I'm new to real estate not sure what to do

[Brian Gallagher]

Bought my first rental (5plex) in June. Last week had a tenant (that came with the building) decided he wants to move to Florida with 7 months left in his lease. Asked if someone could take over his lease or be added and sent me a guys application. ( very bad app, just got evicted and left the past rental in bad shape) so I told him guy couldn't move in. Said if he wanted to leave I needed 1 full months rent and he would forfeit his security deposit also said if I was able to rent before the month ended I would return that part of the rent. ( he also owes me some $ for not switching his electric bill right away)

He freaked out and thinks that is very unfair he should loose his security deposit and is trying to find another person to take over his lease now. Not sure what to do.

[Nathan Gesner]

Quote from @Brian Gallagher:

You don't say where this is located. The laws are different for each state and it's important you figure out what the laws are. I recommend you check out the website for NOLO where they explain the laws for each state. Even better: buy "Every Landlord's Legal Guide" by NOLO. Written by attorney investors, it's full of practical advice pertaining to management of investment property, has sample forms that can be edited, and - most importantly - they tell you what your primary state laws are and where you can read them. It's updated every year and is the best $40 you'll spend as a Landlord. 

But you need a solution now. The law is clear: your Tenant is obligated to fulfill the full term of the lease agreement. If they leave, they remain responsible for rent, utilities, or any other terms of the lease until a new Tenant takes over. The Landlord has to make an effort to find a replacement tenant and minimize the cost to the departing tenant.

You do not have to accept anyone he sends you. Make it very clear that any replacement tenant will have to submit to your screening and approval. Until you find someone that meets your qualifications, the current tenant remains responsible.

I offer my tenants two options:

1. Tenant notifies me of their move-out date at least 30 days in advance and pays me a termination fee equal to one month of rent. They pay rent through the last 30 days and they have to let me market and show the rental to other tenants. When 30 days is up, they move out. I handle the deposit like I would a normal termination, and the Tenant leaves without any further obligation. This works well because it gives the tenant a clean break and good reference, and I can usually find a new tenant to take over shortly after they move out which means more money in my pocket.

2. Stay on the hook until I find a new Tenant. I can usually place a new tenant in 2-3 weeks, but sometimes it can take another 1-2 months. This can get really expensive for the departing tenant so most of them don't take this option.