Tenant accidentally paid this month after moving out, but damage

6 Replies

We had tenants (roommates) who were supposed to be out as of November 22.  The one I had contact with told me that night he would not be done.  Then on November 23, when he brought the key to me, he informed me his roommate still had a ton of stuff there.  After several days of telling them to get it and pay an overage fee of $250, contact with the second roommate stopped (clearly did not want to pay the overage).  Roommate one emailed me a letter to relinquish the property, however, we have damage beyond what the deposit will support, "holdover" days since the home was not technically vacated, and now, we have to pay to haul everything away AND get it cleaned.

Well, lo and behold, original tenant who we had contact with, had rent on autopay and we received payment today.  

Is it acceptable to subtract the additional costs from these monies since I already have a full accounting done?  Or am I bound to refund the entire payment and then sue them for damages and holdover rent?  

Note: our realtor confirmed that there was no proration clause in the lease, so we could technically hit them for an entire month of rent for the holdover time, but we were only going to charge $250 as of last week, but now I can't even get someone to take the stuff for free, so there are additional fees.

(New landlord, and trying to do it on the up and up!)

I would think so.  Until they're BOTH completely out, they still have possession of the unit.  I'm guessing your lease is like that of most -- Joint and Several Liability and all that right?  If so, you can legally charge either one OR BOTH of them.

The only thing I see to question:  who initiated the ACH?  Was it on your end or their end?  If it was on your end, you MIGHT have an issue.  If it was on his end, then HE was supposed to tell the ACH processor.  i.e. if it was done via Cozy, that's tenant initiated.  If the LL submitted the tenant's account info to the processor, then it's LL initiated.

Wow.  This sounds crazy.  Alot of issues to deal with here.  Let me try and break them down as they relate to a solution.

For starters, you will need to refer to your lease.  These are your instructions for how to handle EVERYTHING!  I can't, and won't speak to a Texas lease because I am in AZ, but I can speak to things that you need to look into as it should be the same.

First, are both tenants on the lease, and responsible for the lease?  If so, then even if 1 roommate moves out and relinquishes, they are still liable for the lease.  It's all about possession.  IF they have told you they are out, but clearly haven't relinquished ALL keys, and haven't vacated, then they are still in possession, and you can collect rent for each day that they are in possession.  IF they have given you all keys, and are out, but just left a bunch of stuff there, it is considered garbage/abandoned, and you can charge them for removing it.  Again, full disclosure, I am speaking to AZ leases.  So, you will want to refer to your lease for specifics on what it calls for.  There is a section on possession.  If you have to evict, and they leave stuff, you have to store it for 30 days before throwing it away, but you can charge them for the storage.

Regarding a Tenant at Sufferage (this is the Tenant that hasn't moved out yet), you have to go through the eviction process for this.  Send your 5 day pay or quit ASAP to get this started.  They will owe you for rent each day that they continue to stay beyond their lease expiration.  Your agent may be correct in advising you that you can charge the whole month, but a judge may be more sympathetic and allow for a prorate of the rental rate.  Therefore, you may want to look at a prorate when you file court docs to appear sympathetic yourself so that you have the judge on your side (they are supposed to be impartial, but they always seem to side with the "poor tenant who is being kicked out" instead of the "big bad mean landlord").

Now, regarding the funds you received from the auto-pay of their monthly rent.  These are intended as rents, not deposits.  If you refer to your lease, it will probably tell you that pre-paid rents (in this case they would be post-paid rents) cannot be used for damages or considered as security deposits.  So, in my opinion (again, unless your lease in Texas states differently), you cannot keep these funds to cover damages unless you have written agreement from the Tenant to do so.

I know this isn't what you want to hear, but you will most likely have to return the post-paid rent, and then pursue an eviction to get the 2nd tenant out, and collect for damages.  Most likely, when the Tenant figures out their auto pay went through, they will contact the bank and have it reversed anyway, so my guess is that money won't stay in your account long.

I hope this helps.  Best of luck to you.

Do not take the additional costs out of the rent payment. Charge them the additional months rent and call it a wash. That is the llegal way to win.

Need to review your lease for holding over. Write them a formal letter detailing the accounting and withholding of deposit.

Cara seems to be a wealth of knowledge and likely knows exactly what to do, however;

Your a new Landlord. Get used to cutting your loses and pushing forward instead of waisting time looking back.

99% of the time neither person wants to go to court - they simply want to move on with their lives. If they have not been in contact with you, they likely will not call you to recover the rent because they know they left the house a wreck. Or they will call back to recover the rent, and you will have the chance to come to an agreement: they clean the place up and move their stuff out and you pro rate the rent for the overage days, or they leave their stuff and you charge them the months rent and keep the security deposit to cover cleanup and repair.

I have had plenty of awkward endings with tenants, and never once did it end in court. Keep the money unless they make it right.

The tenant is liable for rent until they are moved out. You have a right to charge them for the holdover, as well as cleaning and repairs.

If both tenants are on the same lease, they are both responsible. You should have a clause regarding "joint and several liability" which basically says all tenants are 100% responsible for the terms of the lease. This means if Tenant #1 moves out on time but Tenant #2 takes two additional weeks,  both tenants are 100% liable for the additional two weeks of rent.

Personal opinion: Tenant #1 knew there would be additional charges so charge him for it. If he wants to complain, tell him to talk to his roommate that refused to be out by the agreed date.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here