Rental Property: Legal Question

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ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Oct 29, 2011 8:50 AM
I own a rental property, which was our old place of residence, and I was blindsided last evening by our renters. They are nearing the end of the 6th month of their 1-year lease, and the lady calls and says, "we have an opportunity to buy a house on land contract, and he said the only way we can ensure it is to do it by the first. So, we'll be moving out this weekend."

Rent due: 1st of the month
1st of the month: Next Tuesday
Notice: 5 days

Now, we hold the security deposit still, but my question is, do I still make them pay rent for the month of November, considering they signed a 1-year lease? Here are some word-for-word terms from my contract:
- The term of this rental agreement shall be binding for a period of 1 year commencing at 12:01 AM on April 1, 2012, and shall continue from month to month thereafter with payment and acceptance of each month's rent.

- If Resident vacates this premises before the period of six months, Resident agrees to forfeit the $XX security deposit.

- A security deposit of $XX was received on April 1, 2011. This will be returned to the Resident within 45 days of vacating the premises, provided all terms of this agreement are honored and premises is left in the same state of cleanliness and repair it was in when rented.

- This agreement is automatically renewed from month to month upon payment and acceptance of rent, but may be terminated at any time after a period of one year by either party giving to the other in writing, 30 days prior notice of intention to terminate. Resident agrees to pay rent and utilities for the 30 days after termination notice is given. During this 30 day period, Owner or his agents shall have the right to permit prospective Residents the opportunity of reasonable inspection.
Now, we originally had a 6-month agreement b/c we were going to keep the house on the market for sale. They seemed like nice people, so after the first month, we took the house off the market and asked them if they wanted to sign a 1-year (instead of 6 month) lease. They were happy with that, and said yes (04/30/11). So, I changed the term lengths at that time and all parties signed.

QUESTION(s): To you rental property owners, what should I do?

- Should I make them pay for the month of November?
- Should I eat it and use security deposit money to pay for November?
- Should I make them pay, then also keep security deposit, since they didn't fulfill contractual agreements?
Oct 29, 2011 8:50am
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Oct 29, 2011 8:51 AM
Also, my wife and I take a hit on this rental every month. Mortgage is $675/month and we charge them $650. Not big, but we are not making one dime on this house.
Oct 29, 2011 8:51am
bradmaynard's avatar

bradmaynard

Senior Member

277 posts
Oct 29, 2011 9:14 AM
You tell them to pay for the month of November because you had five days notice at the end of the month and now instead of eating 25$ you are potentially going to be paying 675$ for a vacated rental property. The security deposit is a judgement call on your part. Also, I'm an extremely nice person, much nicer than the old residence of your rental property. I'll move in if you eat 300$ a month which seems reasonable considering I'm very nice.
Oct 29, 2011 9:14am
B

Bigdogg

Senior Member

1,429 posts
Oct 29, 2011 9:34 AM
Hold them to the full legal terms of their contract. The must pay the full year. If not, take them to court and collect.
Oct 29, 2011 9:34am
DeyDurkie5's avatar

DeyDurkie5

Senior Member

11,324 posts
Oct 29, 2011 9:39 AM
It says you have to be there for a year, or at leats pay for it, but in the next line it says if the renter gets out before six months they eat the deposit. I don't know what to do. Call fan from texas
Oct 29, 2011 9:39am
iclfan2's avatar

iclfan2

Reppin' the 330/216/843

6,360 posts
Oct 29, 2011 9:56 AM
Your contract doesn't make any sense. Why would you give them the security deposit if there for 6 months? Your contract should state you must be there for a year. If I were you, I'd write a new contract next time, keep the security deposit, and make them pay November, or take them to court for the entire 6 months rent.
Oct 29, 2011 9:56am
Belly35's avatar

Belly35

Elderly Intellectual

9,716 posts
Oct 29, 2011 9:56 AM
ernest_t_bass;949081 wrote:Also, my wife and I take a hit on this rental every month. Mortgage is $675/month and we charge them $650. Not big, but we are not making one dime on this house.
hold them to the legal agreement mofo :)


Inspect the property for damage and apply the amount to the sercurity deposit

Mofo Take note: rent $650.00 mortgage $675.00 ( what about the taxes and insurance mofo) you are losing more that you think

I rent a house also $800.00 mo mortgaga less that $420.00 .......I make sure I get my taxes and insurance also within the rent..... cost of living is not cheap higher the rent sometimes the better the renter..:D
Oct 29, 2011 9:56am
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Oct 29, 2011 10:32 AM
Taxes and insurance escrowed. They pay that :)
Oct 29, 2011 10:32am
Commander of Awesome's avatar

Commander of Awesome

Senior Pwner

23,151 posts
Oct 29, 2011 10:59 AM
Upperdeck their toilet. That will show them.
Oct 29, 2011 10:59am
dwccrew's avatar

dwccrew

Not Banned

7,817 posts
Oct 29, 2011 12:38 PM
I own several rental properties so I can give you my opinion and it may or may not help. When I am in a situation in which people leave before the lease is up, generally if they leave the place clean and in good condition, I just keep the security deposit in lieu of the next month's rent. It is less of a hassle than going to court, paying costs and possibly not getting a ruling in your favor (different states have different laws and some favor the tenants moreso than owners).

Consult an attorney if you believe they will owe you enough to make it worth your time and money to go to court. Generally, I believe, they would have to pay on the lease until it is occupied again.

Also, how your lease agreement is drafted makes a difference too. If you have a clause in their that allows them to pay a cancellation fee to get out of the lease, that is always beneficial. I have never really encountered this except once and the people left one month prior to lease expiring, so I just kept deposit and let them go. Any other time I have had someone leave before lease was expired it was because I had to evict them.
Oct 29, 2011 12:38pm
LJ's avatar

LJ

Senior Member

16,351 posts
Oct 29, 2011 12:47 PM
Typically they would pay the remainder of the lease or until the unit was rented out again, whichever comes first. But your agreement looks kind of shitty in the sense that it kind of implies an early termination fee. In your situation I would make them pay the November rent, keep the security deposit, and get a new lease written up.
Oct 29, 2011 12:47pm
lhslep134's avatar

lhslep134

why so serious?

9,774 posts
Oct 29, 2011 1:00 PM
The contract commenced on April 1. That means 6 months from then is October 1.

The additional 6 months added to the lease on April 30, IMO, a court would find an immaterial term modification relative to the substance of the lease, so the 6 month clock didn't reset on April 30. Hence, I don't think you would be able to keep the security deposit. The way the contract is worded says that the security deposit can be kept if they don't meet the full specified performance of the contract. However, since the contract gave them an out after 6 months, if I were them I'd argue they fully performed for 6 months, and the ambiguous relation between full performance and the ability to leave after 6 months leaves open that question, but I feel like they would be entitled to their security deposit back.

In terms of November payment....EDIT: Ohio statute will require them to pay.

JMO
Oct 29, 2011 1:00pm
HitsRus's avatar

HitsRus

Senior Member

9,206 posts
Oct 29, 2011 1:02 PM
^^^^This. They owe the rent for November because they did not give you 30 days....and the security deposit because they did not fulfill the rest of the lease. You can drop the security deposit if you can get it rented quickly.
Oct 29, 2011 1:02pm
LJ's avatar

LJ

Senior Member

16,351 posts
Oct 29, 2011 1:08 PM
lhslep134;949267 wrote:
In terms of November payment, I think you may be SOL.
Except Ohio Law says that you must give 30 days from payment date on vacating. So say they give notice on Nov 3rd, by Ohio Law that is a 59 day notice and they are on the hook for rent until Jan 1
Oct 29, 2011 1:08pm
lhslep134's avatar

lhslep134

why so serious?

9,774 posts
Oct 29, 2011 1:14 PM
LJ;949277 wrote:Except Ohio Law says that you must give 30 days from payment date on vacating. So say they give notice on Nov 3rd, by Ohio Law that is a 59 day notice and they are on the hook for rent until Jan 1
Okay so then it's not an issue of collecting November rent, per Ohio statute (we don't learn about those in Arizona :( ). So at least he can collect 1 payment, but I still stand firm that he has no basis for collecting security deposit.
Oct 29, 2011 1:14pm
LJ's avatar

LJ

Senior Member

16,351 posts
Oct 29, 2011 1:19 PM
lhslep134;949283 wrote:Okay so then it's not an issue of collecting November rent, per Ohio statute (we don't learn about those in Arizona :( ). So at least he can collect 1 payment, but I still stand firm that he has no basis for collecting security deposit.
Yeah he does. They have a 1 year lease. In Ohio they would have to pay the remainder of the lease or until the unit is rented unless they is an exit fee. The exit fee was offered until 6 month, then it gets shady after that. The judge would award him November rent and the security deposit. 50/50 on the remainder of the lease, just because of the exit fee that was offered at one point.

Also it's standard procedure in many areas for the security deposit to be awarded on a broken lease.

The deposit is earnest money on completing the lease and damages, not just damages.
Oct 29, 2011 1:19pm
J

jmog

Senior Member

6,567 posts
Oct 29, 2011 1:19 PM
Having done this myself once, I know for a FACT you can charge them the full 1 year lease.

I was the renter in my case. I had to move from Columbus to Akron area after 9 months, gave the company a full months notice and still had to pay the remaining 3 months on the 1 year lease.

You have the right to get the whole final 6 months, even if you are able to fill the rental in 2 or 3 months.
Oct 29, 2011 1:19pm
LJ's avatar

LJ

Senior Member

16,351 posts
Oct 29, 2011 1:21 PM
jmog;949289 wrote:Having done this myself once, I know for a FACT you can charge them the full 1 year lease.

I was the renter in my case. I had to move from Columbus to Akron area after 9 months, gave the company a full months notice and still had to pay the remaining 3 months on the 1 year lease.

You have the right to get the whole final 6 months, even if you are able to fill the rental in 2 or 3 months.
The problem is he offered an exit fee at one point.

Also, you got hosed if they kept charging you after it was rented. That is illegal.
Oct 29, 2011 1:21pm
lhslep134's avatar

lhslep134

why so serious?

9,774 posts
Oct 29, 2011 1:25 PM
LJ;949288 wrote:The exit fee was offered until 6 month, then it gets shady after that. The judge would award him November rent and the security deposit. 50/50 on the remainder of the lease, just because of the exit fee that was offered at one point.
.

Yeah I deleted my post after reading the fact pattern again. The only way to get the security deposit back is full performance of the terms, which state a period of 1 year. Also, the fact that termination can occur at any point month to month after 1 year is a direct implication of the intent to be bound for 1 year.
Oct 29, 2011 1:25pm
LJ's avatar

LJ

Senior Member

16,351 posts
Oct 29, 2011 1:40 PM
LJ;949291 wrote:The problem is he offered an exit fee at one point.

Also, you got hosed if they kept charging you after it was rented. That is illegal.
I will expand on the bolded part...

The idea is to make the landlord whole, not to get them double rent for a few months. Once that same unit is rented again, in the eyes of the law, the landlord is now whole. Also, every normal marketing effort has to be made to rent that unit out.
Oct 29, 2011 1:40pm
thedynasty1998's avatar

thedynasty1998

Senior Member

6,844 posts
Oct 29, 2011 2:31 PM
You had a horrible lease. Who the hell told you to give them a 6 month option? With that said, you are entitled to money, but it's a hassle to collect. It's not worth hiring an attorney and in all likelihood the judge sends you to a mediator where you will end up agreeing to half.
Oct 29, 2011 2:31pm
lhslep134's avatar

lhslep134

why so serious?

9,774 posts
Oct 29, 2011 2:40 PM
thedynasty1998;949337 wrote:Who the hell told you to give them a 6 month option?.
There isn't a 6 month option. It was a 6 month lease changed to a 12 month lease.
Oct 29, 2011 2:40pm
dwccrew's avatar

dwccrew

Not Banned

7,817 posts
Oct 29, 2011 2:49 PM
jmog;949289 wrote:Having done this myself once, I know for a FACT you can charge them the full 1 year lease.

I was the renter in my case. I had to move from Columbus to Akron area after 9 months, gave the company a full months notice and still had to pay the remaining 3 months on the 1 year lease.

You have the right to get the whole final 6 months, even if you are able to fill the rental in 2 or 3 months.
This is not fact, as you state in your post. This is not even legal, as LJ pointed out.


LJ;949302 wrote:I will expand on the bolded part...

The idea is to make the landlord whole, not to get them double rent for a few months. Once that same unit is rented again, in the eyes of the law, the landlord is now whole. Also, every normal marketing effort has to be made to rent that unit out.
This.
Oct 29, 2011 2:49pm
like_that's avatar

like_that

1st Team All-PWN

26,625 posts
Oct 29, 2011 3:13 PM
Make them pay, keep the security deposit, and bang the wife.

This is the most logical way to go about it.
Oct 29, 2011 3:13pm
Cat Food Flambe''s avatar

Cat Food Flambe'

Senior Member

1,230 posts
Oct 29, 2011 3:15 PM
Legality aside...

If the tenants leave the house in good shape, collect November rent, keep the deposit for early vacation, and call it even. You'll be money ahead of the alternative of legally enforcing the lease.
Oct 29, 2011 3:15pm