How to Cancel Lease Before Tenants Occupy - True Colors Shown

13 Replies

Appeal to BP Nation- I have erred in accepting tenants and seek to cancel a lease before the tenants occupy. 

I went through my usual screening process which has treated me well for decades and it looks like I missed something on some tenants I accepted. The tenants were fine with the condition of the property and asked if there was going to be a professional cleaning and I said I"d never done that before and they agreed that no professional cleaning was necessary - the carpets had already been cleaned by a pro. 

On the date of move-in, tenants refused to take occupancy or move any items in, and said it had to be cleaned by a pro and wanted me to pay $350 to do so. They were absolutely freaked-out that they literally had "found a dead fly" on a countertop. I've already been threatened with legal action before ever taking occupancy. 

I can see this will be an extremely difficult tenancy and would like to return their monies in exchange for a lease termination agreement. I really think the one person has an undiagnosed medical/mental condition, despite their 800 credit score, etc.

In considering what their "damages" would be - they are living in the basement of the wife's mother, where they moved to take care of her after a surgery, shortly after their wedding - so their damages would seem minimal. They have a 5 year rental history as a couple prior to their wedding, before that. 

The lease agreement was made on July 28, though for some reason I signed my side of it on July 31 as I had in my mind that they could move in on July 31, despite signing it on July 28. 

They paid me in cash and are also besides themselves now - that they didn't get a receipt from me. I was given a deadline of yesterday to provide them with both a receipt and a statement that I will pay for the professional cleaning. I am told they have a relative who is an attorney, etc. I haven't mentioned that I want to cancel the lease yet but the best time to get rid of a problem seems to be before it moves in, so to speak. There is no shortage of interest in the Denver, CO market. 

The tenants make 3.1 times the rent (which is acceptable) and so are close on the rent/income ratio and not especially "long on cash". If I say I will return their monies of $3700 in full for a lease termination agreement - or they can take me to court - they would probably choose to have their money back now so they can pursue another property. 

How can I exit this situation, as I now know the character of the persons I"m dealing with? The escalation/controlling during phone conversations has been unbelievable. 

There will probably be another dead fly in the property -perhaps even a spider - before the lease would conclude and I just don't need to go through all this, especially in such a strong market. It seems I"ll be more their "employee" than their  landlord throughout the term of the lease. This would seem like the best time to assert myself. 

Help!

@Burt L. , Some people, I'll tell ya.  Since you want them out I would not agree to any of their "demands".  Just tell them "sorry, I'm not able to do that".  Then tell that it sounds like this property is not ideal for you so you will give them all their money back and let them out of the lease.  The key here is that you have them tell you they want to leave and not you telling them they can't live there.  That will put any liability on them.

Since you signed the lease, you must uphold your end of the agreement.  

@Burt L. Just like @Brad Hammond said, I would tell them the property will be delivered "as-is" and if that is not acceptable, you understand and will happily return their funds so they can pursue another property that better meets their needs. Chances are, they actually did find something they like better and regret signing the lease. This was their way of trying to wiggle out of it. Fingers crossed that is the case. Good luck!

@Burt L.     Wow,  I guess you could have picked that up when they asked for a professional clean if it was clean but probably not. I would ask them to sign a termination of lease agreement  by  x date and you will return their money (all or pro rated).   The incentive to get a big chunk back may entice them.   I usually do a clean before occupancy but if I have a prospect who is asking for lots of little things at showing I usually pass because I know they are going to be super picky.  You should have given a receipt indicating how much of the deposit was non-refundable. 

Now if they had asked for a termination I would definitely retain money but since you are letting them out with the "happy clause".  Hey you aren't happy this isn't going to work out and you want out I would take a different approach. 

It seems a little excessive to cancel the lease. I don't see what legal grounds you have to do so and it doesn't seem like the best resolution.

In my experience, when most tenants move out, they do a poor job of cleaning. Most landlords just leave it "as is" and consider it "good enough". I suspect there was more than the fly that was a concern if you were being honest with us. If you believe I am wrong, get a new mop and clean bucket of water. Mop the floor and see what color the water is. 

I would tell the tenant that it was cleaned, but for their piece of mind, I will hire a professional cleaner to address anything that visibly needs attention. Walk through he property and have them point out dirty items. Take photos and have them sign the list. I would give that list to my cleaner and odds are good she could knock it out in 2-3 hours. It would cost me around $100. 

It is honestly cheaper to clean for a $100-200 than taking a loss for lease cancellation. Just because you address a customers concern, doesn't make you an employee. If you hire a third party person to clean, it makes it difficult for them to claim the property is not clean. 

Also for future reference, prior to doing the move-in walk through, I advise walking through the property with a bottle of 409 and some paper towels. Wipe off counters and any visible signs of dust or dirt. You are right that a fly or spider or even dust could fall after something is cleaned. Doing a ten minute wipe down can eliminate the perception of things being dirty.

One thing to look for is a way to improve your process.  In this case, never sign a lease prior to a tenant and you should never sign a lease until the day of move in.  They may sign it and make demands but you never sign it until you here those demands.  that would have helped you avoid this situation to begin with.

Now that you are here, two things.  The attorney thing.  What does your lease say about "as-is"?  Anything?  There is a presumption that they accepted the place as they did sign the lease and gave you funds.  I mean they may not know if the furnace works (as it is August) but they should have seen if it was clean enough for them or not.  A lot of people threaten to sue, a lot of people have family members that are attorneys I would not worry about this unless and until it becomes an issue. 

What to do about them at this point, well, you are a bit between a rock and a hard place.  While I agree with Joe that arguing over 300 isn't worth the drama this tenant has clearly raised a red flag and I understand why you want to reverse course.  Can they refuse to pay rent over a dead fly?  If they do can you do anything about it locally with eviction restrictions in place?  Not sure your local laws so you may want to consider local laws/restrictions on your options at this point. 

That said, if you told them you are not going to have it professionally cleaned and they agreed, is that in writing?  Text or email? Even if not you can give them the choice.  Sign a termination of lease and get your money back or take it as it and you may get lucky and they back out.  If not, knowing how difficult it can be to evict due to non-payment of rent you may have to just bite the bullet and find any silver lining in a lesson you learned.  

Hm, you need to check what the laws are in Colorado. But here in Hawaii, if there's no possession, the lease is not binding. I had a similar situation happen where the prior tenant did not move out timely, the new tenant could not move in as scheduled and I simply returned their deposit no damages, no problems.

I agree these folks sound high maintenance and I'd go with your gut feeling of NOT renting to them. 

You don't "cancel the lease'. That's stupid. If they don't move in they are breaking the contract. The upside is you may not even  have to evict them. Part of being a professional is ignoring their idle threats. 

@Burt L. Call your local real estate Association and ask them which real estate attorney they suggest you talk to. Talk to an attorney before doing anything because you don’t want to get sued for breaking fair housing laws. Also there are scammers out there to do some really interesting things. If you don’t already do so from now on do a background check. 

@Burt L. Hi Burt, maybe the $350 is a small price to pay compared to the alternative. Just increase the rent at lease renewal and make it back. You said they make 3x to cost of rent so that shouldn’t be a problem. 😁

@Burt L. I would give them a version of the “happy clause” i.e. “It doesn’t seem like you’re going to be happy with this property and it’s management, so let’s not move forward with having you live there. Please sign this mutual rescission which cancels our lease agreement at your earliest convenience.” Then return their money that they gave you and stop responding to them. If you haven’t given them the keys and they haven’t moved in/ there’s no possession of the property, you should be good but check with the local landlord/tenant laws or an attorney to confirm that. As you’ve said, Denver has too many quality people looking for a place to live, there’s really no point dealing with a pushy tenant that’s obviously going to be a pain in the neck. I had something similar happen recently with a tenant that seemed great at first but then started being difficult just prior to moving in. They insisted on being able to install a hot tub and getting a dish mounted on the roof despite the lease not allowing them and me telling them no several times, etc. I simply told them it wasn’t going to work out then stopped responding to them and found a tenant that was more easy-going. I hadn’t signed the lease yet with them though, as they sent it back with about 40 changes they wanted made (who does that?). Life’s too short to deal with annoying people anymore than necessary. Good luck!