compromise with him at that point.
I am not a lawyer but I do not think you are morally or legally obligated to reimburse him for a longevity fee if he does not meet the time criteria. If he can provide legal validation or if you appreciate his service and would like to give him a break on the fee out of kindness you can reimburse him accordingly.
As a military tenant it would have been in his best interest to clarify the fee with you before he signed the contract.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
6y
@Julie Marquez
If I had a tenant deployed to serve our country, I’d give him/her every penny of their security, given they did no damage. Break the lease or not, they are our military and I appreciate and respect that.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
6y
I agree with @Jonathan R McLaughlin that this fee is basically a liquidated damages clause designed to minimize your costs if the tenant doesn't stay 12 months, which really kind of turns the agreement into a one-year lease. It's a penalty for not staying 12 months. So, are liquidated damages clauses legal in your county in WA?
This wouldn't fly in CA, as no extra fees are allowed - any fee, no matter what you call it, is considered part of the security deposit and must fit into those rules.
I know other states are different. But, I think, if this soldier got a savvy military lawyer, that lawyer would be looking at whether or not liquidated damages clauses are allowed in WA in contracts. If not, then it seems to me that would trump any law that says you can charge fees. I just don't think what you're doing would be considered something allowed under the law there regarding fees, either, under your landlord-tenant laws.
I mean, just because you put something in a contract doesn't make it legal. For instance, what if you had a fee that said that people with brown hair had to pay an extra fee. Would your landlord law allow that? There are always limits and how the law is normally interpreted when it's not clear is - would a reasonable person think it's reasonable.
So, would a reasonable person think it was reasonable to charge a tenant $800 for breaking a month to month agreement before a year was up? Does that make sense to a reasonable person? I don't think so. This really comes across as a landlord who wants the ability to kick a tenant out under a M2M law, but also wants the benefits of a lease at the same time. It just smells bad.
And, from what I read regarding the military law, it says they can't be penalized for having to break a lease early. Hence, it's really simple - you can't charge them any fees for breaking their lease (or what you're calling a M2M agreement) early.
I get what you're doing and you can always just keep doing it until someone decides to sue you. Landlords do that all the time here in CA with their pet rent fees, which aren't legal - but they get away with it all the time.
But, in my opinion it's just wrong, morally as well as legally. And if you could really live with yourself doing this, I don't think you'd be here asking for support. I don't intend to be mean to you. I understand you're trying to be creative and at first glance it seems like a great idea. But, I think you know this is wrong, even if you're not sure of the laws, etc., so you shouldn't do it. The law is pretty straightforward and reasonable, normally. So, if something just seems wrong, it's probably illegal.
I suggest you just charge a higher rent for a M2M contract, charge a lower rent for a year lease, if you want. We only did M2M contracts, no penalty fees. It's just easier for everyone.
Detroit, MI · Member since 2020 · 24 posts · 18 votes
6y
@Lynn M.
I agree, military bases are such a small and tight knit community. Speaking from the veiwpoint of a veteran, word travels fast when an apartment complex or property management company does things to screw over military personnel within the base. Even though you may have a to deal with the possibility of vacancy due to early termination in a military town. You gotta remember that for every person that deploys or leaves for a new base, there is another one who is coming back from a deployment or is arriving as a new duty station.
That being said, I think vacancy wont hold as big of an issue as traditional rentals in non-military towns, because bases will ALWAYS have people looking to rent, so if you maintain the reputation of treating these service members right, then you will not have a problem with this early termination.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
6y
@Richi Brown Yes, that is true. I actually have relatives and friends of former tenants calling me to see if I have anything available before they look elsewhere.