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My tenant broke the lease one month early, and wants her deposit back. When we renewed her lease, she had mentioned that she may have to break it. I added a line in the lease saying if she ended her lease early, I wouldn't hold her liable for the entire lease period, but I would keep the security deposit as premium for my risk (we both signed). When we talked verbally, I told her that if I could get it rented in June, I wouldn't keep the deposit.
Well, I did everything in my power to get it rented, but the house was dirty, and in bad shape, and new tenants wanted in clean before signing up. I spent two weeks cleaning before I could finally get it rented. The old tenants also had carpet stains and I replaced carpet. There's also utilities that I now must cover.
Even if I decide to let the damage go, could I still keep the deposit given the fact that the lease renewal signed said I could/would? I've spent lot more than the deposit amount to get to this point after all. Please let me know what you think.
Does your STATE LAW allow you to use a security deposit as a premium for early lease termination? If not, you can't do it. Athough it may have seemed like a good thing, if your state does not allow for such provisions with security deposits, it would be null and void.
The second issue is, what time period does your STATE LAW give you to return or account for the security deposit? If you did not return or send an accounting as required under your state law, you may have forfeited the right to retain any of it. It's possible the tenant could file a claim and receive the entire deposit back, twice the amount and in some places 3 or 4 times the amount.
My tenant broke the lease one month early ...but the house was dirty, and in bad shape...
I spent two weeks cleaning before I could finally get it rented.
The old tenants also had carpet stains and I replaced carpet.
There's also utilities that I now must cover.
Even if I decide to let the damage go....
Why would you? If it's as broad and deep as all that it becomes the #1 issue.
Document (photo's etc) it and tally up a bill.
Deduct that from the SD... send all to their new address within the proper time period...
and *ask* them to pay the as agreed to last months rent...
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I told her that if I could get it rented in June, I wouldn't keep the deposit.
I bet you'll never do that again. Huh?
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Please let me know what you think.
I think you need to find a property owners group and a good RE attorney.
Get some coaching in the day to day and a proven lease.
Does your STATE LAW allow you to use a security deposit as a premium for early lease termination? If not, you can't do it. Athough it may have seemed like a good thing, if your state does not allow for such provisions with security deposits, it would be null and void.
The second issue is, what time period does your STATE LAW give you to return or account for the security deposit? If you did not return or send an accounting as required under your state law, you may have forfeited the right to retain any of it. It's possible the tenant could file a claim and receive the entire deposit back, twice the amount and in some places 3 or 4 times the amount.
What state are you in, that would help a lot!
This is in Minnesota, and the date on the lease to end is 6/30/2013, they moved out June 1st, leaving the place dirty that new tenants wouldn't move in. So, this means she gets her full deposit back? I believe state law says the deposit can't be used as rent. So, couldn't I counter-claim for the last month's rent (which is more than the deposit anyway)?
This is in Minnesota, and the date on the lease to end is 6/30/2013, they moved out June 1st, leaving the place dirty that new tenants wouldn't move in. So, this means she gets her full deposit back? I believe state law says the deposit can't be used as rent. So, couldn't I counter-claim for the last month's rent (which is more than the deposit anyway)?
Two separate issues:
1) Damages... you have X days (30?) from the date of regaining possession to tally up a bill
and present that accounting to the tenant showing how much of the SD you are taking.
You didn't do this. Not doing so opens YOU up to liabilities if they press.
(They won't -last thing they want is to see a Judge- but they could)
2) Unpaid June rent... The same as had it been last February you start by asking the tenant.
Then advance through the payment demand process until you get to the Judge.
You didn't do this either. It wouldn't matter much as few ex-tenants will ever pay.
And the time/bother probably wouldn't be worth your time.
Your real error was (apparently) not inspecting the place thoroughly before they left.
If you had... you would never have agreed to refund a SD... right?
You would have made a stink and ticked off a to-do list.
Two separate issues:
1) Damages... you have X days (30?) from the date of regaining possession to tally up a bill
and present that accounting to the tenant showing how much of the SD you are taking.
You didn't do this. Not doing so opens YOU up to liabilities if they press.
(They won't -last thing they want is to see a Judge- but they could)
2) Unpaid June rent... The same as had it been last February you start by asking the tenant.
Then advance through the payment demand process until you get to the Judge.
You didn't do this either. It wouldn't matter much as few ex-tenants will ever pay.
And the time/bother probably wouldn't be worth your time.
Your real error was (apparently) not inspecting the place thoroughly before they left.
If you had... you would never have agreed to refund a SD... right?
You would have made a stink and ticked off a to-do list.
hth
Thanks for the info. Just want to clarify things a bit more.
State law talks about 21 days after "termination of tenancy". Couldn't a case be made that termination happens at the end of the lease? State law also allows holding on to SD to cover unpaid rent. Is that now invalid in my case here? They did break the lease and they signed a document stating I would keep the SD if the lease was broken. Doesn't the sigs mean anything, and I have to eat the costs? I did inspect the place, and pointed out all the carpet stains. I ended up getting new carpet for the place.
Edit: One last thing... my previous tenant gave me a written notice to vacate. This one did not provide a written notice as required by law. Reading the specific law, it states that the tenant must give a written notice. They just told me they were leaving, and I really thought we were on good terms. Since I'm going to be following the letter of the law, what about the fact that I never got a written notice?
State law talks about 21 days after "termination of tenancy".
Couldn't a case be made that termination happens at the end of the lease?
In short, no.
Your describing the continuing lease contract obligation but the issue is **possession**.
They turned the place back over to you.
If it was clean and fresh and you had another tenant ready.. THEY would then have tenancy.
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State law also allows holding on to SD to cover unpaid rent.
And you got that. If you didn't *also* have damages you would be golden.
As to damages... you also need to be able to show that the place was OK when they moved in.
If it was iffy (like with stained carpet from prior tenant) the rest would be hard to prove.
And you got that. If you didn't *also* have damages you would be golden.
Sorry, not sure what you mean. I got the SD, but can't use it to cover rent? Also, please tell me what you think about the fact that they never gave me written notice to vacate as required by law? Does that matter?
I mean, it almost seems as if all these laws are meant to protect tenants, and landlords are out of luck. I thought the lease we signed meant something
...about the fact that they never gave me written notice to vacate as required by law?
You can't pick and choose which parts of the process you want to follow and which you want to ignore
and not have that come back to bite you. You dealt with them verbally on the notice and terms...
and by that you gave up the right to expect written on these.
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I mean, it almost seems as if all these laws are meant to protect tenants...
Most are. The presumption is that the LL knows the law, where their responsibility lies, how to protect
their interests, is operating a continuing enterprise that WILL have hiccups and expenses, and will
"roll with the punches" when things like this come upon the unprepared.
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My tenant broke the lease one month early, and wants her deposit back.
1) Show them your proof of their damages, your expenses tally sheet and your demand for June rent.
Tell them to pay you something.
2) Tell them to pound sand.
3) Drop back 10 and say "aw, hell. let's just call it even"
4) Wait for them to learn about the 21 day rule and then take YOU to Court for treble.
Where you can each try to explain it all to the Judge.
In Minnesota, you are not required to mitigate damages, if the tenant abandons the lease. You can charge rent until the lease ends, unless you rent it to someone else before lease end date.
They did not give you written notice, and moved out 1 month early, therefore, they abandoned the lease.
Plus, they signed an agreement , with a liquidated damages clause that said that they would pay you the amount of the security deposit, if they broke the lease.
I think you are good to keep it. And if they take you to court, I think you'd win.
Here's the actual law regarding no duty to mitigate, if you want it. It's from this site:
Minnesota: In Control Data Corp. v. Metro Office Parks Co., 296 Minn. 302 (Minn. 1973), the Court stated:
In Minnesota, landlords are under no obligation to mitigate damages after a tenant abandons leased premises. Gruman v. Investors Services, Inc. 247 Minn. 502, 78 N.W. 2d 377 (1956); Poboisk v. Colon, 292 Minn. 451, 195 N.W. 2d 431 (1972)." Also seeMarkoe v. Naiditch & Sons, 226 N.W.2d 289 (Minn.1975).
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