Tenant asking to break lease!? What do I say??

40 Replies

I just received a text from one of my tenants and I need to know how to respond!

She said, "Any chance you have someone wanting to rent? I wish I taken the 6 mo instead of 18. Things change so much. I'm starting a new job in rusk. Pay decrease. I'm not gonna break lease but if we can work out any way out of it best."

How would you respond to that?

Background- The property is in TX. She just paid her rent for this month today. She is 6 months into an 18 month lease and this lease is super tight. I will attach some pics of some of the language below.

She hasn’t proved to be the best tenant so I don’t really want her but it could take 1-4 months to rent AND we are in the process of doing a refinance. All the leases have been turned over to the bank. I know if I took her to court I wouldn’t get all she would owe me for breaking it.

Our lease says that she would NOT get her security deposit back for breaking the lease. Should I give her an option to leave early if she paid 2-3 months rent? If I do that does that substitute for "satisfying" the lease and then I can't get my security deposit from her or can I take both?

Also, since I have received it in text, do I ask her to send the request via email? Do I respond via email? Do I talk to her in person? 

I have attached images of pertinent pieces of our lease below.

Appreciate your advice, thank you in advance! 

Ultimately it is up to you, but in this situation, I'd let her break the lease with proper notice (30 or 60 days). Tell her she's on the hook for the rent until you find someone and then do your best to get a new tenant ASAP. Her knowing that she's on the hook for rent until you find someone should make her more open to showings and keep the place in good condition.

I don't see an early termination clause in your lease, at lease that you posted. Most leases have them.

Court is a major PITA and I would avoid it unless absolutely necessary. Even if this isn't written in your lease, I would tell her nicely that you are happy to find another renter to take her place, but that she will be responsible for the rent until the new renter is in place. Some renters will honor that and some won't. 

This has happened on multiple occasions to us.  Tell her fine but she has to pay rent and keep utilities in her name until you can find another renter.   Every tenant I have offered this to has been fine with this arrangement no questions asked. In my market, however, it has never taken more than about 30 days to re-rent. 

@Albert Hasson thank you for that info.  My question wold be, can I keep her holding deposit on top of what you said.  If I find a tenant and she has to pay for rent and utilities until a qualified tenant is in, I believe that my lease states I can still keep her security deposit.  Thoughts?

I'll start showing the unit. Keep the place super nice and it will rent a lot more quickly. As soon as I get another tenant, you're off the hook on their move in date. I can do a cash on the spot deposit if it's clean enough that I don't need to hire a cleaning crew before the new tenant moves in.

Originally posted by @Jill F. :

I'll start showing the unit. Keep the place super nice and it will rent a lot more quickly. As soon as I get another tenant, you're off the hook on their move in date. I can do a cash on the spot deposit if it's clean enough that I don't need to hire a cleaning crew before the new tenant moves in.

 Fair enough! Either way you can charge her for breaking the lease and ask her to vacate the house quickly. Conduct property preservation to keep the house clean and in good condition. Thereafter, you can start showing the house. 

@Theresa Harris

@James Marshall, @Michael Ablan

1) My question would be, can I keep her holding deposit on top of what was said above?

I will start searching for a new tenant but she will be responsible for rent and utilities till a new tenant is found and she also needs to keep the premises clean for showings.  

2) Do I tell her, and am I allowed to keep the security deposit? It is $2,000. I believe that my lease states I can still keep her security deposit. For breaking a lease. Or is by stating the above/letting her out of the lease constitute that she has finished the lease and I owe her the security deposit?

3) She has a dog so it would be hard to do a showing unless she and the dog were gone.

4) I want to email her something so I have a paper trail but I am trying to make sure I know what I can do before I begin to respond.  Thank you for your help!

It looks like your lease actually says in 17A that she has to pay the entire balance of the rent for the entire lease if she abandons it. That's the strongest lease I've ever seen in the landlord's favor, and pretty unnecessary in my opinion.

So assuming it's legal in Texas to have that in your lease, which you should check, then it looks like yes you would be within your rights to keep her deposit. Or you could just have her pay rent until you find a replacement and everyone will end up happy.

Work with her, list it for rent and let her go when you find a new tenant. What you want to do is advertise for a vacancy 2 months down the road to allow her time to arrange to move AFTER you find a replacement tenant. You deduct all your cost of finding a tenant from her deposit. This is the normal turnover process for experienced landlords. Very seldom have to experience a vacancy when you plan ahead and have good quality tenants.

If she wants out make her work and pay for it.

Landlord tenant laws in most states do not allow you to keep the security deposit as a penalty, only for actual damages or rents due.  So even if it's in your lease, it may not be enforceable.  I'd check that first.  Tenants will leave.  If they actually are responsible enough to work with you rather than just give notice and move, you're luckier than most.  I ask if they will work with me to find a qualified tenant, have the house in great shape and allow scheduled 3-hour window on weekends for applicant appointments, and agree to sign an early release addendum if a qualified applicant is found as I will not sign another lease until I have a release in case they change their minds and decide not to go.  That's been the most successful strategy, with very little turnover.  If they don't want me in there until after they leave, I do have an early release clause stating an early termination fee equal to 2 months' rent with x days notice, and notice period starts when both written notice and termination fee is received.    

@Jonathan Gregori I'm with @Lynn M. regarding the security deposit, I'd check with a local RE attorney regarding the legality of keeping the full security deposit as a pentalty for breaking the lease, everything I've ever seen points to the fact that the security deposit can only be used for damages above normal wear/tear or rent due (depending on the state). You may want to re-write your lease going forward to specify a early lease termination fee or something, rather than trying to take the security deposit.

You should read Texas Property Code, Tenant cannot waive rights surround security deposits and you may be liable.

Sec. 92.109. LIABILITY OF LANDLORD. (a) A landlord who in bad faith retains a security deposit in violation of this subchapter is liable for an amount equal to the sum of $100, three times the portion of the deposit wrongfully withheld, and the tenant's reasonable attorney's fees in a suit to recover the deposit.

@Account Closed

If we were both to sign a texas lease addendum that allows for early termination and I wanted to add a reletting fee $1,245 as well as a "FEE" equal to one or two months rent ($1,465 - $2,930) for letting her get out of her 18 month contract, which she is only 6 months into, would that suffice what she wants as well as allow me to get what I need.  I would think that would be fair because based on my lease, attached above she is on the hook for the other 12 months of rent, which equals $17,580.   Now we all know I won't get that, but we also know no tenant wants to have that following around their credit or having to go through court proceedings.

I am in the process of getting this current property out of a construction loan, this is a new property and trying to get into a Freddie/Fannie product with permanent financing.  It could take me up to 2 to 3 months to get her unit rented possibly.  I am listing the property myself in all outlets for potential renters, I am not using an agency.  

Or ANOTHER OPTION would be for me to negotiate just a reletting fee ($1,245) with the understanding that she is responsible to continue to pay all rent and utilities until I get a new tenant in place.

I know this may seem harsh, but If I were to ask her to leave early and the roles were reversed, she would raise holy hell on me.  If I had a bunch of tenants in the wings I would be more open.  Just that I am in a little of uncertainty with all that is happening at the moment.  

I know the goal here is to negotiate and create a win win, which is what I need.  But she has to put some skin in the game if I am going to give her a free pass on $17,580 (remainder of agreed upon lease).

Any thoughts would be much appreciated and welcomed.

@Ronald Rohde , I understand but If you look at the lease she signed, it is my impression that if we do not agree on an early termination of her contract according to the texas lease she signed see below, 17 a. states..  

Tenant shall be liable for damages to Landlord for all loss sustained, including, without limitation, the balance of the Rent and Additional Rent due for the remainder of the Term, court costs and reasonable attorneys’ fees;

To me I interpret that as, I am going to retain and use your security deposit towards what loss is sustained  as far as money owed to me for her not completing the lease and signed contract.  

Also if you look at section 4. Security Deposits of my lease it states in there ...

Landlord may retain the Security Deposit for nonpayment of Rent or Additional Rent, damage to the Premises, replacement of damaged or missing items on the Premises, and/or cleaning of the Premises beyond normal wear and tear, to perform any obligation Tenant fails to perform under this Lease, or in connection with Landlord’s remedies under this Lease

Again I would interpret that to I could retain the security deposit because of the obligation the tenant failed to perform in finishing out the required lease dates.

What you posted above is true but states... A landlord who in bad faith retains a security deposit.. is liable.  

My question would be, based on what she signed and agreed to, and what I laid out above would I still be retaining her security deposit in "bad faith"?

Now if we work out a deal, that we both we agree to, for example an "early termination", then I WOULD NOT be able to keep her security deposit.

The first thing you need to check is whether that clause in your lease is enforceable in Texas. If you have something in a lease that is contrary to the landlord-tenant laws of your area, it can't be enforced anyway, even if you both signed the lease.

If your laws are OK with it, then you are good to negotiate an early termination fee with the tenant as you state here.

@James Marshall the lease I received was from BP and was for the state of Texas.  So can I negotiate an early termination fee even though there is not one listed in our current lease by simply adding an addendum and having us both agree and sign it?

@Jonathan Gregori I would be careful in how you apply this lease. Most of the wording refers to Texas law for a reason. For example your lease says if they are 3 days late on rent that you can take back possession of the property. In theory this is true, but if they don't willingly leave, you can't throw them out. You need to take them to court for eviction. 

Also your lease states you are entitled to the rents for the entire lease term, but that is not a one time payment. Let's say she stops paying rent 6 months into an 18 month lease. You will need to take her court each month for rent. You can't sue someone for damages not incurred. The court is going to expect you to make good faith efforts to rerent the property. If you do rerent the property, then you cannot "double dip". That means once a new tenant is paying rent, she is no longer responsible.

My advice is work out a lease break agreement. Generally that is 1-2 months rent and a rerental fee. The rerental fee is usually 50-100% of a months rent. The rerental fee is for your time (or a property managers expense) to rerent the property. Most PM companies charge a maximum of one months rent for this service. You can apply the deposit to these fees, but I wouldn't take it in addition to.

Second option is tell her she is responsible for rent every month until you find a new tenant. This can be more risky, because you are relying on her to keep paying after she has left. Ideally you can start showing while she is still living there. 

Whatever arrangement you make, let her know if she meets the terms of your agreement that you will consider her as leaving in good standing. It is the "carrot at the end of the stick" to encourage her to follow through on the agreement. Have her sign a lease break agreement with the terms.

Above all, find a workable option instead of trying to force her to stay. Unfortunately lease breaks are part of the business. 

Originally posted by @Jonathan Gregori :

@James Marshall the lease I received was from BP and was for the state of Texas.  So can I negotiate an early termination fee even though there is not one listed in our current lease by simply adding an addendum and having us both agree and sign it?

 Yes, any contract can be modifying if both parties agree to the changes. 

@Jonathan Gregori Hey man, how are you? I saw your post. We just experienced something very similar. Tenant signed 12 month lease, notified at 6 mos was wanting to move. I read that Texas law requires landlords to take reasonable steps to keep their losses to a minimum when a tenant breaks their lease (Tex. Prop. Code Ann. § 91.006).

Our tenant kept paying rent, paying utilities, moved out and cleaned the place really well. We explained she wouldn't receive her deposit (minus charges) back until her lease was fulfilled. Once we found a new tenant, we returned roughly 50% of her deposit, pro-rated the months rent (prior paid) at lease signing for the new tenant and mailed her a check.

Not a lot of advice on my end, but thought I'd share my experience. Good to see you on here, take care and hit me up if I can do anything.

@Joe Splitrock ,@James Marshall ,@Mike Miller ,@Kevin S. ,@Lynn M.

Ugh.... her response.  Any thoughts.... Let the fun begin lol.

Gotcha. Well that certainly seems fair, and I understand how our lease was worded-thoroughly. I would love to take the second option, as I’m not excited to do damage to my credit, but I’ve lost my good paying job and will be making half as much when my new job starts (in two weeks). I could definitely give 27 days’ notice (actually from yesterday, 28) and assuming EVERYTHING in the house is in acceptable shape, forfeit my $2,500 deposit to you. I have no money to buy out up front even though I realize that would benefit me.

My only other option would be to face the consequences of civil court and those thousands of dollars plus court fees would definitely show on my credit. If that happens, I guess I’ll have to put you through the entire eviction process which means I could buy a little more time here, as my rent wouldn’t be late until May 2.

I’ll talk to some friends and see if they have any ideas.

Thanks for the offers,

I Just got that in response to my above link that I sent her via email.  What do you guys think now...   The problem is, she did not give me $2,500 security deposit.  She only gave me $2,000 and I have records signed by her for that amount.  Also there is about $300 - $500 worth of repairs for the house minus any cleaning and normal wear and tear.  So that would eat into that security deposit.

How would you negotiate going forward or would you give it a little more time before responding for her to let what she said sink in....?