Tenants want to break lease early and is pregnant

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hand
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Re: Tenants want to break lease early and is pregnant

Post by hand »

As noted by randomguy above, best answer is likely the intersection of what is contractually & legally required and what you and the tenants choose to additionally negotiate based on current situation.

If it were me, I'd go for the win-win; tenants want to move out early, you want to raise rents, minimize cost to rehab the unit and minimize vacant time.

This can be done nicely, but important to let the tenants know that starting point for additional negotiations isn't what they want, but what was agreed contractually.

I'd congratulate the tenants on the pregnancy, perhaps send them a bottle of wine or other appropriate small gift, explain that per the contract they're responsible for the costs until end of the lease term, but that you're not interested in enforcing if they are willing to make a best effort attempt to help you re-rent (keeping place clean, allowing a couple of showings to new tenants before they move out.)

You take a small risk of 2 months of vacancy under this approach offset hope of minimal cleanup after the tenants leave and possibility of minimal vacancy and you can feel good about how you treated the tenants.

Assuming you do get a renter, you'll want to put a formal move-out agreement in place with the existing couple detailing a date and penalty for failure since you don't want to be in the position where you have current tenants with a lease for future months AND a new tenant expecting to move in. What happens if the current tenants aren't timely moving their stuff out?
david
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Re: Tenants want to break lease early and is pregnant

Post by david »

randomguy wrote: Thu Feb 08, 2018 3:52 pm
david wrote: Thu Feb 08, 2018 3:37 pm
lomarica01 wrote: Thu Feb 08, 2018 3:32 pm Our great tenants are having their first child and suddenly want to leave 2 months early of their second 1 year lease. Just wondering if I should take any actions such as keeping part of the deposit, pet deposit or something or just let it go and wish the young kids well. I know some might say you should not be a landlord if you can't evict someone on Christmas eve, but I think that is a bit much. One thought is I should be able to raise the rent, so the sooner they leave the sooner I can raise the rent. The rental is paid for and I think I know what my wife will say when I tell her this news.
Any Advice is appreciated.
You may want to try and rent the space, and if you can rent it give them back their deposit. If you can't, keep the security deposit as your damages from having the place remain empty. (In some places, this is a legal requirement on the landlord, called mitigating damages.)

No reason to be heartless, no reason to be a pushover.
And in some places doing that is a violation of rental laws and leaves the landlord liable for damages. As always check your local laws.

How much notice are they giving you (i.e. they will be out in 2 weeks versus 2 months)? If you are getting 30+ days, I would let it go and move on to finding a new tenant.
What jurisdiction would call mitigating damages a violation?
michaeljc70
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Re: Tenants want to break lease early and is pregnant

Post by michaeljc70 »

If they gave you ample notice and you are able to rent it I would not penalize them.

When I bought my first place, it was not really possible to time finding and closing on a place with my lease. My landlord had me pay for an ad to advertise it. He handled all the calls/screening and gave me my deposit back.
DVMResident
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Re: Tenants want to break lease early and is pregnant

Post by DVMResident »

Personally, I've let good tenant out of year leases a few months early with the following process:

(1) Tell them I appreciate their time renting with me and I would like to work together to work something out.
(2) Request an inspection (really, not a request, but it's nice to ask). If things are good in condition, thank them, and say "since the place is in good shape, and if it stays in good shape, I'm okay with terminating the lease early." Realize you maybe recorded. So don't promise anything.
(3) Request to have prospective future tenants tour before the current tenants are fully moved out. This helps to minimize the vacancy time and minimize the time the current tenants are responsible for the active lease.

Always worked out well for me. My tenants tend to leave on good terms...and my units in good shape!

Pay attention to your state laws in addition to the lease.
Grt2bOutdoors
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Re: Tenants want to break lease early and is pregnant

Post by Grt2bOutdoors »

hand wrote: Fri Feb 09, 2018 10:22 am As noted by randomguy above, best answer is likely the intersection of what is contractually & legally required and what you and the tenants choose to additionally negotiate based on current situation.

If it were me, I'd go for the win-win; tenants want to move out early, you want to raise rents, minimize cost to rehab the unit and minimize vacant time.


I'd congratulate the tenants on the pregnancy, perhaps send them a bottle of wine or other appropriate small gift, explain that per the contract they're responsible for the costs until end of the lease term, but that you're not interested in enforcing if they are willing to make a best effort attempt to help you re-rent (keeping place clean, allowing a couple of showings to new tenants before they move out.)

:o
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Re: Tenants want to break lease early and is pregnant

Post by itstoomuch »

DVMresident wrote:Always worked out well for me. My tenants tend to leave on good terms...and my units in good shape
:beer
+1
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LiveSimple
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Re: Tenants want to break lease early and is pregnant

Post by LiveSimple »

Let them go, wish them well, wellness will come to you as well in multiple folds.
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Re: Tenants want to break lease early and is pregnant

Post by White Coat Investor »

I'd just go by the contract. They've already decided it was worth it to them to pay that price.

My wife wouldn't let me though, that's one of many reasons we no longer own/manage our own rental properties. We're too nice to get a good return doing that, so we invest differently.
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noco-hawkeye
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Re: Tenants want to break lease early and is pregnant

Post by noco-hawkeye »

TallBoy29er wrote: Thu Feb 08, 2018 4:19 pm What would you want done for you, if you were in their shoes? What feels right?
^ Fantastic answer.
randomguy
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Re: Tenants want to break lease early and is pregnant

Post by randomguy »

david wrote: Fri Feb 09, 2018 2:36 pm
randomguy wrote: Thu Feb 08, 2018 3:52 pm
david wrote: Thu Feb 08, 2018 3:37 pm
lomarica01 wrote: Thu Feb 08, 2018 3:32 pm Our great tenants are having their first child and suddenly want to leave 2 months early of their second 1 year lease. Just wondering if I should take any actions such as keeping part of the deposit, pet deposit or something or just let it go and wish the young kids well. I know some might say you should not be a landlord if you can't evict someone on Christmas eve, but I think that is a bit much. One thought is I should be able to raise the rent, so the sooner they leave the sooner I can raise the rent. The rental is paid for and I think I know what my wife will say when I tell her this news.
Any Advice is appreciated.
You may want to try and rent the space, and if you can rent it give them back their deposit. If you can't, keep the security deposit as your damages from having the place remain empty. (In some places, this is a legal requirement on the landlord, called mitigating damages.)

No reason to be heartless, no reason to be a pushover.
And in some places doing that is a violation of rental laws and leaves the landlord liable for damages. As always check your local laws.

How much notice are they giving you (i.e. they will be out in 2 weeks versus 2 months)? If you are getting 30+ days, I would let it go and move on to finding a new tenant.
What jurisdiction would call mitigating damages a violation?
Pretty much every single rental agreement I have signed has specifically stated that. Security deposits are to be kept in escrow and used for damage to the unit. They can not be used for unpaid rent. I have no clue if that was a CA law or SF/San Mateo county law. Or if that contract was even legal:). I know other states/county have different laws and some of them allow you to specify that security deposits can be used for rent. Hence the suggestion that you verify that what you are doing is legal where you live. I wouldn't take advice on the next about local legal manners:)
CurlyDave
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Re: Tenants want to break lease early and is pregnant

Post by CurlyDave »

lomarica01 wrote: Thu Feb 08, 2018 4:02 pm Thanks for all the responses. Interesting there was no clear concensus but I will review the lease and go from there
Before you do anything review your state laws on this issue also.

Anyone can write anything they want into a lease, but state & local law always supersedes the lease terms.

Personally I am in the camp of just let them go. Charge for repairs, cleaning, paint touch up, etc. but no penalty for breaking lease.

I never write leases for any of our units. I write month-to-month rental agreements. Almost anywhere in the US a tenant can break a lease by just stopping payments, and the landlord is obligated to try to re-rent the unit. A lease protects tenants from a rent increase, but provides no practical protection for a landlord.

In my state, I have 31 days to account for and return the deposit. I try to do this as fast as possible. If the unit is in good condition, I have to touch up paint and clean carpets. I explain this to tenants, and most will be very cooperative since they can get their deposit back sooner. If the unit needs cleaning or re-painting due to damage, I charge for loss of use.

Rent to new tenants at a higher rate and move on.
Goal33
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Re: Tenants want to break lease early and is pregnant

Post by Goal33 »

Being the tenant in this situation, I helped my landlord find a tenant to pay higher rent and leave no vacancy. It was a win-win since he was willing to work with me.

If he wasn't willing to work with me, I'd let him try to collect. He would probably win a case, rightfully so, but seems like a lot of wasted energy given he could have put that effort towards a new renter.

I guess it's also hard for me to relate because being in the bay area, there's always another renter to take your spot.
anonenigma
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Re: Tenants want to break lease early and is pregnant

Post by anonenigma »

dm200 wrote: Thu Feb 08, 2018 4:25 pm When I was a renter (many years ago), it was common that, after the first year, renters would go on a month to month lease.
That's how my rental works - one year rental followed by month-to-month tenancy under the terms of the original lease.

I thought it was creepy when the large complex where my parents lived made them sign a new one-year lease each year. It became a hassle to move my mother, then in her late 90s, to a place where she could get the care she needed during the final months of her life. She had lived in the building for more than a quarter of a century but, according to management, was mid-lease. Fortunately, they relented after receiving a letter from her doctor.
Joylush
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Re: Tenants want to break lease early and is pregnant

Post by Joylush »

Great tenants don't break their lease. By law you must attempt to mitigate their damages (try to find a replacement tenant as soon as possible but until you do they are responsible for the rent).

In the future include an "early termination fee" for those who opt to break their legal contract. My state permits an amount equal or less than two months rent to break a lease. My fee is equal to 1/2 month's rent. I only want enough to help make me whole again.

I wonder if they opted not to make their car payment because they're pregnant. Good tenants honor their commitments.
mouses
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Re: Tenants want to break lease early and is pregnant

Post by mouses »

It's not clear to me why pregnancy has anything to do with this. If she is so far along that they need a new place with fewer steps or more room etc., then they have known about this for some time.

However, since it's only two months, I would make a trade. You forego the two months rent if they leave the place in immaculate condition, which saves you the cleaning costs. You still take a financial hit, but karma.
denovo
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Re: Tenants want to break lease early and is pregnant

Post by denovo »

randomguy wrote: Fri Feb 09, 2018 11:38 pm
david wrote: Fri Feb 09, 2018 2:36 pm
randomguy wrote: Thu Feb 08, 2018 3:52 pm
david wrote: Thu Feb 08, 2018 3:37 pm
lomarica01 wrote: Thu Feb 08, 2018 3:32 pm Our great tenants are having their first child and suddenly want to leave 2 months early of their second 1 year lease. Just wondering if I should take any actions such as keeping part of the deposit, pet deposit or something or just let it go and wish the young kids well. I know some might say you should not be a landlord if you can't evict someone on Christmas eve, but I think that is a bit much. One thought is I should be able to raise the rent, so the sooner they leave the sooner I can raise the rent. The rental is paid for and I think I know what my wife will say when I tell her this news.
Any Advice is appreciated.
You may want to try and rent the space, and if you can rent it give them back their deposit. If you can't, keep the security deposit as your damages from having the place remain empty. (In some places, this is a legal requirement on the landlord, called mitigating damages.)

No reason to be heartless, no reason to be a pushover.
And in some places doing that is a violation of rental laws and leaves the landlord liable for damages. As always check your local laws.

How much notice are they giving you (i.e. they will be out in 2 weeks versus 2 months)? If you are getting 30+ days, I would let it go and move on to finding a new tenant.
What jurisdiction would call mitigating damages a violation?
Pretty much every single rental agreement I have signed has specifically stated that. Security deposits are to be kept in escrow and used for damage to the unit. They can not be used for unpaid rent. I have no clue if that was a CA law or SF/San Mateo county law. Or if that contract was even legal:). I know other states/county have different laws and some of them allow you to specify that security deposits can be used for rent. Hence the suggestion that you verify that what you are doing is legal where you live. I wouldn't take advice on the next about local legal manners:)
Randomguy,

I am certain you misread those clauses. That is to prevent tenants from demanding that security deposit be applied to rent if they don't pay one month or another. When a unit is vacated, the landlord is free to deduct unpaid rent or damages against the security deposit.
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Church Lady
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Re: Tenants want to break lease early and is pregnant

Post by Church Lady »

The last lease I signed explicitly said I was liable for the entire term of the lease, even if I died! That's right; they were going to try to collect rent from my corpse if I expired! However, the rental office told me that if they could rent out the unit, they would only want rent for the time it was vacant, plus one month as a penalty. They also said if the apartment was sold (which happened with shocking regularity), they couldn't promise the next owners would relent on collecting the full lease term.

One month's rent as an early termination fee seems fair to me.

I agree with other posters that say you have to look into local laws regarding early termination of lease.
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cudds
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Re: Tenants want to break lease early and is pregnant

Post by cudds »

Be a good guy, let them walk and try rent it out to fill the void.
mrgeeze
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Re: Tenants want to break lease early and is pregnant

Post by mrgeeze »

knpstr wrote: Thu Feb 08, 2018 4:05 pm You can give charity to anyone. If you want to "let them leave" you can. I wouldn't give nor promise full deposit before they leave.

I would wait till the leave, try to re-rent.
If the place is spotless and re-rented within say 3 weeks, keep deposit amount equivalent of 3 weeks lost rent. If you don't need the money, would like to give them a gift, let them leave with a full deposit. If you do so, I'm sure you know they won't go around singing your praises of great generosity to strangers.
Some thing along these lines seems reasonable and fair.
Make no concrete decisions till the place is re-rented.
You can then reflect on the effort and expense required to get it back into income producing state.
Take what is reasonable for expenses and perhaps even some annoyance allowance.

Predicting the future is where we often get into trouble.
BrooklynInvest
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Re: Tenants want to break lease early and is pregnant

Post by BrooklynInvest »

Laws may differ by state. In NY my interpretation is they are liable for the remaining lease BUT you are obliged to make a good faith effort to find a new tenant to take over with a new lease. No double dipping.

In practice I've said to (nice) tenants - "You're liable, but I'm gonna do everything I can to find a new tenant quickly. I'm gonna need you to make the apartment available and presentable whenever the realtor needs it and let's see what we can do." I call the realtor right away, discuss what we think is fair value, usually a few bucks more than prior lease, and be clear with him that I need to do this fairly quickly. A good realtor's gonna understand and want the repeat listing.

I don't have any problem finding new tenants in my area and I figure I'd have to find new tenants anyway so there's really no extra work/expense for me, just doing the work a bit earlier. C'est la vie.

Plus, if I can help folks that're in a bind, seems like the right thing to do.
Da5id
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Re: Tenants want to break lease early and is pregnant

Post by Da5id »

People don't seem to want to treat this as a business. I'm glad I'm not a landlord, as I'd probably be a softie too.

That said, this is first and foremost a business relationship. The lease was a contract binding the tenants, but it also gave them something of value. Namely, that the landlord, who was also bound by the contract, couldn't without cause chuck them out if he found people who would pay more or if he wanted a place for a relative to live now or whatever. I think it is a bit odd that there is an expectation that this business relationship is all that different than other ones where there is a contractual arrangement. And that the contract is considered to be only binding on the landlord.

I'd say as a landlord you are entitled to the rent. If the place sits vacant for 2 months, you are out of pocket for the mortgage and expenses because the tenants, nice folks though they are, have chosen to not honor a contract. But you should do your honest best to rent it out (or get a sublet if feasible), and if you do, of course not charge them anything even if you might be by law/contract able to (not a landlord, don't know rules, and they vary anyway). Only obvious case I see to let them just walk is if you need to renovate anyway and having it empty 2 months fits your agenda. In that case, I'd say it is wrong to charge them given you aren't trying to have the place filled anyway.
cherijoh
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Re: Tenants want to break lease early and is pregnant

Post by cherijoh »

lomarica01 wrote: Thu Feb 08, 2018 3:32 pm Our great tenants are having their first child and suddenly want to leave 2 months early of their second 1 year lease. Just wondering if I should take any actions such as keeping part of the deposit, pet deposit or something or just let it go and wish the young kids well. I know some might say you should not be a landlord if you can't evict someone on Christmas eve, but I think that is a bit much. One thought is I should be able to raise the rent, so the sooner they leave the sooner I can raise the rent. The rental is paid for and I think I know what my wife will say when I tell her this news.
Any Advice is appreciated.
Had your tenants asked to go month-to-month on their lease after the end of the first 1-year lease expired would you have agreed to do so? If so, then you would have been in this same situation. Or they could have decided to not renew the lease in the first place - you still would have had a turnover.

If you are planning to have the unit painted, I would try and arrange to get the quotes while your tenants are still in the unit. They should be amenable to that if you are letting them out of their lease.
Atgard
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Re: Tenants want to break lease early and is pregnant

Post by Atgard »

While I think people here are trying to help you, be aware nobody else has seen the lease and many people may not know landlord-tenant law.

This is not legal advice, but in at least some states it is not legal to charge them rent even after they move out and you also re-rent it to someone else. In other words, your lease may let you collect rent up until the end of the lease, but only up to the point you find new tenants (which you have an obligation to try to do, called mitigation), so in general you can NOT double-dip no matter what, so people saying to be "nice" by offering that are really just saying to follow your minimum obligation under the law. (This is not legal advice, check laws in your own state, etc.)

Also note in most cases you can NOT take funds from a security deposit to cover that, they have their own rules and are to be used to cover damages, not early move-out. Again, check your lease and the laws in your state.

So your choice is basically, (a) let them break the lease early, probably with some sort of decent notice (2 weeks-1 month) and hopefully re-rent it during that time, they will probably be helpful in showing the place to tenants, leave it in good shape, etc. OR (b) tell them the lease is the lease, too bad so sad, and possibly deal with lots of calls to unclog toilets at 3AM and leaving the place a mess and not being flexible on showing the unit.

And that is just from a pure business standpoint. On top of that, you seem like a decent human being who wants to do the right thing and help out some good tenants who are expanding their family. I don't see any harm in letting them out a month early, you may end up ahead by raising the rent a month earlier than you planned to.
fasteddie911
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Re: Tenants want to break lease early and is pregnant

Post by fasteddie911 »

The post is a little confusing and not sure what the complication is. What does the contract say? It does seems odd that you aren't aware of your contract language or even thought to look there first. You discuss holding onto the security/pet deposit, but unless that's part of the contract, that seems like a spiteful move. Every lease contract I've seen gives details regarding breaking a lease, typically X days notice and/or Y cost. As long as they followed the rules of the contract and didn't break any local laws you may have, then there's nothing you can do. Maybe if you could provide contract details more help can be provided
randomguy
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Re: Tenants want to break lease early and is pregnant

Post by randomguy »

denovo wrote: Sat Feb 10, 2018 7:04 am

Randomguy,

I am certain you misread those clauses. That is to prevent tenants from demanding that security deposit be applied to rent if they don't pay one month or another. When a unit is vacated, the landlord is free to deduct unpaid rent or damages against the security deposit.
A quick Google sheet about. 50/50 split. Maybe half the people are wrong. Or maybe they are posting their local experience and not realizing it isn't universal. As always when doing legal stuff, consult a compentent pro
randomguy
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Re: Tenants want to break lease early and is pregnant

Post by randomguy »

Da5id wrote: Sat Feb 10, 2018 9:17 am People don't seem to want to treat this as a business. I'm glad I'm not a landlord, as I'd probably be a softie too.

That said, this is first and foremost a business relationship. The lease was a contract binding the tenants, but it also gave them something of value. Namely, that the landlord, who was also bound by the contract, couldn't without cause chuck them out if he found people who would pay more or if he wanted a place for a relative to live now or whatever. I think it is a bit odd that there is an expectation that this business relationship is all that different than other ones where there is a contractual arrangement. And that the contract is considered to be only binding on the landlord.

I'd say as a landlord you are entitled to the rent. If the place sits vacant for 2 months, you are out of pocket for the mortgage and expenses because the tenants, nice folks though they are, have chosen to not honor a contract. But you should do your honest best to rent it out (or get a sublet if feasible), and if you do, of course not charge them anything even if you might be by law/contract able to (not a landlord, don't know rules, and they vary anyway). Only obvious case I see to let them just walk is if you need to renovate anyway and having it empty 2 months fits your agenda. In that case, I'd say it is wrong to charge them given you aren't trying to have the place filled anyway.
It isn't being a softie. The landlord gets the same money either way. The question is do they get it from a new tenant or the old one. There is some unknowns with vacancy but that can go either way.
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8foot7
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Re: Tenants want to break lease early and is pregnant

Post by 8foot7 »

I don't understand these people saying that in most cases you can't use the security deposit to cover unpaid rent. In CA, NY, NC and the dozen other states I just looked up, that's one of the expressly permissible purposes of the landlord retaining the security deposit.
Gronnie
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Re: Tenants want to break lease early and is pregnant

Post by Gronnie »

When my wife and I were tenants we found a house and closed on it about 3 months before our lease was up. We moved out of the apartment and into the house, intending to pay the remaining three months of the lease in full and on time. I'd like to think that we had been excellent tenants the ~3 years we had lived there, always paying on time and only ever contacting the landlord for emergencies like the furnace going out in the middle of the winter.

The landlord figured out we had moved out and called us to tell us that we had been great tenants and that he was waiving the rest of the lease for us (something we had no intention of asking him to do). My wife works as a nurse, and whenever new grads come to town to work and are looking for a place to live, guess who we refer them to? Doing nice things has a way of working out in the end!
Katietsu
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Re: Tenants want to break lease early and is pregnant

Post by Katietsu »

Da5id wrote: Sat Feb 10, 2018 9:17 am People don't seem to want to treat this as a business. I'm glad I'm not a landlord, as I'd probably be a softie....there is an expectation that this business relationship is all that different than other ones where there is a contractual arrangement.
I think most of the responses are on solid business footing. The tenants are in control of the property. Good tenants are unlikely to trash the place regardless of the landlord’s decision. (But not so good tenants can certainly cause more work than 2 months of rent.) But grateful tenants’ can be accommodating about allowing the place to be shown without required notice, about keeping the unit in show ready condition, about leaving the unit in move in condition and about telling potential tenants’ what a great landlord they had. So this is a sound business practice.
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Re: Tenants want to break lease early and is pregnant

Post by Sandtrap »

lomarica01 wrote: Thu Feb 08, 2018 3:32 pm Our great tenants are having their first child and suddenly want to leave 2 months early of their second 1 year lease. Just wondering if I should take any actions such as keeping part of the deposit, pet deposit or something or just let it go and wish the young kids well. I know some might say you should not be a landlord if you can't evict someone on Christmas eve, but I think that is a bit much. One thought is I should be able to raise the rent, so the sooner they leave the sooner I can raise the rent. The rental is paid for and I think I know what my wife will say when I tell her this news.
Any Advice is appreciated.
A landlord, if not most all business folks, are in a position to be benevolent.
That's what separates landlords and slumlords. IMHO.
I would let them off the lease agreement. Do the inventory checkout. Charge as needed. You would be out the 2 months rent but be able to refurb and clean and then turnaround at a higher rent. You are not "evicting" them because that is what you do when folks "do not" want to leave.
They have been "great tenants". Reward them for that tenancy, "pay it forward" and move on.
Positive "word of mouth" and referral advertising is a great thing to have.
I have had apartment buildings that averaged 100% occupancy and have never had to advertise when I had a vacancy. The old saying, "what goes around comes around", works.
And, these positive experiences certainly can make up for the lousy experiences that a landlord can have.
j :D
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Archimedes
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Re: Tenants want to break lease early and is pregnant

Post by Archimedes »

Collaboration to meet the needs of both parties often works out quite well. The tenant would like out of the lease early, and to save money on the rent for those remaining months of the lease term if possible. The landlord would like the unit to be rented and not to sit vacant to avoid losing rent money. The landlord would further prefer not to incur costs for extra turnover prior to the end of the lease.

If the current tenants can help you out with showing the unit, perhaps with referring a highly qualified new tenant, and can keep the place clean, then everyone wins. That is what I have done in the past when a tenant breaks their lease. The tenants are responsible for rent if the unit is empty, and for any extra costs related to turnover, but if we work together for everyone's mutual benefit then these costs can be minimal to none.
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Re: Tenants want to break lease early and is pregnant

Post by Abe »

I don't think some people posting on this thread have had much experience dealing with tenants. I have owned rental property for over 50 years. In my experience, a lease is more beneficial to the tenant than the landlord. With a lease, the tenant locks in the rent rate for the term of the lease. If the tenant moves before the end of the lease, in most cases I just let them go because if I sue them, I just get a judgement which gives me the right to garnishee wages, bank accounts, etc, but in most cases it's not worth the cost and trouble. A lot of times the tenant will quit paying the rent and it may take me 2 or 3 months to get them out. Many times they will trash the house which will cost me several thousand dollars to get the house back ready to rent plus more time for repairs so more money lost for me. If I do get a "good" tenant, who wants to break the lease, I will usually try to work something out agreeable to both parties, but even then I still lose money in most cases. It makes it hard to be "benevolent". The more benevolent I am, the more I lose. This is just the way it is.
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Re: Tenants want to break lease early and is pregnant

Post by Lauretta »

Abe wrote: Sat Feb 10, 2018 11:29 am I don't think some people posting on this thread have had much experience dealing with tenants. I have owned rental property for over 50 years. In my experience, a lease is more beneficial to the tenant than the landlord. With a lease, the tenant locks in the rent rate for the term of the lease. If the tenant moves before the end of the lease, in most cases I just let them go because if I sue them, I just get a judgement which gives me the right to garnishee wages, bank accounts, etc, but in most cases it's not worth the cost and trouble. A lot of times the tenant will quit paying the rent and it may take me 2 or 3 months to get them out. Many times they will trash the house which will cost me several thousand dollars to get the house back ready to rent plus more time for repairs so more money lost for me. If I do get a "good" tenant, who wants to break the lease, I will usually try to work something out agreeable to both parties, but even then I still lose money in most cases. It makes it hard to be "benevolent". The more benevolent I am, the more I lose. This is just the way it is.
I agree with most of what you say; this reflects my experience except that in Europe it might take you one year or more to evict them even if they don't pay the rent - and you probably will never be able to recover the lost rent.
So the best thing IMO is first to try to find good tenants and then to try to always be on good terms with them, because - leaving aside the human aspect - you'll be better off if you don't have to sue them.
But then why do you say 'The more benevolent I am, the more I lose.'? I find that if I am accomodating and try to avoid conflict, it works out better for me too.
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Re: Tenants want to break lease early and is pregnant

Post by Abe »

Lauretta wrote: Sat Feb 10, 2018 1:05 pm
Abe wrote: Sat Feb 10, 2018 11:29 am I don't think some people posting on this thread have had much experience dealing with tenants. I have owned rental property for over 50 years. In my experience, a lease is more beneficial to the tenant than the landlord. With a lease, the tenant locks in the rent rate for the term of the lease. If the tenant moves before the end of the lease, in most cases I just let them go because if I sue them, I just get a judgement which gives me the right to garnishee wages, bank accounts, etc, but in most cases it's not worth the cost and trouble. A lot of times the tenant will quit paying the rent and it may take me 2 or 3 months to get them out. Many times they will trash the house which will cost me several thousand dollars to get the house back ready to rent plus more time for repairs so more money lost for me. If I do get a "good" tenant, who wants to break the lease, I will usually try to work something out agreeable to both parties, but even then I still lose money in most cases. It makes it hard to be "benevolent". The more benevolent I am, the more I lose. This is just the way it is.
I agree with most of what you say; this reflects my experience except that in Europe it might take you one year or more to evict them even if they don't pay the rent - and you probably will never be able to recover the lost rent.
So the best thing IMO is first to try to find good tenants and then to try to always be on good terms with them, because - leaving aside the human aspect - you'll be better off if you don't have to sue them.
But then why do you say 'The more benevolent I am, the more I lose.'? I find that if I am accomodating and try to avoid conflict, it works out better for me too.
I try to avoid conflict too, but I have found that I can't be too lenient either because some tenants will take advantage. If I give them an inch, they take a mile. But each situation is different. I have this one house now that I let the tenant get 3 months behind. They still couldn't or wouldn't pay the rent and it took me 2 more months to get them out. When I finally did get them out, the house was trashed. So that's what I mean when I say the more benevolent I am, the more I lose.
Edited to add: As I said earlier, I don't see much benefit to the landlord to have a lease. If the landlord is not going to enforce the terms of the lease, he might as well just rent on a month to month basis.
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Re: Tenants want to break lease early and is pregnant

Post by denovo »

Abe wrote: Sat Feb 10, 2018 11:29 am I don't think some people posting on this thread have had much experience dealing with tenants.
+1

I suspect the answers would be way different if asked on any landlord forum.
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Re: Tenants want to break lease early and is pregnant

Post by dm200 »

Edited to add: As I said earlier, I don't see much benefit to the landlord to have a lease. If the landlord is not going to enforce the terms of the lease, he might as well just rent on a month to month basis.
Never been a landlord, but a tenant many times.

In my opinion, most leases are written for the benefit of the landlord.

Contrary to what is implied (or stated here), when a tenant goes month to month (as was common in places I rented) after the initial term of the lease, the renter/tenant still had a lease and was subject to the terms of the lease. A lease is still in effect - but the terms are month to month and the obligations and protections of the lease still apply to BOTH parties.
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Re: Tenants want to break lease early and is pregnant

Post by randomguy »

Abe wrote: Sat Feb 10, 2018 1:44 pm

I try to avoid conflict too, but I have found that I can't be too lenient either because some tenants will take advantage. If I give them an inch, they take a mile. But each situation is different. I have this one house now that I let the tenant get 3 months behind. They still couldn't or wouldn't pay the rent and it took me 2 more months to get them out. When I finally did get them out, the house was trashed. So that's what I mean when I say the more benevolent I am, the more I lose.
Edited to add: As I said earlier, I don't see much benefit to the landlord to have a lease. If the landlord is not going to enforce the terms of the lease, he might as well just rent on a month to month basis.
That isn't remotely the same situation. I don't think anyone would suggest letting a tenant not pay for the service is a remotely good idea. There is a difference between something that can be neutral or even win-win and something that is lose-neutral at best.

Lets say you hold them to the contract. What are you winning? 2 months rent. What are you losing? 2months of rent from someone else:) Now if you think your property will sit empty (i.e. properties are only rented in March-April in your hood and anything unrented sits empty til the next window), giving up those 2 months can be costly. If you think you can rerent at 10% higher rates, you are losing money by not letting them out.
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Re: Tenants want to break lease early and is pregnant

Post by randomguy »

Abe wrote: Sat Feb 10, 2018 1:44 pm
Edited to add: As I said earlier, I don't see much benefit to the landlord to have a lease. If the landlord is not going to enforce the terms of the lease, he might as well just rent on a month to month basis.
Well they prevent the tenant from negotiating lower rents every month when you are in a period of declining lease values. I had an apartment that went from 1200/month to 1900/month to 1500/month in a ~5 year period. If I could have neogiated a new rate every month during the decline I would have. As it was at the end I was overpaying by 100/month because I couldn't get market rates. Granted the same was probably true on the way up. And yes that was an abnormal time period:)
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Re: Tenants want to break lease early and is pregnant

Post by Sandtrap »

Abe wrote: Sat Feb 10, 2018 11:29 am I don't think some people posting on this thread have had much experience dealing with tenants. I have owned rental property for over 50 years. In my experience, a lease is more beneficial to the tenant than the landlord. With a lease, the tenant locks in the rent rate for the term of the lease. If the tenant moves before the end of the lease, in most cases I just let them go because if I sue them, I just get a judgement which gives me the right to garnishee wages, bank accounts, etc, but in most cases it's not worth the cost and trouble. A lot of times the tenant will quit paying the rent and it may take me 2 or 3 months to get them out. Many times they will trash the house which will cost me several thousand dollars to get the house back ready to rent plus more time for repairs so more money lost for me. If I do get a "good" tenant, who wants to break the lease, I will usually try to work something out agreeable to both parties, but even then I still lose money in most cases. It makes it hard to be "benevolent". The more benevolent I am, the more I lose. This is just the way it is.
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Re: Tenants want to break lease early and is pregnant

Post by Jags4186 »

raisinsaregrapes wrote: Fri Feb 09, 2018 8:58 am
MP123 wrote: Thu Feb 08, 2018 10:55 pm Let them go, give back deposits assuming it's in good shape, and raise the rent. Win/win.

Trying to claw two months rent out of them isn't worth the headaches.
I do a month to month lease and give my renters very competitive rent. Gives them flexibility but also encourages them to be good renters because they know that I can end the lease in 30 days if I need too. My current renters are on their 3rd year and always pay on time.
That's risky depending where you live. In New Jersey you cannot be evicted because your lease ends. Yes you can change conditions/raise rent, but even those are limited. You can't just decide that rent is going from $1000/mo to $100,000/mo to kick someone out at the end of a lease.
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Re: Tenants want to break lease early and is pregnant

Post by Cycle »

We just do month to month from the start. They could be our tenants for a month or a decade. The benefit is we can get bad Tennants out much faster than an eviction... Just don't renew the 30 day lease. We also avoid these situations.
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Re: Tenants want to break lease early and is pregnant

Post by Abe »

randomguy wrote: Sat Feb 10, 2018 3:28 pm
Abe wrote: Sat Feb 10, 2018 1:44 pm

I try to avoid conflict too, but I have found that I can't be too lenient either because some tenants will take advantage. If I give them an inch, they take a mile. But each situation is different. I have this one house now that I let the tenant get 3 months behind. They still couldn't or wouldn't pay the rent and it took me 2 more months to get them out. When I finally did get them out, the house was trashed. So that's what I mean when I say the more benevolent I am, the more I lose.
Edited to add: As I said earlier, I don't see much benefit to the landlord to have a lease. If the landlord is not going to enforce the terms of the lease, he might as well just rent on a month to month basis.
That isn't remotely the same situation.
No it isn't remotely the same situation because I was responding to another posters question to me. You left that part out.
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Re: Tenants want to break lease early and is pregnant

Post by Northern Flicker »

White Coat Investor wrote: Fri Feb 09, 2018 10:42 pm I'd just go by the contract. They've already decided it was worth it to them to pay that price.

My wife wouldn't let me though, that's one of many reasons we no longer own/manage our own rental properties. We're too nice to get a good return doing that, so we invest differently.
That isn't really a driver of return of rental property. In the present situation, whether the unit turns over now vs in 2 months is unlikely to make much if any difference in rents collected. If it is an area where rents have increased, the early turnover will in fact increase the rent collected.
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Re: Tenants want to break lease early and is pregnant

Post by togb »

Always start with the lease agreement; that's what you and they signed, so it's important to be clear on the terms.

That said, if they have been good tenants, it's a sign they are good people. You have the chance to be decent, and ask them to be decent too. I had young tenants that wanted to move out early-- he got a better job and was relocating. The terms of the lease said he owed the rent, and because of that, he was prepared to pay rent til they or I found new tenants. We agreed to advertise right away, they agreed to ensure the house was spotless and move in ready. They did pay for one month they did not live there-- but then the new tenant was found and moved in. I refunded every cent of their deposit, with interest because it was the right thing to do.

I have a tough lease, in case I need it. But I never want to lose sight of the human factor. My rent house is a high end property. I did that purposefully to attract high end tenants... so I tend to want to work together in good faith.
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Re: Tenants want to break lease early and is pregnant

Post by DVMResident »

Abe wrote: Sat Feb 10, 2018 11:29 am I don't think some people posting on this thread have had much experience dealing with tenants. I have owned rental property for over 50 years. In my experience, a lease is more beneficial to the tenant than the landlord. With a lease, the tenant locks in the rent rate for the term of the lease. If the tenant moves before the end of the lease, in most cases I just let them go because if I sue them, I just get a judgement which gives me the right to garnishee wages, bank accounts, etc, but in most cases it's not worth the cost and trouble. A lot of times the tenant will quit paying the rent and it may take me 2 or 3 months to get them out. Many times they will trash the house which will cost me several thousand dollars to get the house back ready to rent plus more time for repairs so more money lost for me. If I do get a "good" tenant, who wants to break the lease, I will usually try to work something out agreeable to both parties, but even then I still lose money in most cases. It makes it hard to be "benevolent". The more benevolent I am, the more I lose. This is just the way it is.
+1. Amen. Bolding IMO the really critical part. You need to separate on good terms. Until the tenant is moved out and paid up to date, their ability to do damage (physical, withholding rent, forcing you into the eviction process, gossiping with other unit tenants, etc) should not be understated.

Think of it like a divorce. You've seen nasty divorces where both parties end up broke paying lawyers and the kids suffer? You've seen the 'good' divorces where both parents can still raise well adjusted kids?

You and tenants are divorcing and the kids are your business/units that you get the custody of after everything settles. (don't take the analogy too far).

OP, you will have this issue over and over again if you make the tenants sign a new lease every year. Anticipate tenants breaking leases. Life happens and it's not according to your annual lease cycle. Develop a process to deal with tenants breaking leases or start going to a month-to-month system.
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Re: Tenants want to break lease early and is pregnant

Post by Carter3 »

Let them go and wish them luck with their new addition. They probably have no idea of their new financial obligation
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Re: Tenants want to break lease early and is pregnant

Post by White Coat Investor »

jalbert wrote: Sat Feb 10, 2018 9:39 pm
White Coat Investor wrote: Fri Feb 09, 2018 10:42 pm I'd just go by the contract. They've already decided it was worth it to them to pay that price.

My wife wouldn't let me though, that's one of many reasons we no longer own/manage our own rental properties. We're too nice to get a good return doing that, so we invest differently.
That isn't really a driver of return of rental property. In the present situation, whether the unit turns over now vs in 2 months is unlikely to make much if any difference in rents collected. If it is an area where rents have increased, the early turnover will in fact increase the rent collected.
Sure, but leaving money on the table lowers your return. If the contract says you get to keep the deposit or you charge for the rest of the lease or whatever and you don't, it lowers your return.
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Re: Tenants want to break lease early and is pregnant

Post by Northern Flicker »

There is a more fundamental issue preventing a good return if you feel like you must collect fees for broken leases to get a good return.

Many landlords find that tenants stay longer on month-to-month arrangements, often much longer, which increases return.
Risk is not a guarantor of return.
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lomarica01
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Re: Tenants want to break lease early and is pregnant update

Post by lomarica01 »

OK thanks for all the great responses. Here is some feedback.

the lease is in CA we used the standard California Association of Realtors Residential Lease form. Item 30. Breach of Contract Early Termination states the tenant is responsible for loss of rent, rental commissions, advertising costs and painting costs. Landlord may withhold any such amounts from the tenants security deposit.

However we have decided to let them go early with a baby gift and not charge them for painting or other costs which we would have incurred anyway. they agreed to keep the place clean and we can show the house to prospective tenants. One issue still under discussion we want to keep $500 of the security deposit in case we do end up with a loss of rent, however we would return this amount if we are able to rent the place out within say 30 days of their leaving. Not sure if this is even worth it, but they are breaking the lease and have already signed another lease with their new landlord which i think was not the right thing to do.

Finally I think next time we will just do a 6 month or one year lease then make it month to month after that.
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Re: Tenants want to break lease early and is pregnant update

Post by Luke Duke »

lomarica01 wrote: Mon Feb 12, 2018 12:50 pmthey are breaking the lease and have already signed another lease with their new landlord which i think was not the right thing to do.
Why is that not the right thing to do? Would you expect them to not have another place lined up?
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