A tenant for a property I manage entered into a lease with the landlord and paid a security deposit and first month’s rent. The day before the date the lease period began, the tenant notified me that he had changed his mind and no longer wanted to rent the property. The tenant asked me to send the security deposit and first month’s rent to his new address, but the landlord wants to keep the funds. Can the landlord do this?
Maybe. The landlord has an obligation to secure a satisfactory replacement tenant. A tenant may also attempt to locate a replacement tenant. If a satisfactory replacement tenant who can move in by the lease’s commencement date is not found, the landlord may hold the tenant in default and exercise the remedies in Paragraph 27 of the Residential Lease. This may allow the landlord to keep the security deposit and first month’s rent.
On the other hand, if the landlord does find a satisfactory replacement tenant who can move in by the commencement date, the landlord may only deduct from the security deposit and the first month’s rent either a sum agreed to in the lease as a cancellation fee or actual expenses incurred by the landlord in securing the replacement tenant.
It seems to me that since the tenant entered into a lease agreement that the landlord could also accelerate the rent the property remains ujnented.
In the instance above you have a signed lease. What if the application has been accepted, but, the lease has not been signed?
My thoughts as a previous property manager. A contract is a ‘signed legal document’. Until the lease is SIGNED, the tenant/landlord are under no obligation. The application has been accepted does not indicate anything other than ‘the application has been accepted.” Even if it was accepted, it still needs to be verified and approved before the next step is taken and a lease is signed.
When we had the “Agreement for Application Deposit and Hold on Property”, it spelled out that the Approved Applicant could forfeit the Deposit if they did not sign a Lease within (x) hours of the Approval or in the event that they Withdrew. After that form went to the wayside, there is nothing binding an approved applicant UNTIL/UNLESS they sign a Lease – so there is BIG incentive to get applicants approved quickly and have them sign the binding Lease.
Imagine that you have paid the tenants agent for find a qualified tenant, the agent has done there job and should be compensated, it is not there fault the tenant backed out. I do believe a replacement satisfactory tenant should be sought, and any expense, other agent, your company commission, marketing, lost rent, Etc., should be taken out of any funds you have in possession of the future tent.
I’m looking forward to the legal response on this one (Charles Hance above). What if agents already have been paid? Lease is signed, so contract is done.
Had it happen to a couple we leased when the girlfriend got to the house and told her boyfriend she can’t go thru with this and refuse move in. He didn’t want the house either but he was the one with credit so he got stuck with the bill. It took 2 months to find a new tenant and that died before move in so poor guy had to pay 4 months rent without even moving in. He didn’t even get security deposit back as we charged to secure new tenant. Owner was happy we did our job.
I think in John Pugh case the landlord should have been more human. It is not always the case just because the contract says he tenant should be obligated to pay rent whether his partner situation changed or not. I had similar case , but they were husband an d wife who moved it to a leased house for $2500/month. two months into the lease, the wife left and filed for divorce. My tenant called me asking for help as he could not pay the rent all by himself. I advised him to talk to the landlord and explain the… Read more »