What to do when some of the tenants in a rental leave?

Question

I have a NJ rental (good 5 bedroom rental house, but not so good neighborhood and therefore not so good tenants). 3 adults, 4 kids and pets. 10 months prior to the end of the lease (All 3 adults signed one lease. No individual leases), on July 2nd, 2 adults, and their kids and all pets left without returning the keys. Each group claims that they paid the last month rent and security deposit. The lady who stayed, love the house and want to start a new lease and have new housemates as she can’t pay the whole rent (she paid half the rent end of June). FYI, I don’t want to take anyone to court. As with this type of tenants it is almost impossible to collect the debt. Share your thoughts on what is the best decision to make. Thank you.

1. If I keep the current lease, even in the best scenario if the tenant pays the rent (which is unlikely) then how would I deal with the security deposit at the end?

2. One solution is to let the lady break the lease and leave in exchange of my keeping the last month rent and security deposit. Then I use the money to get the place repaired and rented.

1. If I keep the current lease, even in the best scenario if the tenant pays the rent (which is unlikely) then how would I deal with the security deposit at the end?

2. One solution is to let the lady break the lease and leave in exchange of my keeping the last month rent and security deposit. Then I use the money to get the place repaired and rented.

Patricia Steiner · Answer

All the tenants are on the lease, right?  That makes them all jointly and severely liable for the terms of the lease until maturity.  If the rent is past-due:

1. Send all tenants a Notice To Quit for the non-payment of rent.  Whether they live there or not, they are all liable for the full amount of the rent.   This is the start of the eviction process.

2. In NJ effective 2020:  "Governor Murphy's executive order waives provisions of statutory law that prohibit the use of security deposits for rental payments, enabling tenants to instruct landlords to use their security deposits to offset rent or back rent."  Take the security deposit and apply it to the unpaid rent.

3.  Schedule an inspection.  If there are any lease violations, send all tenants a Notice to Cure and start the eviction process; lease violations are not part of the moratorium.

About the remaining tenant, she doesn't qualify to rent the property on her own.  That's the bottom line.  The writing is on the wall.  I recommend letting the current tenants do themselves in and evict them.  Then market the property for rent to a qualified tenant at the current fair market rent. You might find that Section 8 is a good option for securing good tenants with subsidized rent paid to you from HUD.

What starts out crazy just gets crazier so manage to the lease.  Don't get involved in who paid what or any personal drama - they are all in that lease together.

Theresa Harris · Answer

Group meeting or email and send everyone a copy of the signed lease.  Did they actually pay the last month's rent?

If the one person wants to stay, then tell her the terms of the lease and give her a deadline.  You should screen the new roommates and all are on the lease.  On the lease explain that they are all responsible for meeting the terms of the lease which includes paying rent.

Tell them they signed the lease and once it expires or the early termination clause is invoked.  Do not return any deposit until keys are returned and you've inspected the place. Even then it is up to the three or them to sort out.

Stephen Homes · Answer

Thank you Patricia for your detailed response.

1. What do you mean by "I recommend letting the current tenants do themselves in and evict them."? Do you mean wait till the tenant can't pay full rent and if she doesn't I start the eviction process? As of now she paid half the rent and told me that she will pay the remainder on the 9th.

2. Is it acceptable to send the notices as text/email to the tenants (as I don't have the address of the ones who left)?

3. Governor Murphy's executive order on security deposit is not good for the landlord. This will encourage the tenants to instruct the landlord to use the security deposit as last month rent, leaving the rental prone to damage.

Thank you

Stephen Homes · Answer

Thank you Theresa for sharing your thoughts. In answer to your question, last month, 1st month and security deposit was paid prior to giving keys. Their lease ends April 2022. There is a 60 day notice clause or the lease will extend for another year.

As they left on the 2nd of the month, gave me 1 day notice, didn't finish the lease, wouldn't be okay to keep the security deposit and last month rent? At least I spend 2 months of rent to get the place rented.

What to do when some of the tenants in a rental leave?

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