Tenant left 2 months into year lease. Do I owe PM new lease fee?

Tenant left 2 months into year lease. Do I owe PM new lease fee?

Investor · Brentwood, CA · Member since 2013 · 195 posts · 52 votes

MF property out of town, managed by PM.   Tenants, after signing a 1 yr lease, stay 2 months & move out without notice.

- PM says Tenants will be liable for 30 days rent. I know CA law says tenant is liable for rent until a new tenant is found.

-I would expect tenants also to be liable for any make-ready expense.  Correct?

- Should PM expect me to pay another lease-signing fee?

PS: As background, I researched the prospective tenants' social media online & would have been reluctant to rent to them.

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Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
4y

Tenants are responsible for lost rent until re-rented, lost percentage of cost for "make-ready expense" and lost percentage of cost for PM lease fee.

Assume that you re-rent with one lost month. The tenant is responsible for that lost month. They are also responsible for 9 months worth the cost of the "make-ready expense" and the PM fee. Since you paid 100% of those costs and they should have covered 12 months, but you only received rent for 3 months and are now incurring an additional cost, you are entitled to recoup the 9 months portion of money lost due to the early breaking of the lease. 

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    Talk to the PM.  They shouldn't charge you as they just placed the tenants and you paid for that, but they may see it differently.  I'd argue that you shouldn't pay the full amount.  I'd also find out from the PM how much the deposit is and make sure that gets applied to the rent.

  • Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    4y

    Tenants are responsible for lost rent until re-rented, lost percentage of cost for "make-ready expense" and lost percentage of cost for PM lease fee.

    Assume that you re-rent with one lost month. The tenant is responsible for that lost month. They are also responsible for 9 months worth the cost of the "make-ready expense" and the PM fee. Since you paid 100% of those costs and they should have covered 12 months, but you only received rent for 3 months and are now incurring an additional cost, you are entitled to recoup the 9 months portion of money lost due to the early breaking of the lease. 

  • Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    4y

    Entitled is one thing, getting is another.

  • Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    Your contract should stipulate however if they tried charging me I would not be ok with that.  In my opinion they should be collecting my lost rent as my priority #1 and if they are able to collect their listing fee from the tenant on top of me getting paid on my losses from them good for the PM.  I would not however be happy paying for a 2nd lease fee and depending on the previous relationship you had with them may be grounds for me looking for greener pastures.  Keep in mind though this is my thoughts, your contract is something you agreed to when you hired them so if they say you owe you do but no harm in asking them to waive it.  

  • Rental Property Investor · Seattle, WA · Member since 2014 · 69 posts · 51 votes
    4y

    Bad situation, but silver lining is you now get to see how the PM handles the situation. Meet with them in person, state your concerns, and see how they respond. If the response is inadequate, get a new PM.

    Some property managers only know how to manage properties/tenants in good times. This is not the PM you want managing your property.

  • Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    4y

    Your contract with the PM should stipulate this. My PM doesn't charge a new lease-up fee unless the tenant they place stays at least 6 months. 

  • Property Manager · Denver, CO · Member since 2021 · 667 posts · 587 votes
    4y

    @Lois S. Talk to the PM; the managing broker, not an assistant. Ask if they will work with you on this and if they won't budge, let them know you will not renewing the contract once it's up. Tell them that you have many investor friends and referrals will not be forthcoming if they can't be more reasonable. 

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