Holding A Tenant Responsible For Breaking A Lease

Discussion in 'Landlord & Rental Property Questions' started by In the running, May 31, 2015.

  1. In the running

    In the running Well-Known Member

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    How strict should one be when this happens? Let's say that the lease is for one year with a $750 a month rental payment? After 6 months they say they have to move out of state to help a sick family member, and that can be proven. Would you hold them to the last six months of rent?
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Personally, if they have a valid reason such as that and are willing show me proof, I'd probably let them off the hook.

    If they cannot prove this, I'd assume they were blowing smoke and probably hold them to it and try to get most or all of the money owed.

    This is assuming they were a good tenant. If they were a bad tenant I was glad to get rid of, I'd be glad to let them go.... or if I had somebody else waiting to rent the property that was willing to pay me more. ;)
     
  3. Fredrick Jones

    Fredrick Jones Well-Known Member

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    Probably it is just better to let them go, you should have a damage deposit from them, they should have to forfeit that. If the rent is only $750 per month, you are going to lose a potential of $4500. The cost of taking them to court and trying to collect will be more then it is worth. On the other hand you hopefully will be able to rent the place out within a month or two.

    If it was a large amount of rent, they I would say take legal action. But one has to be practical.
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    If the tenant seems like a decent person and you've had no trouble with him etc... and seeing as you said they can actually prove that they really need to be somewhere else and for a very good reason, then I think it's only natural to let them off the hook. This might not seem like a very business like decision but hey, we are human afterall and they certainly have other stuff to worry about right now, so I'd just let it go. Chances are in a month or so you will already have another tenant.
     
  5. Sunflogun

    Sunflogun Well-Known Member

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    I agree, if there is proof and we have a decent relation with the tenant, no reason why we should hold them to the deal, even more if it's an health issue. If there is no way to prove it, now that is a whole new matter.
     
  6. pwarbi

    pwarbi Senior Investor

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    I think a lot would depend on the tenant. If they've always been fair enough with you in the past and a situation like that comes up, then personally I wouldn't hold them to the rest of the term. People move and come and go for a lot of different reasons, that's just how the market is these days.
     
  7. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Usually most people will cough up what they owe after a phone call or 2 and a letter or 2 just hinting at or mentioning possible legal action / judgement / damage to their credit, etc. Not all people, of course.

    But I agree that if someone owes a relatively small amount of money, it doesn't make sense to spend more than what they owe you (plus the wasted time and added stress) trying to get it back.

    If someone owes something like $4500, simply spending a few hundred bucks having an attorney make a call and send a letter, and perhaps even filing a judgement that they'd have to carry around on their credit report for several years would probably be as far as you'd want to bother with them.
     
  8. Fredrick Jones

    Fredrick Jones Well-Known Member

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    Sending them a nastygram as I call it does not cost much, so spend a limited amount of money as you said. It also depends on where you live, the rules on collecting and who you are going against. They differ from country to country and within USA and Canada they differ from state and province. So in some states and provinces it is easier to collect then in others.

    So if you are going up against a lawyer, if he says he isn't going to pay ask him nicely what he will settle for. If he says nothing just walk away. Worst case scenario I saw was a lawyer who owed over $100 K. It actually went to court, and he was ordered to pay. Then somehow he managed to figure out some sort of loophole so they couldn't collect the $100K. So about the only think the victim could do was put a sign saying Atty XXXXX owes $100K and cite the court case. This sign sat there for close to 5 years and he still didn't pay.

    Unless you are seeking legal advice from lawyers, don't do business with them. If they are good they will figure out some way to screw you legally. In the case where the lawyer didn't pay his bills, it probably counted as free advertising. If I got into credit problem I would probably hire a lawyer like that.
     
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I meant I'd hire the lawyer to file a legal judgement for the money owed to me by the deadbeat tenant or whoever. It may not ever get the money back, but at the least it messes up the deadbeat's credit. But you will often get the money back if the deadbeat ever tries to sell any property he owns or refinance a mortgage or whatever - the sale will generally not go through without the stipulation that money to pay the judgement is taken out of the proceeds of the sale before the deadbeat ever gets a penny of the proceeds.

    An unpaid judgement will make it harder for the deadbeat to buy property or automobiles or get loans.

    I have a personal attorney and other attorneys I know well who I use for certain things. I don't have the time nor the skill set to try to be my own lawyer.

    Attorneys are sometimes a necessary evil and can be very useful - paying an attorney $100 for a half hour's work to look over an important document such as an oil lease or other complicated legal agreement before I sign it is a much better idea than getting screwed in such a business deal over some technicality and losing thousands or millions because of it - it's happened to people in my own family generations ago. $100 or so for a little legal work is a very cheap insurance policy when much is at stake.
     
  10. Fredrick Jones

    Fredrick Jones Well-Known Member

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    It depends on where you are, do not assume the laws are the same from state to state never mind country to country. Example in most places a post dated cheque is viewed as a promisary note. The word promise in most place means it is per say not legally binding. So if I write a cheque dated today for $100, the means I am stating I have $100 in my bank account. If I write a post dated cheque that means I promise to have $100 in my account. But in some places, a promise is viewed as legally binding. So if the post dated cheque bounces you can be criminally charged.

    The same holds true with collections and credit ratings :) So where I am right now, even credit card companies have problems collecting. The reason is that it is hard to track transactions, and so if a person sells a property unless you know it is happening you can not collect. This is where people can run into legal problems in foreign countries.

    Luckily where I am lawyers are cheap, around $10. And they like to talk about past cases and drink. So usually I buy them drinks and they give me free advise :)
     

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