Signed Lease but Lessee wants out before move-in date

[Misook Kang]

Seeking advice for a first timer. I listed my home for rent and after 30+ days of reviews and home tours signed a lease on 3/30 with an individual who met my preferences for financial/credit history but could not move in until end of May. I agreed to that move-in date in favor of a tenant with a great credit score, history over immediate/faster tenancy.  Fast forward...lessee texted me out of the blue asking me to call and told me about a pay raise that didn't happen and that he cannot afford the rent and wants out, asked for mercy and grace etc., and mentioned that I can keep the security deposit if I want. 

What would you do in this situation?  We have a signed lease agreement which contains clauses for lease termination (tenant may terminate this lease agreement prior to its Maturity Date due to unforeseen circumstances with an early termination fee equivalent to two (2) months’ rent. Tenant must be up-to-date with full rent amount payments.) and default. I want to be understanding (despite some unwelcome commentary about my rental during a second tour that went on for nearly 1 hour after lease was signed...) and professional, but this sets me back to step one of finding a tenant while maintaining two mortgages/bills and outdoor spaces. 

[Matt Devincenzo]

Your best bet is to allow them to break the lease and keep the security as the early termination fee. My lease is actually structured this way. All the money I collect up front is a holding fee and it is applied to their security deposit upon move in and payment of first month's rent. Whether I hold it one day, one week, or one month I recoup some costs if they were to back out. 

So either send an addendum cancelling the lease and keeping the funds as termination fee, or at least get something in email etc agreeing to that, and then move on with relisting this. I'd also reach out to your prior walk throughs that were interested and let them know the other tenant couldn't move in so you wanted to give them first shot at the place before relisting it.