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September 22, 2009
Tenant Breaks Lease...
my tenants moved out 6 weeks before their lease ended.(may 15th) They had paid for the second to last month( maY), but not the final month. I kept their deposit to cover their final month (june).
i ended up finding a new tenant that moved in right away(june 1st)
Am i obligated to therefor returns the original tenants deposit, or not.
They have recently sent me a letter saying they want their deposit.
If anyone can point me to the appropriate law, it would be great.
thanks.
Comments
Did you agree to let them move out early or did they sneak out in the middle of the night?
Posted by: northsloperenter at September 22, 2009 12:57 PM
they didnt sneak out. they told us they were moving, and we agreed verbably their deposit would cover their last month.
i think when they realized we found a new renter, they thought they should get their deposit back.
fyi, our new renter pays less rent, i dropped the rent considerably, because i have a morgage to pay- and its renters market now.
Posted by: dogface at September 22, 2009 1:06 PM
they didnt sneak out. they told us they were moving, and we agreed verbably their deposit would cover their last month.
i think when they realized we found a new renter, they thought they should get their deposit back.
fyi, our new renter pays less rent, i dropped the rent considerably, because i have a morgage to pay- and its arenters market now.
Posted by: dogface at September 22, 2009 1:06 PM
I'd say the proper thing to do would be to return a portion of the security deposit to cover any loss that you incurred. I think you are probably within your rights to keep it - but it is bad karma...the last thing a landlord needs these days!
Posted by: henrycurtis at September 22, 2009 1:19 PM
keep the deposit. they broke their lease...even if you agreed. i doesnt matter if you found someone new or not.
Posted by: CGmodern at September 22, 2009 1:34 PM
You are required to return the deposit minus any damages and costs incurred for lost rent. If you received rent for June that was less than you would have received under the lease that they broke, you can deduct that amount from their deposit. For example: They paid $1500/month, the new tenant pays $1300/month and you had to fix $50 worth of damage to the apartment. If the deposit was $1500 then you are obligated to give them back $1250 after deducting for the damage ($50) and rent differential for June's rent ($250).
This article in NYTimes touches on this:
Posted by: setancre at September 22, 2009 2:16 PM
Tricky.
Did your verbal agreement include any mention of what would happen if you found a new tenant? Did the old tenant do anything to help you find a new tenant?
(I've seen ads on craigslist put up by tenants trying to find someone to move into their place because they needed to break their lease).
They agreed to let you keep the deposit for the last month (which left you in a bad spot if they damaged the place or left it a mess), so that's certainly in your favor. Although if you examined the place before agreeing and they were responsible tenants, that's less of an issue.
Then you were able to find a tenant for that month, so you are not losing money due to a vacancy.
But you are getting less rent for June than you would have, and you were inconvenienced by having to find a tenant 1 month earlier than you anticipated.
I'd agree with henrycurtis and consider the moral side as well as the legal side.
If they were generally good tenants and gave you some sort of reasonable notice, I would return part of the deposit.
I think I would very likely want to keep the difference between what the old tenant would have paid for June and what the new tenant pays for June and any unusual expenses involved in the unexpected turnover of the apartment. Also, if the situation was particularly disruptive to you (e.g., you had vacation plans you needed to change or something), some compensation for that would make sense to me.
Posted by: northsloperenter at September 22, 2009 2:29 PM
if in doubt - return half of the deposit.
Posted by: bobjohn at September 22, 2009 2:44 PM
You're being a real dick and looking for loophole in not returning money (minus any loss incurred).
p.s. I am a landlord.
Posted by: Petebklyn at September 22, 2009 3:11 PM
I'm sorry Pete - what Loophole? As a Landlord you should know that a tenant is responsible for the entire duration of a lease. They verbally agreed that the security will go towards the last month - period. It's up to you dog if you want to be nice to return a portion of the security as you've found a new tenant.
Posted by: Crownlfc at September 22, 2009 3:49 PM
I'd be fair about it and refund all but the $$ you're out of pocket to make repairs and for lost rent. You had no period of lost rent but as noted above you did anticipate at least the final month's rent at the former higher rate.
I recently let a commercial tenant out of their lease almost 2 years early. I tried immediately to find another tenant but was unable to do so for about 4 months, so I kept the former tenant's 2 month security and applied it to my mortgage. Residential tenants I've had have left early and found a replacement tenant. I've fully refunded their deposits if the apartment wasn't damaged.
At least one former residential tenant left before the end of their term without making arrangements. I fully refunded their deposit because I never wanted to see or hear from them before. In fact, after I encouraged them to move by saying life is too short to be unhappy, I presented the refund as a gift to make them comfortable in their new home.
Posted by: bessie2 at September 22, 2009 4:18 PM
Never wanted to see or hear from them again, not before...
Posted by: bessie2 at September 22, 2009 4:22 PM
You have a duty to mitigate damages if they breach the lease by terminating early. If you have mitigated damages by finding another tenant, you cannot keep the deposit except to compensate for damages, including those from the early termination.
Posted by: saminthehood at September 22, 2009 4:52 PM
eh. a deal is a deal. i say you should keep it.
Posted by: slick at September 22, 2009 7:12 PM
setancre is correct. "You are required to return the deposit minus any damages and costs incurred for lost rent. If you received rent for June that was less than you would have received under the lease that they broke, you can deduct that amount from their deposit."
That's what the law says. Do anything else and you will lose in small claims court.
Posted by: jfss at September 22, 2009 8:13 PM
As a landlord, I think the thing I would do is refund them the security deposit minus: any damages beyond reasonable wear & tear, minus the 15 days they were gone, and minus the difference in rent between the old tenant and them.
But who knows in a particular situation? Maybe they were terrible tenants. Maybe they were great ones. Maybe they were shmoes who tried hard but who messed things up because they were kind of screwups. Maybe they were really great and understanding the 3 weeks you didn't have hot water. Who knows?
I think the thing to do is to try and put yourself in their shoes and think if a landlord did this to me, would I be OK with it? Not happy, but like "ok, this is reasonable, I respect this."
Posted by: bkrules at September 22, 2009 9:59 PM
At least you were nice and let the deposit ride as the last month's rent. I had a landlord once who wouldn't let me do that even though I was being forced out due to her 10% rent increase. I did it anyway though.....
I would keep money for any vacant time (surely you had to paint, etc.) and any damage and give the rest back.
Posted by: Brokedeveloper at September 24, 2009 3:56 PM
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