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[FONT=Verdana]An agreement to lease a property is signed by myself (LL) and proposed tenant 30 days before the property is to be occupied. Dates for deposit and rent to be paid are specified in the lease to be paid at a future time before move in. Three (3) days later, current tenant decides they want to remain in the house. LL withdraws agreement from newly proposed tenant. No monies have been paid, but the terms in the agreement specifically state that if LL cancels the agreement to rent to this tenant, he will be liable for $200.00 as cancellation fee. Because of the three day period and fact that no money was exchanged, Is the landlord obigated to pay the proposed tenant the canellation fee. If so, is the current tenant liable for a reletting fee since they had given a formal written notice to vacate which prompted us to seek new occupants for the property. [/FONT]
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[FONT=Verdana] I hope someone can help me with this situation as my husband and I are in a bitter disagreement over this issue.
I think $200 is cheap to get out of a fully executed contract regardless of whether they paid rent or not. Not to mention the fact that you have that very kickout clause built into your contract with the tenant regardless of whether or not they had paid their deposit. (Personally I would never sign a lease without having already received their deposit) How would you feel if it was the other way around and your proposed, approved, all signed and sealed tenant "changed their mind"?
It would seem that since your agreement does specifically address the issue of a cancellation fee then you're bound to it so will have to pay the $200 to the proposed new tenant. However, unless your agreement with your present tenant covers the issue then the present tenant owes you nothing.
In most jurisdictions, a LL is allowed to keep a portion of the deposited money if the tenant changes their mind after signing the contract but even if that were the issue you didn't collect anything from the new tenant and, as KonaKat notes, that's something you should reconsider in the future as it's not good business practice.
Since you agreed to let your present tenant change their mind after they'd given you notice to quit and after you'd signed on a new tenant (another bad business move on your part) you'll have to eat the $200 and you can't charge it back to your present tenant as you allowed him to change his mind.
To avoid such issues in future, best you hone up on your state's LL/tenant laws and have a competent attorney draw you up a good lease agreement. Good luck!
Why do you let your present tenant stay? He gave notice and I assume the present tenant is on a month to month...what if he gives notice next month, then you need to find a new tenant and are out of the $ 200.00...
I would keep your present tenant to his move out notice....JMO!
You totally owe the $200 to the new tenant you broke the contract with. You can ask the present tenant to either pay some or all the fee for the broken agreement, but I don't think they are obligated to. They didn't have any agreement with you nor the new prospective tenant to cover that cost. I'm just curious, how long have you have the current tenant as a renter?
An agreement to lease a property is signed by myself (LL) and proposed tenant 30 days before the property is to be occupied. Dates for deposit and rent to be paid are specified in the lease to be paid at a future time before move in. Three (3) days later, current tenant decides they want to remain in the house. LL withdraws agreement from newly proposed tenant. No monies have been paid, but the terms in the agreement specifically state that if LL cancels the agreement to rent to this tenant, he will be liable for $200.00 as cancellation fee. Because of the three day period and fact that no money was exchanged, Is the landlord obigated to pay the proposed tenant the canellation fee. If so, is the current tenant liable for a reletting fee since they had given a formal written notice to vacate which prompted us to seek new occupants for the property.
I hope someone can help me with this situation as my husband and I are in a bitter disagreement over this issue.
You can tell the current tenant that if he wants to stay he need to reimburse you $200, or else he must leave as per his notice.
I would tell the current tenant they have given notice I have a new tenant please vacate. Sorry but you ( old tenant) got the wheels moving and made me go through the motions of finding a new renter you're SOL.
As far as I am concerned you're gettin off easy by only settling for $200. Next time ALL deposits and rent payment must be paid in full before signing a lease make sure you do a background check a full one. . While I am a nice guy business is still business and I will hold up my part of the bargain and I expect you to hold up yours. If you can't then we need to part ways. Nothing personal its business
jdm and Electrician: This is a 3 year old thread ...
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