Lease Termination Before the Tenant Moves In

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There are instances when decisions are changed even at the last minute. It may be with our careers, our studies, and other aspects of life. This is why even in the rental housing industry, there are instances when even closed deals do not push through. One instance is when a new tenant decides to break the lease before they move in.

The tenant may have different reasons for wanting to break the lease. It could be a sudden job transfer or a family emergency that requires him to live somewhere else, and many other reasons that may be valid or not. Regardless, the tenant would have to deal with the consequences of terminating the lease and not just leave the landlord to suffer an unexpected vacancy.

Both parties have a legal obligation in dealing with the situation to minimize the negative financial impact.

Proper Documentation

Having proper documentation will work to the landlord’s advantage. Make sure that there is a signed lease agreement between you and the tenant, as well as more importantly, the tenant’s early termination letter.

The Lease Agreement

If the landlord and tenant have signed a lease agreement, both parties have entered a binding contract. It doesn’t matter whether or not the tenant has moved in.

If the tenant decides not to move in, he needs to write you a 30-day notice that he will be breaking the lease. You have to keep that letter as a record of the tenant’s intent.

The landlord must explain to the tenant that he must still pay the monthly rent for the entire duration of the lease agreement, or until the landlord finds a new tenant to occupy the unit. Finding a new tenant is part of the landlord’s good-faith effort, as required by most states. Ideally, both parties should coordinate and cooperate in performing their obligations.

This is where rental agents like you re-enter the picture. If the tenant you found wants to break the lease before they move in, you should do your best to help the landlord find a replacement as quickly as possible for the benefit of everyone. Publish the listing on Padleads and syndicate it to other rental websites so that you get leads fast.

Security Deposit

Landlords usually require security deposits to be paid at the same time the lease agreement is signed. Since the deposit amount is usually equivalent to two or three month’s rent, the tenant and landlord have two options.

  1. The landlord will get the monthly rent from the deposit until a replacement tenant signs a lease. Once the deposit gets used up, and there’s still no replacement tenant, the tenant must then start to pay monthly rent. This is risky on the part of the landlord because it would be harder to collect the money from the tenant or sue them for non-payment.

2. The landlord keeps the security deposit, which will most likely be returned to the tenant in full since there will be no damages to an unoccupied unit. The tenant will most likely pay the monthly rent because they will want to get the security deposit back in full once there’s a replacement tenant. 

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