Question about a tenant breaking 1 year lease agreement AND wants his deposit back!

[rika60607 215]

I am a bit put off by your language of "pay $ to the tenant" - you would be returning his deposit that you were supposed to keep in an interest bearing account for him. It's his money, you know. These money were to insure against damage to the apartment and/or early move out. So look into the lease you two have signed.

I would suggest two options to the tenant:

(1) Sublease the apt

(2) He breaks the lease and loses the security deposit, as it is reasonable to expect that you will need a few weeks to find a new tenant.

Let us know how it goes

[^_^ 5,021]

option # 2

[Deputy Purple 1,294]

Here is how it should work:

He is responsible for rent for the duration of the lease BUT...

You are required by law to mitigate your damages, in this case get a new tenant in as soon as possible, so...

When he moves out, do a walk-through for damages. Deduct any reasonable damages from the deposit. Follow the laws of your state regarding deposit & damages (some states require written statement within 30 days of move-out).

In your letter to tenant regarding the deposit & damages (if there are any) note the "Current Remaining balance of his deposit" then inform him that he is liable for rent on the apartment until you get a new tenant or the end of the lease whichever comes first.

Finally state that once the apartment is rented again you will figure how much rent he owes you and deduct that from the remaining deposit. Tell him if the deposit is greater than the rent he owes you will return his balance. Also explain that if he owes more rent than the deposit will cover you will send him a Final statement and expect payment within 30 days or you will pursue legal collection remedies.

Of course if he ends up owing you a small amount you can just forgive it but you should send that final statement regardless of which way the dollar balances.

[웃 910]

Went to snap some pictures of the house today. They've been great tenants, made a few additions (a storm door, painting, doorbell, ceiling fan) while they were there. Decorated the place amazing for the small space (<900 sq. ft.).

Anyways, they gave me a letter. It basically says that they will be leaving no later than the 12th. Since the rent is due on the 8th they will owe for 4 days which is $99, and they want it subtracted from the "security deposit" of $825, with the balance ($726) returned to them! They list that they've been great tenants and made some repairs, etc. Then they say for an additional $200 they will leave the stove, fridge, washer/dryer!

They are seeing their perspective very clear.

But they don't seem to understand a few points:

1) It was not an $825 security deposit. It was the first months rent ($825) and the last months rent ($825) paid in advance.

2) They broke the lease agreement

3) 4 months left until February 8th which is when their lease expires (that's over $2,000 left in payments)

4) The inconvenience of finding a new tenant is not explainable in words. I will have to post Craigslist ads 5 times a day, receive 20 phone calls a day with questions, meet people at the house (25 minutes away) multiple times a day, sometimes they won't show up, etc. On top of this during the next 2 weeks I will have to work around my schedule and the tenants schedule which is going to be a huge problem.

#######!

[Kathryn41 3,205]

Was he told it was first months rent and last months rent or first months rent and a security deposit? There is a big difference. If it is first and last month, then the amount goes to the rent until you find a tenant to replace him. If it is a damage deposit, then Bob4Anna had the right approach. If he was told it was a security/damage deposit, though, you can't retroactively change it to last months rent. What does it say on the lease?

[lostinblue 1,989]

We have had people tell us to use security deposit for the last months rent more times than you can count. You can sue in court maybe small claims but if they won't pay you still are screwed. Most of the time it is be thankful they were a good tenant. The place was left in good shape,All we need to do is shampoo the rugs and paint. We count our blessings.

[Fandango 1,439]

I wanna know who moved this, lol

[웃 910]

UPDATE:

My dad is the one who has been familiar with the whole process (he has 5 rental houses). He's been in charge of the paperwork and collecting, etc. Long story short his lease agreement was unprofessional trash! He left certain things blank, his copy was not signed by the tenants, it wasn't clear at all.

So basically the deal we worked out is when the people leave next week we will give them $500 but we will keep the fridge, stove, washer/dryer.

Because of these tenants we were actually able to find new tenants already and they paid the first $825 and they will pay the second $825 when they move in on the 19th. The old tenants kept the place in mint condition and fixed a lot of things up. Here are some pics:

Here is the main living room after being remodeled but before we found the first tenants:

They did amazing for an 850 square foot house. Here is the condition I bought the house in:

Master bedroom:

Living Room:

Kitchen:

On a side note, the new tenants seem pretty good. They are two ladies (gf and gf). What I found fascinating is the lady that works at Starbucks seems to be doing very well. Her YTD was around $42,000....she gets sick pay, vacation pay, $4,000 bonus, stock options, etc.). Very nice for working at Starbucks, I believe she is on salary. Didn't know they made so much at Starbucks! Bad news is I doubt they stay there for more than 2 years. With their combined income they could easily afford a 30 year mortgage and get something amazing and actually own it! Here was the lease agreement I wrote up which basically states it is a 1 year lease and that the $825 is non-refundable, applied to last months rent:

1 YEAR LEASE AGREEMENT

November 19^th,2010 to November 19^th, 2011

Monthly rent = $825

Property Address: ____________

Landlord: ________

Tenant(s):______________________

_______________________

A. Tenant(s) to pay 2 monthsrent in advance ($825 + $825). These payments are for the first andlast months rent. This IS NOT a deposit that you get back at the endof the lease, it is a payment for the first month and a credit(payment) for the last month of rent.

B. If tenant(s) do not wishto renew or extend the lease agreement then tenant(s) will notifylandlord roughly 45 days in advance of lease termination. This leaseis due to expire on November 19^th, 2011, thereforetenant(s) will notify landlord early October 2011 (before October19^th payment is due) of plans to move out.

1. If tenant(s) do not wish to renew the lease agreement then there is no payment due on October 19^th, 2011. This payment was paid in advance and in this case is being applied to the last months rent.
2. If tenant(s) do wish to renew the lease agreement then payment is due on October 19^th, 2011, and a new lease agreement will be completed. In the case of a lease renewal, the last months credit is still there, but won't be applied until the second lease agreement expires.

1. Landlord pays for maintenance issues (leaking roofs, heating, etc.). Tenant(s) pay for all other damages to home (broken windows, doors, appliances, holes in walls, etc.).

E. Tenant(s) pay forutilities.

[TBoneTX 43,048]

Congratulations, si man!

[Saddle Bronc 124]

Give tenant a bill for the prorated-remainder (roughly 4 months) rent + cleaning/prep charges (if he leaves it close-to-immaculate, take as $25; if he leaves it looking like a tip, exact cleaning-cost including rental of equipments), then deduct the deposit from that!

tip=landfill

[luckytxn 2,263]

Most awesome tenant you had. I definitely would have cut them a break. I also in my lease agreement a certain amount that the tenant has to pay if they call and I or someone has to come out and do work on the house. The amount I specify is a hundred dollars but it can be different in other parts of the country I am sure.

Congrats on the positive outcome. My last two tenants I had who were also gf and gf were a pain in the azz but they are now asking to buy from me at a decent price from me so alls well that ends well.

[Fandango 1,439]

I'm no expert in tenancy laws in your state, but here? that lease you drew up is garbage. No offense.

Having 'etc' listed is really quite vague, also, btw.

[Fandango 1,439]

Most awesome tenant you had. I definitely would have cut them a break. I also in my lease agreement a certain amount that the tenant has to pay if they call and I or someone has to come out and do work on the house. The amount I specify is a hundred dollars but it can be different in other parts of the country I am sure.

Congrats on the positive outcome. My last two tenants I had who were also gf and gf were a pain in the azz but they are now asking to buy from me at a decent price from me so alls well that ends well.

so, the sink breaks, and the tenants agree to pay $100 to fix your house???

[Gary and Alla 3,694]

Option 3 may cost you mor than it is worth and what happens when you get a judgement. No deposit returna d get the place back on the market ASAP.

[웃 910]

I'm no expert in tenancy laws in your state, but here? that lease you drew up is garbage. No offense.

Having 'etc' listed is really quite vague, also, btw.

I'm not sure your definition of garbage but for me it is written to perfection. It states everything it needs to state clearly and concisely. No more words were needed.

The goal was to make it clear that it is a 1 year lease (the prior tenants thought they were on a month to month) and to explain that the money is not a "deposit" but a credit for the first and last months rent.

So take your garbage piss poor crappy attitude to another site, it's not wanted here.