What To Do When a Tenant Breaks Their Lease.
Having a tenant break a lease can be a stressful and expensive experience.
It is imperative to write your lease agreement carefully, you may be able to head off some problems before they ever arise by setting expectations and outlining the penalties if they break their lease or any of its terms and conditions.
1. Breaking the lease usually means that a tenant has vacated a property before the term of the lease has expired. Other issues, such as failure to follow the terms of a lease agreement, terms and conditions and following the rules of the community and/or law, may also constitute breaking the lease. Immediately starts a file for all written communication with the tenant that concerns the lease termination issue including keeping all emails and texts. If the tenant wrote you a notice about breaking the lease, keep that in the file. If the tenant left without warning, type up a short note about when you discovered the abandoned unit and any actions you took to contact the tenant. Write down all times, dates, phone numbers and notes of any phone conversations you have with the tenant. It’s advisable to get a relative or a friend in case of an emergency on record when you initially rented the property. Contact those people as well to try and get in contact with your tenant. Keep all this information, and any future correspondence, in your file. You will need it when you attend a court hearing to recover any money owed
2. Send a written notice to the tenant to remind him/her that s/he must pay the rent until the lease term expires or you rent out the property to another tenant. Let him/her know that s/he should pay the rent on time, as usual, until you let him/her know about the new tenancy. Remind him/her that if s/he doesn’t pay the rent, as outlined in your lease agreement, you will have no choice but to pursue legal action. State that even though s/he does not live in the rental property anymore, s/he is still responsible for the rent. Sign and date the letter, and keep a copy in your file. Hand deliver the letter or send it by certified or registered return mail to his/her current or last known address.
3. Inspect the property before the tenant leaves, if you can. Fill out an inspection checklist and discuss with the tenant any damages or issues with the property before s/he leaves. If the tenant abandoned the unit, do an inspection on your own and note any damages. Take pictures of anything you find that needs to be repaired beyond normal wear and tear. Include a copy of the checklist and all photos in your file
4. Prepare your property for rent and start advertising for a new tenant. Keep copies of any ads you place and write a list of any prospective tenants you interview. Place this written information in your file. Rent out the property as soon as you can, within reason, to a qualified applicant, to show the court you did your duty as a landlord and tried to minimize your financial losses. Note the day the new tenant moved into the rental property in your file.
5. Calculate the amount of rent the original tenant owes in rent from the time the rent went unpaid up to the day the new tenant moved in. Add any amount owed for damages to the rental property from the original tenant. Deduct the total amount from the original tenant’s security deposit. The remaining amount is the total that the original tenant owes you. Keep these calculations in your file.
6. Send a written notice to the tenant with the total amount due, an itemized list of the damages and copies of all receipts that show repair work. List how you deducted each amount from the original tenant’s security deposit. Let the tenant know that the amount owed is due within 10 days of receiving the notice. If the funds are not collected in time, you will have no choice but to file with the small claims court. Sign and date the letter, then keep a copy for you. Hand-deliver the letter or send it via certified or registered return mail.
7. Collect the money from the original tenant if s/he pays by the deadline. If s/he does not, file a civil suit in the county clerk’s office. The court will contact the original tenant and set a date for a hearing. You and the tenant will both appear to present your information to a judge. Bring your file with all the written evidence and documentation of the process. It will help the judge see the steps you’ve taken to collect the money on your own and that you have been diligent and reasonable during the process.
8. Await the judgment and hope that the judge will find in your favor. If so, the judge will work out whether the tenant will pay you monthly until the debt is paid, garnish the tenant’s paycheck or other means of collection. Always abide by whatever payment plan the judge orders from the tenant.
Here are some helpful tips that will assist you in handling a broken lease agreement.
When you sit down to write your lease agreement, consider the worst possible outcome: that your tenant will break your lease. This mindset will help you prepare for the worst and protect yourself, even as you hope for a problem-free tenancy.
First, state clearly what will happen if your tenant breaks the terms of the lease. For example, you can require that the tenant must find someone else to take over their lease before they will be free of their legal obligation under the lease agreement. This can help protect you against lost income resulting from a broken lease and a vacant rental unit.
You will also need to state what action you will take if the lease is broken and the tenant does not find a replacement tenant. You can state that the security deposit will be forfeited if the lease is broken; leaving you with some money to make up for the rent that you will miss. Since security deposits are typically only one month’s rent, this may not be enough to satisfy your needs, but it is better than receiving no payment at all.
You should also include a statement that the lease agreement is legally binding and that you will take a tenant to court to recoup the lost rental income amount. Including this stipulation may discourage your tenants from breaking their leases.
If your tenant vacates without notice, you are generally entitled to seize the security deposit under your lease agreement, and you may wish to take your former tenant to court. However, it may be difficult to track them down. In this case, start searching for a replacement tenant while you seek to enforce the terms of the lease with your former tenant. You may not be able to track them down again, but you will at least have the security deposit to make up some of the lost revenue.
If your current tenant is unable to find someone to take over the balance of the lease, you can decide whether or not you wish to enforce other remedies for recouping your losses. You may insist that your tenant continues to pay rent for the property until a suitable replacement has been found. However, in many cases, this is not economically feasible for the tenant. It will be up to you to release them from their agreement or take action to enforce payment.
FOR MORE INFORMATION about tenant rights and landlord rights, visit Klein Property Managment at http://www.KleinPropertyManagement.com or call us today at (732) 446-0611.