Rental Property Investor · Pittsburgh, PA · Member since 2014 · 5 posts · 1 vote
I just recently purchased a duplex that and I am moving in to the 1st floor and the 2nd floor unit was rented. The tenant had signed a 1 year lease until July 2021.
The tenant just called me last night and stated that he has to break the lease and will be moving out at the end of November. I do have his last months rent and security deposit but am I able to keep this? Does he owe me more than that?
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
5y
@Richard Fish I would consult with a local real estate attorney that specializes in land lord tenant law. My guess would be that you could keep the rent fairly easily, but in your shoes I normally try to work with the tenant to re lease the property right away. If I am able to release it then I return the portion of the deposit/rent that I can. I look at these situations as a chance to treat others the way I would want to be treated, while still being fair.
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
5y
@Richard Fish I would consult with a local real estate attorney that specializes in land lord tenant law. My guess would be that you could keep the rent fairly easily, but in your shoes I normally try to work with the tenant to re lease the property right away. If I am able to release it then I return the portion of the deposit/rent that I can. I look at these situations as a chance to treat others the way I would want to be treated, while still being fair.
Rental Property Investor · Pittsburgh, PA · Member since 2014 · 5 posts · 1 vote
5y
@John Warren I completely agree and my goal is to rent the unit as soon as possible. I don’t want to keep any additional money if not needed but also want to make sure I have the funds to make up for any vacant months before finding a new tenant
@Richard Fish irrespective of what state you reside, you have a duty to mitigate your damages by attempting to relet the property. If you make a good faith effort to mitigate and cannot relet, your current tenant is most likely going to be held liable for the remaining rent. Consult a local real estate attorney that can help you through the process.
1. Document all communications with your tenant;
2. Document all attempts to relet the property;
3. Don’t touch the last month’s rent or the security deposit until the matter is resolved with a judgment or settlement agreement
Investor · Bethlehem, PA · Member since 2016 · 929 posts · 951 votes
5y
@Richard Fish What does your lease say? Most leases contain language for breaking a lease or early termination. I'd consult with a local property manager or lawyer, but if the lease is silent on the topic, in PA the tenant may be responsible for the remainder of the rent throughout the term of the lease. If you rent the unit prior to the end of the term, the 1st tenant is only required to pay the rent that was lost
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
5y
@Richard Fish Do you have an early lease termination fee clause in your lease? If not, keep the deposit of course and take them to small claims if you want.
Rental Property Investor · Pittsburgh, PA · Member since 2014 · 5 posts · 1 vote
5y
@Michael Noto I purchased the duplex after the lease was already in place so I inherited the tenant. After reviewing the lease further there is a Termination Clause that states...
“Tenant may, upon 45 days written notice to Landlord, terminate this lease provided that tenant pays a termination charge equal to 3 months rent. Termination charge shall be in addition to all rent due up to termination day.”
So with this, I would still receive November’s rent (they are moving out end of Nov.) plus 3 additional months worth? And security deposit would just be dependent on final walk thru?
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
5y
@Richard Fish Implement the ELT exactly how it states in the lease and remind the tenant of this clause. If the tenant has something to lose they will comply and pay the fee, if not they will just leave anyway so it won't matter.
Rental Property Investor · Pittsburgh, PA · Member since 2014 · 5 posts · 1 vote
5y
@Michael Noto thank you for the help! With this situation, is there any specific document that you would use to make sure both parties sign off on? Or just document the communication as much as possible
Developer · Portland, OR · Member since 2016 · 5 posts · 12 votes
5y
As I recall, here in Oregon you have to make a good faith effort to lease the place and can only collect for the time it is vacant, whatever the lease says about early termination fees. Look it up for your own state, there's probably good resources that will explain the law in a clear and concise way.