What To Do When Your Tenant Breaks Their Lease

 

man wearing a suit sitting in a table ripping up a contract

My Tenant is Breaking the Lease and they don’t seem to care about it.

You’ve done everything you can to make them happy.

Even completing work orders that didn’t need to be completed just to make them happy.

You just completed the second story on the doghouse for the “best friend” Cuddles AND NOW they have the nerve to submit a 30 day notice three months before their lease ends and is blaming YOU.

The worst part about it . . . they don’t even seem to care!

Whether this sounds familiar to you or you just recently rode by your house and found the opposite…no tenant, no family, just a vacant house…this article was written to help you navigate the muddy waters and decisions you must make.

Hopefully delivering you answers and at least knowing the right questions to ask.

You find out that once you’ve been a landlord for a while, anything can happen!

We are going to cover subjects like – when you can and can’t stop charging rent, how to charge out for repairs and abandonment.

* Please know this does not constitute legal advice and as always, consult someone who is competent in Landlord Tenant Law.

  Scenario #1: They actually submit notice, but it is early.

Businessman sitting in an office reacting in shock to the contents of a letter that he is reading raising his hand to his mouth

Let’s say your tenant submits notice to move and you can tell by the way they submit notice that they have no intention of paying past the move date.

If this is the case, do your best not to give the tenant a sermon on responsibility, promises and living up to the obligations they make.

Keep in mind the law is on your side and no matter what they say or think, they still owe you money for the time they promised to pay you in the lease.

The best thing to do is get the house back as quickly as possible. Once the tenant surrenders the keys to you or calls you and tells you he or she is out, then you may take possession of the property.

We actually ask them to physically turn in keys. The act of it makes surrendering possession more believable.

  Scenario #2: You just rode by the house and found it vacant.

The alternative or second story is that you just drove by the house, probably because you haven’t heard from your tenant in decades, to find that nobody is living there.

Empty house interior. Spacious family room with clean carpet floor and exit to walkout patio

The first thing you have to do is PROVE that nobody is living there.

When our managers find a house in this condition, they are taught to walk up to the house and knock on the door.

Typically, you can tell if there is no furniture is in the home. If there appears to be no furniture in the home, you may enter to see if there is furniture anywhere else in the home.

No furniture anywhere in the home, means nobody lives there and that is an easy one . . . you can take possession.

Typically, they aren’t that easy, because not only did they leave you owing money, they also left you a bunch of trash to dispose of.

The problem is you are certain it is crap, but not certain whether they want it or not or if they are coming back for it.

In this case, it is best to leave the house and leave an eviction notice (either for rent due or for material non-compliance) on the door you assume they enter by.

Give it 7 days, if the notice is gone, you can assume someone is living in the home and will need to take steps to evict. If the notice is still on the door, then you may take possession.

It is also very important to document this process the whole way via video or pictures.

In Alabama, you have no obligation to their stuff if they’ve abandoned it and you document they have. I know this varies from state to state. We usually donate it, take it to the dump or leave it at the street.

                   Now that you have your house back.

Let’s assume you’ve worked your way through one of the above two scenarios and now you have possession of the house while the tenant still has time on the lease.

Your first step is to do a walk through of the home and go ahead and itemize the things you are going to charge the tenant for their security deposit.

DON’T SEND THEM ANYTHING YET.

This is only the first time you will do this and you will do it again later. You will probably need to also have the utilities switched over. Don’t worry, they will have to pay you for these as well.

Since possession is surrendered, go ahead and have the work done to the house to get it ready to rent again.

You actually have an obligation to be working towards renting the home per Landlord Tenant law in Alabama. Work through your get ready/rehab process and market the home as you normally would.

Once the home is leased, there will be a point where the new tenant will begin paying rent.

This is an important day, because that is the last day you will charge the previous tenant for rent. That doesn’t mean they shouldn’t pay a penalty for leaving early in excess of the prorated rent, sit tight and we will get there shortly.

Before your new tenant moves in you will need to do another walk through, we call it a Move-in walk through to make sure the home is ready.

This is the time you will make certain you didn’t miss anything you should have charged the tenant on the first time through.

One question that often comes up is, “What happens if there is an issue, like theft or water damage, that comes as a result of the tenant NOT being in the home?”

Obviously, you should do everything you can to avoid this happening, but I believe that this is something you SHOULD add to your move out accounting and charge the tenant’s security deposit.

The day the new tenant picks up keys and begins paying rent, your clock begins ticking (you have 60 days in Alabama) to get the tenant’s security deposit accounting back to them.

Please don’t screw it up at this point!

You need to make sure you go through the natural flow of a regular tenant move out. Make sure you charge for all the costs you incurred because they moved early.

A few ideas are:

  • Rent (until the day before the new tenant moved in)
  • Late fees (for every month they haven’t paid you)
  • Utilities
  • Property damage
  • Termination fee (I’d suggest one month’s rent)

You should treat this like a normal move out and mail the information to the last known address, which is probably your rental home.

After we mail this letter, we typically give them two weeks to respond. If they don’t respond, you will need to make a decision whether to spend the money and pursue them through the court system or perhaps send them to collections.

We cover this topic in another blog article.

                            The bottom line.

Everyone’s situation is different and there are a lot of different issues that can pop up that would require you to change direction to another strategy.

So I’m going to reduce the whole thing to some points that should keep you out of trouble:

  1. When in doubt on whether a property is occupied, always default to assuming it is occupied. I’ve actually moved someone’s stuff out and they hadn’t moved out – they were still living there!
  2. When accounting for the security deposit, use reasonableness for all your charges and a judge will look fondly on you.
  3. Lastly, probably my most given advice, attempt to be as objective as possible when dealing with the tenant. They aren’t treating you fairly, but this is a business and you should treat the issue as a business person.

                          I hope this article was helpful

If you find yourself in this position and need a little help with your next step, give us a buzz.

We would love to help you get that person out so you can start getting rent from a good, long term paying tenant versus a tenant who is breaking the lease.