Avoiding Lawsuits - Consequences of Poorly Written Leases
Property Manager · Boise, ID · Member since 2024 · 20 posts · 7 votes
Leases are legal contracts and the ramifications of poorly or vague language regarding late fees, early terminations, breaking the lease, re-let and the costs associated and "double dipping" in our state are very vague and there is statues that discuss "reasonableness' in accessing fees. As I constantly find myself updating our contracts even after an attorney review I am seeing areas where language has to be spelled out or they will fail to hold up if disputed by renters and the ability to collect after a renter goes dark is even more daunting as the legal costs to pursue damages and then collect are not worth the effort as even you get the judgement collection is a costly experience. A security deposit does not cover much on broken leases and the costs associated with re-marketing and re letting rentals. If anyone has best practices on this topic please chime in.
Hi there Thomas!
In real estate law, there’s always a bit of a tug-of-war between what feels “reasonable” and what the contract actually says, especially when it comes to liquidated damages and administrative fees. In states that lean heavily on fairness and equity, your best protection as a landlord isn’t just a signed lease, it’s being able to clearly show that your fees are reasonable and tied to real costs, not designed to punish a tenant for leaving early. One common pitfall is “double-dipping,” where a landlord charges a re-letting fee and then also collects rent from a new tenant for the same time period. The way around that is to be very clear in the lease that administrative costs are separate from lost rent. If you can point to actual staff time, marketing expenses, and overhead caused by an early termination, it’s much easier to defend a flat re-letting fee even if the unit gets re-rented quickly.
When tenants disappear or simply stop paying, the bigger issue is whether chasing them through the courts is worth the time and money. Since a security deposit rarely covers the full damage, one practical option is to include a buy-out or liquidated damages clause in the lease. That said, in the real world, it’s often smarter to encourage a clean break rather than spending good money trying to collect from someone who may never pay anyway.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
Hi there Thomas!
In real estate law, there’s always a bit of a tug-of-war between what feels “reasonable” and what the contract actually says, especially when it comes to liquidated damages and administrative fees. In states that lean heavily on fairness and equity, your best protection as a landlord isn’t just a signed lease, it’s being able to clearly show that your fees are reasonable and tied to real costs, not designed to punish a tenant for leaving early. One common pitfall is “double-dipping,” where a landlord charges a re-letting fee and then also collects rent from a new tenant for the same time period. The way around that is to be very clear in the lease that administrative costs are separate from lost rent. If you can point to actual staff time, marketing expenses, and overhead caused by an early termination, it’s much easier to defend a flat re-letting fee even if the unit gets re-rented quickly.
When tenants disappear or simply stop paying, the bigger issue is whether chasing them through the courts is worth the time and money. Since a security deposit rarely covers the full damage, one practical option is to include a buy-out or liquidated damages clause in the lease. That said, in the real world, it’s often smarter to encourage a clean break rather than spending good money trying to collect from someone who may never pay anyway.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
Hi there Thomas!
In real estate law, there’s always a bit of a tug-of-war between what feels “reasonable” and what the contract actually says, especially when it comes to liquidated damages and administrative fees. In states that lean heavily on fairness and equity, your best protection as a landlord isn’t just a signed lease, it’s being able to clearly show that your fees are reasonable and tied to real costs, not designed to punish a tenant for leaving early. One common pitfall is “double-dipping,” where a landlord charges a re-letting fee and then also collects rent from a new tenant for the same time period. The way around that is to be very clear in the lease that administrative costs are separate from lost rent. If you can point to actual staff time, marketing expenses, and overhead caused by an early termination, it’s much easier to defend a flat re-letting fee even if the unit gets re-rented quickly.
When tenants disappear or simply stop paying, the bigger issue is whether chasing them through the courts is worth the time and money. Since a security deposit rarely covers the full damage, one practical option is to include a buy-out or liquidated damages clause in the lease. That said, in the real world, it’s often smarter to encourage a clean break rather than spending good money trying to collect from someone who may never pay anyway.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
Lauren and Jim,
Great feedback, I appreciate! Lauren I like the Buy-Out clause idea a lot. The admin costs being separate from lost rent is also a great add to our leases. Evictions are a last resort. We are focused on avoiding evictions as its a lose-lose for landlords and us as tracking down people for a few thousand is just not worth it. I wonder if we can collect more in lease signing "move-out fees" to help mitigate the unforeseen costs caused by tenants breaking their leases. In this business you can pretty much plan on surprises even with most qualified vetted tenants..ughYou’re spot on — most lease issues don’t show up until enforcement.
A good rule is to write leases like a judge will read them. Fees, early termination terms, and damage charges should be clearly defined, tied to real costs, and applied consistently. Vague “reasonable” language without context is where disputes start, especially around re-letting and avoiding anything that looks like double recovery.
Also, the lease is only part of it. Solid move-in inspections, written communication, and proof of re-marketing efforts often matter just as much if something is challenged.
Even the best lease can’t fix the reality that collections are tough. That’s why prevention, clarity, and documentation usually protect owners more than trying to chase losses later.
@Jim Johnson great, great post. When you write a lease "for a judge," you are essentially protecting yourself against the legal principle of contra proferentem. In contract law, ambiguous terms are almost always interpreted against the drafter (the landlord).
To double down on this:
You’re absolutely right — most lease trouble shows up during enforcement, not signing.
A few best practices many operators lean on:
A lease reduces risk, but clear processes and documentation are what usually determine how things hold up when tested.