Early termination fee & paying until unit re-rents (apartment, breaking a lease, tenant)
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Hello - I am in a lease agreement where the landlord is requiring me to pay a fee AND holding me responsible until the unit re-rents. Is this legal in California? I thought you could require one or the other. I didn't think you could require both?
Here is the language of the lease:
"Should tenant desire to terminate the lease prior to the expiration of the lease term, tenant agrees to provide a minimum notice of 30 days and allow the property to be shown for re-lease. Tenant shall be liable for lease payments until re-leased to a new resident acceptable to the owner. Tenant shall also be liable for all costs of advertising, a re-leasing fee (equal to one-half of months rent; minimum of 750)."
I was told that I could not advertise the property myself and find prospective tenants to send over to them for qualification, that they had to do it.
If this is illegal, could someone please point me to the right civil code. I have no problem paying what is right, but I feel like requiring both is illegal and that telling me I couldn't find someone to take over the lease myself (of course they would have to qualify) is illegal.
I'm from the wrong state, but in my state it is legal for a tenant to break the lease provided they pay a lease early termination fee ($500 in my lease contract) and continue to pay all expenses whether they live there or not, until landlord can find a replacement tenant--landlord is responsible to make a good faith effort to find a replacement tenant.
No advertising fees. No re-leasing fee (probably commission). Since my state is not CA I will decline further comment.
OP is reminded to read the sticky topic at the top of this forum area, scroll down to your state. Click.
While landlords must mitigate their damages, California Civil Code, Section 1951.2, states that landlords can still collect damages that are more than "the amount of such rental loss for the same period that the lessee proves could be reasonably avoided." In other words, even if you find a new tenant for your apartment, your landlord can still make you pay damages associated with your early lease termination. Your landlord can seek the costs associated with advertising the vacancy and screening applicants. These are costs your landlord incurred as the direct result of your need for an early end to the agreement you signed.
I should study my state more and see if I could qualify for that. I have to pay $1,000 Realtor commission to re-rent a house. Why should I pay that just because my lease tenant wimped out? Even though I charge them $500 for early termination fee.
I've had to go nuclear only once in 3 years, on a broken lease tenant. I lose almost all of my tenants due to them buying their own houses.
I charge an application fee for tenants whose applications I agree to vet, and I accept only one tenant at a time and refuse to view other applications until I have ruled on the current application. Application fees are not a profit center for me.
I should study my state more and see if I could qualify for that. I have to pay $1,000 Realtor commission to re-rent a house. Why should I pay that just because my lease tenant wimped out? Even though I charge them $500 for early termination fee.
I've had to go nuclear only once in 3 years, on a broken lease tenant. I lose almost all of my tenants due to them buying their own houses.
I charge an application fee for tenants whose applications I agree to vet, and I accept only one tenant at a time and refuse to view other applications until I have ruled on the current application. Application fees are not a profit center for me.
Things to think about. Again, not CA.
The standard penalty for early termination in my area is two months rent. Why are you only charging $500?? That's insanely low.
I think the key here is the terminology. You are not paying an "early termination fee" which is typically much more than $500 and absolves tenant of all future financial liabilites associated with breaking a lease. You are paying a "re-letting fee" to compensate landlord for the financial damages associated with having to re-rent the dwelling early that do not involve lost rent. Early termination fees are typically 2+ months rent. You agreed to it and it would be legal in most states, check with attorney in CA to be sure.
I doubt any of it is illegal but it is also California. Advertising, unit prep, and tenant placement all have costs and by breaking your lease early you are going to have to pay for all of that and still pay rent. I am not in CA but my reletting fee is one months rent and it clearly states it is for those purposes and it also clearly states that it is not a release. The Multihousing Association lease has this as standard so I know it isn't illegal here.
The standard penalty for early termination in my area is two months rent. Why are you only charging $500?? That's insanely low.
IMO not insanely low but your comments have given me thoughts that I should increase it to $1,000, the same fee I pay my Realtor to re-rent the house. The fee is stated in my standard addendum and I'll probably increase it to the higher figure. Why should I have to pay my Realtor to re-rent an early termination?
Note that my lease + addendum requires tenant to continue making rent payments, continue paying utilities, continue routine service such as yard and pool service, until my good faith effort to find a new tenant succeeds. Considering that, maybe not insanely low, but I agree with you that it is certainly too low.
To be honest I've kind of had it being a landlord and my current business strategy is that if vacancy timing permits I'm going to sell one house per year until I'm no longer a landlord. At the current time it looks like my stars are lining up with lease expiry dates and my one month-to-month tenant appears to want to stay, so I may achieve my goal of never renting to a new tenant ever again.
And of course I am stuck with the terms in the leases I have now. (Note that my rentals are not in CA.)
Hello - I am in a lease agreement where the landlord is requiring me to pay a fee AND holding me responsible until the unit re-rents. Is this legal in California? I thought you could require one or the other. I didn't think you could require both?
Here is the language of the lease:
"Should tenant desire to terminate the lease prior to the expiration of the lease term, tenant agrees to provide a minimum notice of 30 days and allow the property to be shown for re-lease. Tenant shall be liable for lease payments until re-leased to a new resident acceptable to the owner. Tenant shall also be liable for all costs of advertising, a re-leasing fee (equal to one-half of months rent; minimum of 750)."
I was told that I could not advertise the property myself and find prospective tenants to send over to them for qualification, that they had to do it.
If this is illegal, could someone please point me to the right civil code. I have no problem paying what is right, but I feel like requiring both is illegal and that telling me I couldn't find someone to take over the lease myself (of course they would have to qualify) is illegal.
Quote:
Originally Posted by reenzz
While landlords must mitigate their damages, California Civil Code, Section 1951.2, states that landlords can still collect damages that are more than "the amount of such rental loss for the same period that the lessee proves could be reasonably avoided." In other words, even if you find a new tenant for your apartment, your landlord can still make you pay damages associated with your early lease termination. Your landlord can seek the costs associated with advertising the vacancy and screening applicants. These are costs your landlord incurred as the direct result of your need for an early end to the agreement you signed.
The following pertains to California only
reenzz stated exactly the issue here but I will elaborate a little on your situation.
What you (tenant) are responsible for is lost rent and reasonable landlord charges to find a new tenant. No judge in CA will find the $750 releasing fee reasonable but they will find most advertising fees reasonable.
You absolutely can advertise on your own and present prospective tenants to the landlord. The landlord is obligated to mitigate your losses as much as reasonably possible. He certainly will be found in violation of this if he does not evaluate your candidates. As a matter of fact, unless there is something wrong with your candidate, such as low credit score, eviction history, criminal history, etc. you will have a pretty good case that your landlord did not do what he could to mitigate your losses. He still doesn't have to lease the unit to your candidate but a judge should determine that your obligation ended at that point because a suitable candidate was found. (you would only owe rent up until you presented the candidate to the landlord)
Remember to document everything in case this goes to trial. It will be small claims.
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