What to Do--Brand New Tenant Wants Out for Medical Reasons

16 Replies

With the lease starting today, I have a tenant who contacted me yesterday saying she was just diagnosed with "a virus" and needs to get out of the lease. She says she probably needs to take leave without pay from work, as well as possibly leave Denver and Colorado to head back to her parents in Indiana, so they can help with the situation. What would you do?

I have June's rent and the security deposit, but I feel like I should probably do what I can to get the place re-rented (I do my own leasing). It's not something I look forward to-- with this last turnover being an unusually more challenging/lengthy process, but I certainly don't feeling like holding her "hostage."

My feeling is, I can work to get it re-rented, but until that happens--she's responsible. I don't have any language that covers this situation in the lease--because the agreement is--she's responsible. But would you charge a re-renting fee? Take the full deposit (equal to 1 month)? Or what?

Thanks for any advice.

I would let her out without saying it. Tell her that as long as she leaves the place in great shape and ready to re-rent, you will get it filled as quickly as you can with another well qualified tenant. She will be responsible for payment until you are able to get it re-rented.

Encourage that the better it is left the faster you can get it filled and more of the deposit you will be able to return. If the virus is true or not- she isn't going to be there long- all has to do with mitigating your losses/vacancy. Re-rent Fee - is it in the lease? if not, you cant charge it. 

In this situation I personally am much less worried about how much I can charge this person and more interested in what it will take to refill with a great tenant.

Hi Brian,

If you don't have a re-lease fee in your contract, I wouldn't arbitrarily pick a number to charge her.  With my tenants, they are responsible for rent up to the point that I sign a new tenant.  If it were me, I'd ask her to give her notice (it will be short of whatever your minimum is) and tell her that the day after she moves and you confirm that everything is in order (move out inspection, damages, cleaning, etc.) then you'll begin showing it to prospective tenants.  You can even help her out by advertising it early and scheduling an open house, IF she can solidly commit to the move out date and leaves it in good condition.

I'd emphasize that you're willing to let her out of the lease even though you don't have to, but she will be absolutely responsible for rent until the date of the new lease.  This means it's in her best interest to leave it in perfect condition so you can turn it around quick.  This also means she pays rent on the first of the next month, whether she is there or not.  Save the deposit until you re-lease.

In my opinion, there's no use in sticking someone with the entire year's rent.  Things happen and renters move.  Just cover your bases, make it clear to her, and eliminate any vacancy (financial loss, that is) between her and the next renter.  Good luck!

We just had a similar situation except it was a break up and they were our tenants for a few months.  We told the tenants when the place re rented then the lease would be broken.  Now, because we did this without anything in writing (lesson learned) we did resign the house and that morning the current tenant changed her mind and wanted to stay.  Luckily I had another house open and the newly signed tenants took that place.  If not it could have gotten ugly.  I did not intend to charge a fee but in our contract COULD have kept the deposit because the 12 month rental period was not satisfied.  

We have an "early move-out options" sheet that we give tenants who bring this up.

They select the option they want and sign and date to make it legally binding.

You can outline the desired options in the document, but I would at least charge her for rent up until the date that the new tenants move in. I'd also perform a move-out walk through and use the deposit for repairs if necessary.

I like that idea as well and am interested as to what options are given.  I've never had a tenant back out like that but I would have probably let them out of the lease but keep the rent and deposit for your trouble and having to re-lease.  They did sign a contract and could be made to uphold their end of it.  I find it's best to walk away and not fight it as it just causes more headaches.  Good Luck, Mike

@Brian Kraft you should visit my blog on early termination for future reference. It will happen again. @Tyson Luthy I like your idea as people like choices but if these aren't in your lease all that is required is that you rerent as soon as possible and you eat the lose of time. 

Why was your last turnover challenging? What can you do to stream-line this? If your turnover time was more than 1 month you have something seriously wrong with your systems. Take a good hard look and see what's going on. Send me a pm if you would like to discuss.

Go by what the lease says. If you don't have that language in the contract, then you learned a lesson.

In this market you should be able to rent it by the weekend. Chalk this one up to lesson learned and move on. It isn't worth the potential headache. 

Thanks, all! Very helpful discussion. 

She had a 1 month overlap between places, so she didn't actually move anything in--which makes that portion of it a non-issue.

I would also like to hear from @Tyson Luthy on what options you provide.

@Bill S. Thanks for offering to help my turnover process. There were 0 days of vacancy, but the process was a little more arduous than typical for me. I do have a very streamlined process, I believe. It was just little oddities--like an hour before I was going to sign the lease with another person, he backed out because of complications of still co-owning a house with his ex-wife (they just got divorced and it seems they didn't have everything ironed out...despite me probing thoroughly on the subject). Also, I had around 285 different people contact me about the house. I copy and paste pre-written responses (with tons of information to minimize questions) and reply en masse when I can, but with that number of people, it can get a little cumbersome to make sure everyone has their questions answered or personal requests addressed. I also hold open houses. 1-3 open houses is typical for my properties, with most being closer to 1. But, this property is the most rough around the edges of any of mine, so this round was 3... plus being a photographer, it presents better online than in person. In fact, I always have people saying they want to rent site-unseen, but I never agree to it, because I want them to lay their own eyes on the place (mitigating issues down the road, if they end up somehow displeased). In addition, this time around it seemed there was a higher online/email interest, compared to the number of people that actually show up for an open house. "I will definitely be there" was said far many more times than people actually walking through the door.  

@Walker Hinshaw @Millie D. @Brian Kraft

Here are the different options we offer:

Option #1: Continue to pay rent until your lease ends

The tenant can move out but continues paying rent, utilities, and follows the terms of the lease until the end date. This option works best for tenants who need to move out a month or two early.

� Option #2: Pay the Lease Buy-Out

This option allows the tenant to move out without penalties or collections for the remainder of the lease.

-Pay Lease Buy-Out amount as outlined in your lease (Typically equal to 3 months rent), plus an additional $685 to cover the turnover service.

-Follow the instructions in the Move-Out Packet

-Deposit will be refunded as outlined in lease and Move-Out Packet

-You will not be charged for additional rent or penalized for moving out early

� Option #3: The “Re-Rental Program”

With this option the tenant pays $350 to enroll in this program. The tenant continues to pay rent and utilities until a qualified applicant signs and begins a new lease. The following rules apply:

-The property and lease terms are listed for rent on the property manger’s website. You may not also advertise it as this will create confusion for perspective renters. Understand that you are only showing the unit and all questions should be directed to your property manager.

-Tenant agrees to follow the instructions in the Move-Out Packet. It is important that the tenant leaves the property in excellent condition for it to rent quickly. If the unit is not in excellent condition the tenant agrees to pay for necessary work as outlined in the Move-Out packet.

-Tenant continues to pay rent and utilities until a qualified applicant takes possession (there may be a 3-4 day turnaround period between tenants that you will be responsible for).

-Any charges left unpaid for more than 30 days will be sent to a collection company and an additional 33% to 50% will be added for any collection or attorney costs incurred by the property manager.

Tenants who need to move out early and do not want to be penalized need to complete this form and return it to your property manager for approval.

*** I understand that the terms of the lease for the new tenant will be determined by the property manager and posted on the website. I am not to discuss rent, pets, deposit or other lease related terms with people who are looking to re-rent my unit.

I _________________ at ___________________choose Option #______ and agree to terms above.

(Tenant Name) (Address)

_______________________ ________ __________________________ ________

Tenant Signature Date Property Manager Signature Date

------------------------------------------------------------------

Obviously, the first and second option make the third option look the best - which is the one we want them to take, really. It is the most fair for everyone and protects the owner.

Hope that helps!

@Tyson Luthy

Thank you, very informative. Is this something that you have to outline in your lease or could I present something like this to a tenant without having to worry about legal recourse?

I can tell you that under Colorado law you are not obligated to let a tenant out of a lease for medical reasons.  When we had to move my grandma from her apartment to a skilled nursing facility a few years ago, I investigated this.   Full notice per the lease was still required.  I sent a final rent payment to the apartments after she had passed away.

Others have given you lots of good feedback.  I just do month to month, so as long as she provided proper notice, I'd let her go.  I'd be amazed if you had any issue renting a place here and now.  Vacancies are non-existent.

I'd offer the place to the next person on your list. If they are still interested and are able to (and actually DO) move in July 1st or before then I would consider giving her deposit (or part of it) back. Whether I returned the deposit or not would probably depend on how activated my ******** alarm was, and how much inconvenience/time was involved. You can sometimes do a little sniffing on facebook, etc and maybe find out if her story rings true... It sounds a bit dodgy on the surface of it, but obviously I am jumping to conclusions since I have no real info. Maybe I'm just jaded! 

Haha...@Jean Bolger , you know my wife, so you'll get a kick out of this... When I first told her about this hiccup, the first word out of her mouth was, "sociopath." :-) I, however, am not jumping to any conclusions. Nor do I care to waste energy trying to figure it out. If it's legit, I'm happy to help her out. If she's lying, I'm happy to see her go.  

Originally posted by @Walker Hinshaw :

@Tyson Luthy

Thank you, very informative. Is this something that you have to outline in your lease or could I present something like this to a tenant without having to worry about legal recourse?

I'm not an attorney, thus not qualified to answer. However, I believe it is always a good idea to include anything and everything in the lease - so long as it is enforceable and protects your interests.

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