When a resident breaks a lease...

I came across an article on apartment ratings that discussed some of the complexities of breaking a lease from the tenant's point of view. At the end of the article is a very long list of comments from people who felt they've been "wronged" by their landlords and deserve to get out of their lease. I'm not here to discuss who is right and who is wrong, since I don't know much about individual situations, but I thought I'd look at some other their comments and talk about them from the landlord's point of view.

I live in Kenosha, WI and rented a condo on Dec. 12, 2005. My lease was extended until May 2007 and I can no longer afford this condo. This situation is so messed up and the story is so long I can't even get into it. How can I break the lease early and still get my deposit back?
Always be prepared and make sure your tenants understand the lease. As I wrote in an earlier post, a lease is simply a list of rules that both you and the tenant agree to wrapped up in legalese. It doesn't have to be terribly difficult to comprehend. And, as good and ethical landlords, we should also do our best to make sure that the tenant understands the lease. Just handing it to them and asking them to sign is not due diligence. At the very least you should brush over every major point on the lease and explain their obligations.

Remind your tenants that a lease is a legal contract like a car loan or a mortgage. If you fell on hard times and couldn't make your car payments, the bank isn't going to be kind and forgiving. As a human being you can be a bit more compassionate than a corporate machine, but you are still running a business and this contract will be treated as such.

Hello. I live in Tampa Florida and I just bought a condominium [...] I can't afford to pay the rent and the mortage at the same time. I'm disabled and I live on a second floor, can i use that as an excuse to move, since that was one of the reason I bought a first floor condo.
Know your rights. There are a great many laws out there designed to protect tenants, most of these are state-based, which makes them even more difficult to research and understand. But all landlords need to keep up on what tenants are and aren't allowed to do. For example, this tenant appears to have no legal ground to exit a lease under claims of disability. She might be able to convince a judge had she become disabled after signing the lease and was unable to use the premises, but it's unlikely that her current argument would stand in court. That she bought a condo without thinking about the lease she was in is a problem that is hers to deal with.

On the other hand, every state that I know of has a law in place to allow military personnel to break a lease without penalty if they are reassigned. The Virginia law (§ 55-248.21:1) requires that they give at least 30 days written notice.

When it comes to a private owner, they don't have the same legal standing as a company in that they often cannot run a credit check on you or send you to a collection agency for amounts due. If you are one of those people who have had bad rental histories or have aweful credit, they are the best places to check into first.
You ARE a company. If anyone read this and laughed, then I can't blame you. The very act of running a business makes you a company in the government's eyes. You may not have the resources or the legal departments of a major rental corporation, but you are legally allowed to do everything they are. That includes credit checks and turning bad debts over for collection. In fact, if there is anyone out there that isn't running credit checks on tenants, you deserve tenants like these. Credit checks might be intimidating, but they are simple once you learn how to use them.

I live alone and it is difficult just getting around now, so I have to move in with some family. However, I still have 2 months left on my lease, but cannot afford to pay now. Is it a binding law or if the apartment management is willing, can they let you out of the lease?
The lease is as binding as you make it. If someone leaves, nothing will happen to them unless you pursue it. This cuts both ways. If the man above did truly fall ill and needed to move in with relatives, you might allow him to break his lease without penalty out of sheer decency. But if a jackass moves out in the dead of winter without warning, nothing will come of it unless you file a claim against them.

A word of warning, I have heard if said many times that pursuing a deadbeat tenant once they have left your property is a waste of time. I have no personal experience with this subject, but be warned that most deadbeat tenants don't have the cash lying around just waiting to be seized. Trying to extract penalties from them post-tenancy can be a long, difficult and possibly expensive process. Often the best you can do is send a collection agency after them and mar their credit history.

hi... there is a sexual predator moving 2 blocks from us and we have a younger daughter.. he is actually a first degree sexual offender meaning the girl molested was under 13 years of age. I was wondering if this allows us to be able to break our lease if we feel unsafe... which we do.
Learn to talk to your tenants. Not everything has to be a fight. In this example explain to them that registered predators are allowed to live almost where ever they want, and that the other parents in the neighborhood who own their houses have no recourse (they can't force the previous owner to buy the house back just because the predator moved in). And who's to say that a predator wouldn't move into your new neighborhood too? You can only live in fear for so long. Form a neighborhood watch and take this opportunity to sit down with your daughter and explain the dangers of people she doesn't know. Work together with your community to actively prevent bad situations from occuring.

In the lease it says that if you break the lease you have to pay equal to 3 months rent. I can not afford rent let alone 3 months of it at one time. Is there anything I can do?
Don't be a dick. Sure, as landlords we hate broken leases. Broken leases lead to all sorts of expenses for us, from advertising for new tenants to vacancies. But don't go overboard in fixing penalties for breaking a lease because sometimes life happens and your tenant gets a new job in another state. Biff and I ask for 30 days notice and then a 1-month's rent penalty. That gives us (in essence) a 60-day window to find a new tenant form the moment we know about the vacancy. I think that is a very reasonable period of time to find someone to fill the place, and very few people ever need to move on less than 30 days notice.

An added bonus of making penalties more reasonable is that the probability of the penalty being paid goes up tremendously. Let's face it, if your tenant gets a new job in Paris, he's going one way or another. If you are asking for his first-born son he's more likely to try to dodge the bill. But asking for something practical (like a penalty equal to one month's rent) means you are much more likely to get that money.

30 comments:

Craig said...

Good times, and solid commentary. The "Don't be a dick" advice is especially helpful. I've found that being on a relatively friendly basis with tenants helps me to avoid most situations that would put me in a jumped-lease bind. Open communication, and a non-confrontational yet professional presence goes a long way in this business.

Aaronius said...

Yeah, that's some good advice. Especially if you're a student, you'll run into all kinds of stuff like that. RateMyApartments.com seems to do a pretty good job of reviewing student housing so others won't walk into the same traps.

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