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My wife and I were presented with an opportunity at the 1 year mark of a 2 year lease on the home we're leasing to purchase it. The homeowner, a company who was going about liquidating some 300+ homes, wanted to give us first right of refusal. We asked for an amount they wanted so we could get pre-qualified for it, per their instructions. They said $340k so we went out and got our pre-approval, sent that in and then they said that an actual appraiser had to come out and do a full inspection. After which time, they notified us that we could purchase the home but for the now appraised value of $392k. Well, we kindly declined and felt a little bait & switched. They stated that they will honor the remaining term of the lease, which really is the law, but since we had an pre-approval burning a hole in our pocket, we started looking around to see what the market was like. We found several other properties we like much better for that price and well, now we have found our dream home and want to make a move, but we can't afford a mortgage and lease for 6+ months. Our lease does not have an "Early Termination Clause" and we can't use any of the doom and gloom excuses I've read about. Not without outright lying and we don't want to do that.
Any suggestions?
We live in Riverside County, in Southern California.
Homeowner (A company) uses a Property Management Company for all transactions and interactions, so not sure what the best way to approach them.
Our lease does not have an "Early Termination Clause" and we can't use any of the doom and gloom excuses I've read about.
Most CA residential leases have a statutory early termination provision by law. You just have to know how to give notice, what to expect and what is the reasonable expenses you will incur.
However, just to make sure (since I seem to be the only CA landlord that uses the full term, no early termination and no mitigation required lease), does your lease specifically state that it is covered under California Civil Code Section 1951.4? (It will be a bolded larger type notice at the start of the lease) If so, the normal statutory requirement to mitigate goes out the window and you are responsible for the full term of the lease with no option to end early.
Hi,
thanks for the quick reply. This is what was used.
I searched the entire document for Ca Civil Code Section 1951.4 and it was not found.
The following is what I see as the "Teeth" to the agreement.
I guess all I can do is ask and see if I get lucky.
CAR Form LR (residential Lease Agreement)
Lease: and shall terminate on (date) at AM/ PM. Tenant shall vacate the Premises upon termination of the Agreement, unless: (i) Landlord and Tenant have extended this Agreement in writing or signed a new agreement; (ii) mandated by local rent control law; or (iii) Landlord accepts Rent from Tenant (other than past due Rent), in which case a month-to-month tenancy shall be created which either party may terminate as specified in paragraph 2A. Rent shall be at a rate agreed to by Landlord and Tenant, or as allowed by law. All other terms and conditions of this Agreement shall remain in full
force and effect.
BREACH OF CONTRACT; EARLY TERMINATION: In addition to any obligations established by paragraph 29, in the event of
termination by Tenant prior to completion of the original term of the Agreement, Tenant shall also be responsible for lost Rent, rental
commissions, advertising expenses and painting costs necessary to ready Premises for re-rental. Landlord may withhold any such
amounts from Tenant's security deposit.
If the company wants to sell the house and now has a current appraisal, they might be happy that you are moving out early so they can prepare the house to put it on the market. Let us know what they say.
I'm no expert, but it sounds like if you leave early, you're responsible for the fees of them re-renting it (+ rent for however long that takes, plus typical cleaning and painting fees)
I went through that a year ago with an apartment, and the listing agency had a fee equal to one month's rent, and it re-rented within weeks of when I left, which wasn't a big deal.
The landlord was none-too-happy, but it worked out pretty well.
The next door neighbors in the apartment liked to bring their parties home with them after the bars closed (so past 2 AM) so I was delighted to get away from there.
Most CA residential leases have a statutory early termination provision by law. You just have to know how to give notice, what to expect and what is the reasonable expenses you will incur.
However, just to make sure (since I seem to be the only CA landlord that uses the full term, no early termination and no mitigation required lease), does your lease specifically state that it is covered under California Civil Code Section 1951.4? (It will be a bolded larger type notice at the start of the lease) If so, the normal statutory requirement to mitigate goes out the window and you are responsible for the full term of the lease with no option to end early.
Going off track to the original subject but of interest of mine so I am interested in your feedback.....
I do not invoke the "lock in" provision for the simple reason that I do not want subleases. In the case of early terminations, I would rather look for my own tenants and sign new leases with new terms. The biggest problems with subleases, in my mind, the ultimate responsibility is the original tenant who may more difficult to contact. Which is why I just don't allow subleases at all. I qualified the original tenant. That is who I want to do business with.
In practice this has only happened a couple times. Since the tenant knows they are on the hook for the remainder of the lease unless a tenant of my choosing agrees to a new lease, they are quite cooperative with showings and, as such, it has worked amicably. A new tenant was found quickly and was ready to move in the day following the existing tenant's departure. Everyone, including me, was happy with the outcome. Security deposits were returned in full.
I believe invoking the "lock in" provision, you have to accept subleases, right?
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