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Is this breach of contract?

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  • PETRA_Passive_Real Estate
    replied
    For transparency, I own a property management company, we see this situation often and generally handle as follows:

    Communicate with the tenant on their plan and establish that it is not what was agreed to in their lease. That they are responsible for rent and other expenses (utilities, damages to the property, etc.) through the term of their lease until a new tenant is found. Our lease has a early termination penalty in it of one months rent (this is breakeven cost to our clients for releasing fee, their time and other minor expenses they'll likely incur from the changeover). The termination penalty is probably good to add going forward because it makes this process known and cleaner for both sides.

    Tell them you will be marketing the property and doing showings with 24 hours notice to them. Tell them they need to have the house in a good showing state as they benefit from having a new tenant as soon as possible to avoid paying rent any longer than needed

    Make sure you still perform a move-out inspection when the current tenant leaves and add up all costs clear through the new tenant moving in before giving their deposit back.

    Depending on the individual state's Landlord-Tenant Act, legal enforceability will vary but often it favors the tenant in a residential situation, best bet is to be clear on the process and work together to get it released and minmize out of pocket costs. The release doesn't need to be just anybody, find a quality tenant with the same standards that you would if it were a normal vacancy.

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  • jfoxcpacfp
    replied
    Communication regarding a breach will have more weight from an attorney - even a very cheap attorney. Otherwise, lesson learned and get a bigger deposit next time. “Good” people still do sucky things when it’s in their best interest.

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  • Tim
    replied
    A commercial company will pursue rent until its rented and keep any deposit. Nothing personal, just business. Forfeit deposit for breaking contract.

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  • childay
    replied
    Originally posted by StateOfMyHead View Post

    But giving notice to break a contract without options or agreement of both parties doesn't make it ok.
    I agree, they should have asked nicely rather than giving a notice

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  • fatlittlepig
    replied
    I would only release them from the lease contingent on the unit being rented.

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  • StateOfMyHead
    replied
    Originally posted by childay View Post
    Agree. I don't have any rental properties but it sounds like they're giving you plenty of notice, not just ghosting off one day with a note on the door..
    But giving notice to break a contract without options or agreement of both parties doesn't make it ok.

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  • fatlittlepig
    replied
    I would call them out on it but I wouldn’t pursue it any further than that. I wouldn’t do it in a confrontational way but I think something needs to be said.

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  • Tim
    replied
    Originally posted by CordMcNally View Post
    It's definitely a breach of contract but I'm not sure how far I'd go to enforce it. I'd probably just let them know, ask for them to be helpful in getting it rented out, then thank them for being good renters and forget about it.
    Same approach. A reasonable compromise is find new renters. If you actually make best efforts, you would be ethnically correct in requesting to be made whole. They would have skin in the game. No vacancy or loss, no problem. Actually, some places put a sublease option with approval for this purpose. Good tenants can give you good referrals as well.

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  • Gamma Knives
    replied
    I agree with your purposed approach. I suggest saying something along the lines of: as you are terminating your lease early, we would appreciate your assistance in helping find another tenant. We will need to be showing the property and would appreciate your flexibility in allowing prospective tenants to view the property and keeping it in show worthy condition. Up to your discretion if you add something about wanting to rent it promptly so they are not liable for additional months.

    If you have a significant delay in renting it out you can ask the former tenant to pay those months. You could pursue a small claims court case for the lost rent if they refuse. If you are considering this I would keep records of your attempts to rent it out and evidence that you are asking market rate. Obviously it would be up to you if it is worth doing so.

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  • childay
    replied
    Originally posted by Brains428 View Post
    I think they understand they're breaking the contract, which is why they paid through July. You basically have 70 days to find a new tenant. Just let them know that you will be showing the property to prospective tenants and you'll give them x many hours notice.
    Agree. I don't have any rental properties but it sounds like they're giving you plenty of notice, not just ghosting off one day with a note on the door..

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  • Brains428
    replied
    I think they understand they're breaking the contract, which is why they paid through July. You basically have 70 days to find a new tenant. Just let them know that you will be showing the property to prospective tenants and you'll give them x many hours notice.

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  • FIREshrink
    replied
    Don't do that. Just market yourself and move on. If you are unable to find a tenant for a few months after they move out you could come after them for that difference. You could come after them for the additional costs of showing the property again, as well. But is it worth it?

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  • petthezoo
    replied
    We were also thinking it’s most likely not worth the time and effort to litigate. Besides, the court almost always sided with tenants. We are charging market rate rent and a new tenant would occupy the space around mid-July. The current family has already sent us a check for the totality of June and July rent (they always like to pay early). We won’t keep their security deposit since they have been very good tenants. In exchange, maybe they could help us find some new tenants. From prior experiences, what’s a good way to ask them for help in regards to finding a new tenant?

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  • CordMcNally
    replied
    It's definitely a breach of contract but I'm not sure how far I'd go to enforce it. I'd probably just let them know, ask for them to be helpful in getting it rented out, then thank them for being good renters and forget about it.

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  • StateOfMyHead
    replied
    I find it rude that they decided to do this without discussing and coming up with an acceptable plan in advance but that aside they would need to assist with finding a new tenant immediately. In the past my tenants who wanted to break a lease showed the property themselves and were quite helpful in securing a new tenant. I made it clear the prospective tenant would be vetted for credit, rental history, income etc. If the property stays fully rented I'd say no harm no foul however if not at the very least I would keep their security deposit as non-payment of rent due to the breach in contract. Personally although I'm not a lawyer I can't imagine why a court case wouldn't favor you in this instance but whether it would be worth the hassle and strife is another story. Good luck.

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