All Forum Posts by: Keith Barton

The goal is that a letter of intent should not be a binding contract. However, a letter of intent can be written in such a way as to constitute a binding contract if one is not careful (and if the other party signs the letter/contract)

If the old tenant gave you notice that he is leaving by a certain date, then he is canceling his lease. Just because his name is written on the paper does not mean he is still a tenant. Therefore, once he is gone - you should not have to worry about replacing the locks being considered constructive eviction (as long as you give the keys to the other tenants that is....)

YES, you should definitely issue a new lease to reflect the change in the named tenants. The lease should also address the fact that the security deposit has already been given and will be carried over to the new lease - and while you are at it, specify that the security deposit (if returned) will be returned to the person who gave it to you (as long as this complies with FL law).

Also, given the circumstances you describe and without knowing what, if anything, FL law states about the security deposit and the tenant who is leaving - I would guess he is not due any security deposit from you. If he wants any of it, I would think he needs to get it from the couple.

If PA state statutes are old and do not address as many things as other states do; and, if PA courts refer to other state statutes when deciding lawsuits - it sounds like a full understanding of the current status of landlord tenant law in PA requires knowing the common law rules.

This means:
1) read the statutes - if a statute addresses your question directly great - thay MAY be the answer
2) read any case law addressing your question. If the statute seemed to answer your question directly the common law (or case law) rule could have changed what you think the statute says. If the statutes do not address your question, then the case law very well may give you the answer.
3) make sure any case law answer to your question applies in your jurisdiction.

Note about jurisdiction:
Jurisdiction means a certain geographical area (for this conversation anyway - there are times when jurisdiction doesn't refer to geography.)

The size of the geographical area depends on a number of factors. Each state has different nomenclature for the following information - I am using the nomenclature used in the state of Ohio....

If a case in the Supreme Court of Ohio decides a matter and has not been overturned by a federal court, a more recent ruling by the Supreme Court of Ohio, or by a more recent statute directly on point (which means you shouldn't be looking at this case anyway) - then the case controls how this matter works throughout the state (generally speaking)

If the Supreme Court has never addressed the issue, then look to one of the Appellate Courts in Ohio. If a case in an Appelate Court in Ohio has addressed the issue, this case controls within the geographical area covered by this specific court's jurisdiction (which is 1 or more Ohio counties depending on which Appellate Court) - unless a federal court has overturned the decision, unless a more recent Ohio supreme court decision says something different (which means you wouldn't be looking at this appellate court decision anyway), or a more recent decision in the same appellate court decided something different, or there is a more recent statute enacted that governs this matter (which means you shouldn't be looking at the appellate court decision anyway).

If there is no case in the supreme court, or your appellate district, then you look at the Common Pleas Court of the Ohio county where the rental unit is located. If you find a case at the common pleas court, that answers your question, then there you go - unless there is a more recent decision that answers the question, or (insert all the other higher courts or statutes here, etc....)

Now, what if there is no case addressing your question in your appellate district, but the question is addressed in another appellate district in Ohio? You can use that decision as an argument that it should be the same way in your appellate district, but this is known as "persuasive authority" not "controlling authority". Persuasive authority may persuade a judge to rule the same way - but it does not require a judge to rule the same way.

And the discussion continues and gets more complicated as we go on.

SO - I recommend if you ever have questions about what you can or cannot do - you look for any kind of landlord tenant reference book published by a reputable publisher that is addressed specifically for PA and is a current publication; OR, consult a local attorney knowledgable in these matters....

While the information given by everyone in this post has been good information - there are some unanswered questions.

1) Is it the case that the lease is made out so all 3 residents are named in the lease?
2) Did all 3 sign the lease?
3) Does your lease have any clauses with regards to individual tenants or does it treat all tenants the same (e.g., does the lease provide for the ability of 1 named tenant to give notice to move out, or does the lease assume if someone gives notice they will all be moving out)?
4) How was the security deposit paid - was it paid by each individual tenant, or was it handed to you as 1 check or in cash?
5) What do you want to do as far as the couple that would remain when the 1 person moves out? Do you want to continue leasing to them or do you want them gone too?

These are all items that need to be addressed before specific information can be given.

In general I would guess, unless they have been problem tenants, you want the couple to continue leasing the unit - why create a vacancy if you don't need to?

I would also say, the price of the rent is for the unit, not for the persons. Therefore, the rental price of the unit should not change because 1 of 3 tenants move out. If the 2 remaining tenants want to stay, they need to pay the entire rent for the unit (a possible exception would be if they say they can't pay full price and you know you will have a hard time re-renting the place, then you might want to allow a reduced rent to keep the unit occupied and cash coming in....)

Legally speaking, you don't have to evict the 2 remaining tenants unless you want to (and if you want to you have to make sure the lease is structured in such a way that you can do so under these circumstances.)

How to handle the security deposit depends on what the lease says and how it was paid to you. If the security deposit was paid by a single check with the payor being someone other than the tenant moving out (and assuming the lease doesn't call for something else) - technically speaking the tenant moving out didn't pay you a security deposit. He would have to talk to the 3 remaining tenants about getting his deposit from them, and when they move out they talk to you about getting their deposit back.

If he did pay a deposit directly to you, what you do with the deposit 1st depends on how the state statutes say you can handle security deposits, then it depends on how the lease says to handle security deposits, then it depends on how you want to treat the security deposit.

I recommend you take advantage of this learning experience to list any and all items you did not take into account before renting to room-mates - then make sure all of your documents and procedures (and the state laws) allow you to operate how you want to operate....

Generally speaking, a tenant who breaks a lease early by moving out (let's assume proper notice was given and assume there are no damages to the unit) is liable to the landlord for the income the landlord loses by virtue of the tenant moving out early. The landlord must work to mitigate damages by re-renting the place as quickly as reasonably possible. The tenant is no longer liable for lost rent when the term of the original lease expires or when the landlord finds a new tenant - whichever is 1st. In this situation though, if the other tenants stay and pay the full rental price - the tenant is not liable for anything unless the lease has a clause specifically addressing this situation and the clause does not violate state statutes.

I think you mean to say Quitclaim Deed.

Cash buyers VERY MUCH do NOT want a Quitclaim Deed. Any buyer will need a Warranty Deed before purchasing a property (unless it is a family member, but even then that is iffy). Contact a title company to do the work for you and factor the costs of the titlework into your business budget.

It very well may depend on what PA law says. A very general rule of thumb is that if the tenant does something that causes the landlord to spend money, and the reason for the expense is due to more than standard wear and tear, the expense can be passed on to the tenant. I would suggest you might look at it as any other move-out - e.g., holes in the wall are more than standard wear and tear so deduct repair costs from deposit. Tenant leaves belongings in unit (do everything you can to ascertain whether they are comming back for property [if they still have time before the deadline], and document in detail all you do [in case they say you got rid of their family heirloom thingamabob]), any expense you incur to deal with those left behind belongings very well may be justification for charging against the security deposit.

Also, just a note - many landlords in OH do not know this, but OH law requires landlords to mail to the former tenant a written accounting of how the security deposit was spent (i.e., what % refunded and what was spent for what). If the landlord does not do this in 30 days, the tenant can sue the landlord for double the amount of anything that was improperly withheld.

In other words - always look at your state statutes governing landlord-tenant relationships because there may be some surprises in there. Also check any local ordinances if applicable....

Technically speaking you MAY be able to win a lawsuit. But how much money are you willing to spend to get the towing and impound fees reimbursed? How much time are you willing to take off work to have 1 day reimbursed?

As long as you really did have the permit displayed properly. There is a common law theory called Promissory Estoppel (don't know how applicable it is in VA) that could possibly allow you to win a lawsuit.

I don't tell you this to suggest you should go for it. After all, its not worth the time or the money, in my opinion at least, and I think you will quickly agree after consulting an attorney about the cost and time to pursue legal action....

Best hope is to write a very professional letter with enough details to communicate the situation and hope they decide to reimburse you for at least the out of pocket expenses.

It occured to me after I posted the 1st response, there may be 1 other long-shot option....

When did the title company 1st do a title search (the title company usually does its first search as a thorough search, then will perform a second search at the last minute (more or less) that checks for things that could have arisen since the first search was done. Even without a final title search and without a finalized title insurance policy, there is sometimes a sort of preliminary title insurance after the initial search is performed.

See if you (or the realtor) were issued any paperwork from the title company about any initial search - then see if the initial search had any guarantee on it. Preliminary title searches sometimes will state (I forget the exact language...) something to the effect that the search is guaranteed up to a certain amount. Again, I wouldn't hold my breath - but it is definitely worth checking out.

Speaking in practical terms - you are probably stuck with whatever happens.

Regardless of the legal "protections" you have (or don't have as the case may be...), the real question is - it sucks that you spent $1k out of pocket, but how much are you willing to pay and how much effort are you willing to expend to get that $1k back?

You see, even if the contract allows for liquidated damages, or allows for other damages (which is doubtful if it is a state standard real estate contract - but honestly I can't say without seeing it...); and, even if CA common law recognizes Promissory Estoppel - it all still comes back to - how much are you willing to spend to get that $1k back.

There are 2 legal requirements to "win" a lawsuit, and there is another purely practical requirement to "win" a lawsuit:
1) Legal Requirement - someone performed, or failed to perform, an act - and the performance, or failure to perform, such act allows you to sue that person;
2) Legal Requirement - The act, or failure to act, caused you damages that can be compensated; and,
3) Practical Requirement - the defendant actually has the means to pay the judgement, and taking into account the cost to get the judgment and collect the judgment, the amount of the judgment is worth the expense....

You will have 1 & 2 if the seller cannot deliver marketable title, but you will not have 3.

That depends -

In random order I see 3 main options:

1)
How comfortable are you the title to this property is good? If you have no doubts title is good, you could decide to forgoe the title insurance policy - BUT you would have to be willing to accept the consequences of paying to defend title should anyone make a claim against the title.

2)
Transfer the property to your LLC and purchase a title insurance policy. You won't have to pay all the typical closing costs because you don't need all the typical title agency services. All you need is title insurance - however, to issue a policy the title agency will at a minimum have to do a title search. They will probably require that you also have them draft and file the warranty deed - so you will have to pay the fees for those things as well.

3)
Leave everything status quo.