Just 2 weeks before the tenant was supposed to move in as a roommate to another tenant, they advised that they had changed their mind. I've offered the option of 3 months rent as opposed to the full 12 months as would otherwise be stipulated in the agreement given the following provision:
EARLY TERMINATION: Should Tenant vacate the premises prior to the expiration of the term of the lease agreement, Tenant shall be required to pay the balance of the lease agreement as an early termination fee.
Finding another tenant as a 'roommate' to the first tenant has not been easy - is small claims court an option in this case? Or a Court Mediator to settle the matter?
P.S. Tenant signed the lease and THEN changed their mind....
Did they give you a deposit and was it a non-refundable deposit? Easiest is to list it for rent immediately and do your best to fill it. They should cover rent until it is rented, but you are more likely to get water from a stone. Keep the deposit until it is rented.
Always collect a security deposit when a lease is signed, and make it clear in the lease that the deposit may be applied to unpaid rent. In this case, the unpaid rent would start the day that the tenant was supposed to pay the first month's rent.
Also, your clause "should tenant vacate the premises" doesn't seem to apply to a person who has not moved in. An early termination clause could specify a penalty to be paid by the vacating tenant even if a new tenant is found before the first tenant's deposit runs out. You should be entitled to some compensation for the trouble of finding a replacement tenant.
Good advice about the deposit - thank you!
Market your property, screen the new resident, fill the unit. No sense in wasting time and energy with the folks who bailed. We always require a “deposit” to hold the unit, if you have this, folks are less likely to change their minds. If they bail before taking residence, they forfeit the deposit.
Best of luck!
@Matt Ziegler This is what we do. Had a similar situation. Tenant gave me Deposit and first month’s rent. I kept deposit per the lease agreement that the deposit was to hold the property and then refunded the rent. It worked out about even as I had stopped advertising for a couple weeks after the lease was signed, but then once I reposted it still took a month until the next tenant’s lease started.
Thanks so much for the sage advice. I hadn't thought about retaining the security deposit for that purpose. It makes total sense. Thank you all for your time in response.