Tenant is breaking lease early, what are they responsible for?

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Tenant is breaking lease early, what are they responsible for?

Joshua Fallin
Investor · Littleton, CO · Member since 2017 · 6 posts · 2 votes

Hey BP Community,

I own a townhome in Littleton, CO (Jefferson County). My current tenant has bought a home and said she is moving out at the end of this month (September). Her lease is not up until the end of November. Instead of re-renting the property, I’ve decided to sell it. Is the tenant still responsible for the lease until we have closed on the property (or the lease expires, whichever is sooner)? Or is the tenant no longer responsible for the lease upon listing it?

Any guidance here would be greatly appreciated. 

Many thanks,

Josh

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y

@Joshua Fallin

Tenant is still responsible but if it were me and they were a good tenant not sure I would penalize them because of the benefit of being able to sell a house in September vs holiday season.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Quote from @Joshua Fallin:

    Hey BP Community,

    I own a townhome in Littleton, CO (Jefferson County). My current tenant has bought a home and said she is moving out at the end of this month (September). Her lease is not up until the end of November. Instead of re-renting the property, I’ve decided to sell it. Is the tenant still responsible for the lease until we have closed on the property (or the lease expires, whichever is sooner)? Or is the tenant no longer responsible for the lease upon listing it?

    Any guidance here would be greatly appreciated. 

    Many thanks,

    Josh


     Correct. The tenant is responsible for the lease until the property closes.

    1Reply
  • Joshua Fallin
    OP
    Investor · Littleton, CO · Member since 2017 · 6 posts · 2 votes
    4y

    Thanks @Account Closed! That’s what I thought, but I wasn’t sure if things changed if you sold vs re-renting. Appreciate it!

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Joshua Fallin

    Tenant is still responsible but if it were me and they were a good tenant not sure I would penalize them because of the benefit of being able to sell a house in September vs holiday season.

    7e investments53 Reviews
    WebsiteView Page
    2Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    I'd charge them for the 30 days' notice, but after that, I wouldn't. You are selling it and having it empty will be beneficial.  Get it listed now and hopefully it sells quickly. Let her know that you will have showings and you will do your best to minimize the disruption and in exchange, she will only be responsible for rent for the 30 days' notice, not until the end of the lease.  Selling it now vs Nov or Dec will be easier.

    2Reply
  • Joe Martella
    Rental Property Investor · Cherry Hill, NJ · Member since 2015 · 626 posts · 495 votes
    4y

    I would caution you on the lease.  I am not a lawyer, but if you hold the tenant to the lease then you may have to sell the property subject to the lease, which means that the buyer may not be able to immediately move in.  

    Does it matter?  If the property is in showable condition, I would let the tenant out of the lease early with no penalty if I am able to list and they will show the property while they are still there.  Otherwise, I would get the 30 days rent and move on.

    0Reply
  • Tim Herman
    Member since 2018 · 2k+ posts · 1k+ votes
    4y

    @Joshua Fallin  in most jurisdictions you will have the obligation of trying to rerent the property to mitigate loss to the tenants. Just like the tenant has the obligation to pay rent until another tenant is accepted. If you don't want to be a landlord then accept the September payment and list the property. 

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  • Erin AzarPro Member
    Rental Property Investor · IN · Member since 2021 · 47 posts · 36 votes
    4y
    Quote from @Theresa Harris:

    I'd charge them for the 30 days' notice, but after that, I wouldn't. You are selling it and having it empty will be beneficial.  Get it listed now and hopefully it sells quickly. Let her know that you will have showings and you will do your best to minimize the disruption and in exchange, she will only be responsible for rent for the 30 days' notice, not until the end of the lease.  Selling it now vs Nov or Dec will be easier.


     I will go with this advice. No need to punish a good tenant, when it turned into an opportunity for you. Good Karma :)

    0Reply
  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    4y
    Quote from @Joshua Fallin:

    Hey BP Community,

    I own a townhome in Littleton, CO (Jefferson County). My current tenant has bought a home and said she is moving out at the end of this month (September). Her lease is not up until the end of November. Instead of re-renting the property, I’ve decided to sell it. Is the tenant still responsible for the lease until we have closed on the property (or the lease expires, whichever is sooner)? Or is the tenant no longer responsible for the lease upon listing it?

    Any guidance here would be greatly appreciated. 

    Many thanks,

    Josh

    Keep in mind it looks like one month difference. So, all of the other comments aren't considering this. If she is moving out at the end of September, then it is available Nov 1. but she still owes for November.

    I'd advertise right away, explain that it is coming available and start looking  for potential buyers.  It takes time to close on a purchase and someone will want to get in before the holidays.

    Meanwhile, it appears that the most you would be collecting for anyway is  the month of November since that is when the lease runs out. If it closes earlier you go to a per diem for her lease and she pays only for the days up to closing or November 30 whichever occurs earlier. 


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  • Joshua Fallin
    OP
    Investor · Littleton, CO · Member since 2017 · 6 posts · 2 votes
    4y

    A massive thank you to everyone's response! You all have provided great insights and have allowed me to consider alternative options I hadn't originally considered. I'll be reaching out to the tenant today to discuss options that we both can agree upon and be a win-win for both parties. 

    Many thanks, 

    Josh

    1Reply
  • Mya Toohey
    Real Estate Agent · Tampa Florida · Member since 2013 · 630 posts · 303 votes
    4y

    @Joshua Fallin

    It depends on how you wrote the lease. I would never make tenants stay in a house I've listed because most will sabotage it anyway. You can sell with lease in place and make the new owner uphold your lease or give new owner option to buy them out. CASH FOR keys. I'm in the Tampa Florida market and very seldom do I see an occupied home in good shape. Maybe that's just here, but, good homes with good tenants don't just get sold.

    0Reply
  • Michael Haynes
    Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes
    4y

    Hello Joshua Fallin, I had Rentals in Tampa, Florida for 30 years on my own. I would consider myself lucky if they moved out and did not wreck the property on the way out. "You can't get blood from a stone." If you sue in Small Claims, there is no way to Collect. Consider yourself lucky and just Sell, Sell, Sell. 

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