Transfering lease to one of the two tenants.

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Transfering lease to one of the two tenants.

Brett M.
Tacoma, WA · Member since 2015 · 14 posts · 2 votes

I have a 1 year lease that has matured into a month to month contract with two tentants.

One of the tenants has given me the 60 day notice that they will be moving. The other tenant would like to stay on the month to month lease and would still qualify by themselves.

What would be the cleanest way to do this?


I have never dealt with this before but was at first considering just signing a new lease with the 1 tenant that wants to stay but there will be no way for me to do a proper move out inspection with the tenant that plans on staying still moved in with their stuff in the way.

My next option I was considering was just transferring the whole contract to the tenant that wants to stay and making them solely responsible for the contract until  they move out.

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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
5y

You can do an addendum to remove the leaving tenant. The security deposit settlement is typically between the 2 tenants in this situation and it rolls over to the new lease, this is stated in the addendum and it is signed off on by both tenants. You must get written consent when you do this from the leaving tenant.   

You can write a new month to month lease for the staying tenant and collect a new security deposit. In this case offer to do an inspection for any current issues acknowledging that anything after this inspection is the responsibility of the staying tenant. Send a letter to both tenants at the current address explaining deductions with refund.   Now the easiest way is after inspection if both tenants sign they will split the deposit evenly and just credit the staying tenant for their portion.  In all cases you need signatures of the leaving tenant and the staying tenant

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    5y

    You can do an addendum to remove the leaving tenant. The security deposit settlement is typically between the 2 tenants in this situation and it rolls over to the new lease, this is stated in the addendum and it is signed off on by both tenants. You must get written consent when you do this from the leaving tenant.   

    You can write a new month to month lease for the staying tenant and collect a new security deposit. In this case offer to do an inspection for any current issues acknowledging that anything after this inspection is the responsibility of the staying tenant. Send a letter to both tenants at the current address explaining deductions with refund.   Now the easiest way is after inspection if both tenants sign they will split the deposit evenly and just credit the staying tenant for their portion.  In all cases you need signatures of the leaving tenant and the staying tenant

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  • Filipe Pereira
    Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    The easiest and cleanest way to do this is to close out the old lease and security deposit as you normally would and write a new one for the solo tenant. 

    It's a bit more work, but from an organization standpoint moving forward, it's probably the cleanest.

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  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    5y

    @Brett M., I prefer the amendment route, personally.  This keeps the original lease in full force and does not institute any condition assessment until your remaining tenant actual moves out.

    Scenarios I am thinking of: tenants put a hole in a wall, and then put furniture in front of it.  If your tenant is staying put, are you going to ask him to move all his furniture and rugs to do a true assessment?  If not, then with a new lease you are signing off that you inspected the place, it is alright, and now that hole is your issue, especially if the tenant has record of it existing and you don't.

    Additionally, while the tenants may choose to settle up the security deposit between the two of them, you could keep language in the lease that the leaving tenant can still be liable for damages when the staying tenant does finally move out, almost as a contingent liability if the staying tenant does not satisfy.  This would be your choice, but from my perspective as the landlord, I want to have as many people on the hook as possible.  But if it becomes a point of contention on the amendment, you pull them off entirely.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    I use a "Remove Tenant Addendum" to get rid of one tenant and keep the second tenant locked in. It basically says:

    Tenant A will move out on [DATE]. At that time, he relinquishes all rights and responsibilities for the rental. He also gives up all rights to the deposit so anything belonging to him should be paid by Tenant B directly.

    Tenant B will remain as the only occupant under the existing lease. He accepts all responsibility for the condition of the rental and payment of rent. If Tenant B moves out a year later, they can't blame Tenant A for the broken window or stains in the carpet.

    Good on you for confirming Tenant B can afford the rent on his own.

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  • Peter Shafik
    Member since 2018 · 65 posts · 25 votes
    5y

    Good stuff

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