Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Landlording & Rental Properties
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 9 years ago, 08/21/2015

User Stats

1,887
Posts
1,261
Votes
Andrey Y.
  • Specialist
  • Honolulu, HI
1,261
Votes |
1,887
Posts

Tenant moves out early, how would you handle this?

Andrey Y.
  • Specialist
  • Honolulu, HI
Posted

I had a tenant that unfortunately had some financial difficulty and had to move out (her husband lost his job). I suspected this vaguely last month when the rent came in two separate installments.

She has payed up until the day she moved out (1 week into a new month, she is supposed to be out by tomorrow at the latest). She kept offering to pay an extra month if she needed to, which I declined. If she can't afford the rent, I don't want her to come up with more money.  They have only stayed 7 months out of their 2 year lease.

Legally in Honolulu or Hawaii, correct me if I am wrong, early termination of lease is forfeiture of the deposit? I will also lose some revenue in getting new tenants, possible some repairs (haven't looked yet). Thoughts on this?

User Stats

1,887
Posts
1,261
Votes
Andrey Y.
  • Specialist
  • Honolulu, HI
1,261
Votes |
1,887
Posts
Andrey Y.
  • Specialist
  • Honolulu, HI
Replied

@Royce Talbo

User Stats

726
Posts
387
Votes
Matthew Kreitzer
  • Attorney
  • Winchester, VA
387
Votes |
726
Posts
Matthew Kreitzer
  • Attorney
  • Winchester, VA
Replied

You should absolutely consult with an attorney licensed to practice in Haiwaii or the state whose laws govern this lease agreement. Generally speaking, a tenant is liable for the entirety of the lease term unless the lease allows for early termination and those allowances are satisfied. Generally speaking, most states allow for retention of the security deposit to help satisfy this amount. However, there are specific procedures one must normally take before unilaterally crediting against the security deposit. It may be wise to seek an attorney to begin an action for breach of the lease agreement, while seeking out new tenants.

You should not operate on any advice I just gave, as special considerations in local law may impact your particular case. This is merely for educational purposes, and you should consult a local attorney.

CLOSED Title logo
CLOSED Title
|
Sponsored
CLOSED Title is the Investor Friendly Title Company CLOSED Title, founded by real estate investors. Double closings, assignments, we do it all.

User Stats

218
Posts
104
Votes
Royce Talbo
  • Investor
  • Kaneohe, HI
104
Votes |
218
Posts
Royce Talbo
  • Investor
  • Kaneohe, HI
Replied

@Andrey Y. when you say 

"She has payed up until the day she moved out (1 week into a new month, she is supposed to be out by tomorrow at the latest)" does that mean she paid up until the first week of this month and she is living rent free now or she paid until the first of next month and is leaving early?

I have never had a tenant quit early only for military purposes which I returned their security deposit.  As for your situation this would fall under the to compensate for damages by a tenant that quits the dwelling unit.  I would think that if she is paid up till 1st week of next month there shouldn't be any damages to you as you could probably find someone to fill the unit by then.  If this is the case you should return her security deposit less any repairs you had to make.  Remember though that it has to be returned within 14 days and you have to itemize it or else they get back the full amount.  The other thing you should note is that if you wrongfully withhold a security deposit and they go after you for it they are allowed 3 times the amount.  As for the prorating part I am not too sure about as she is actually terminating early. 

If she is living rent free right now then it would fall under the To remedy tenant defaults for damages, for failure to pay rent or for failure to return keys at termination of the rental agreement.  This would allow you to withhold security deposit to compensate for your loss.  

User Stats

106
Posts
19
Votes
Donald Hodge
  • Real Estate Investor
  • Kaneohe, HI
19
Votes |
106
Posts
Donald Hodge
  • Real Estate Investor
  • Kaneohe, HI
Replied

Andrey, we had a similar situation and per the usual HI lease, you can keep the deposit to defray your costs for re-advertising, etc. especially since they had a two year lease.  They are in breach of contract, but the best you can do is retain their security deposit.  The landlord-tenant rules you can find on line spell it out pretty clearly.  

User Stats

1,887
Posts
1,261
Votes
Andrey Y.
  • Specialist
  • Honolulu, HI
1,261
Votes |
1,887
Posts
Andrey Y.
  • Specialist
  • Honolulu, HI
Replied
Originally posted by @Royce Talbo:

@Andrey Y. when you say 

"She has payed up until the day she moved out (1 week into a new month, she is supposed to be out by tomorrow at the latest)" does that mean she paid up until the first week of this month and she is living rent free now or she paid until the first of next month and is leaving early?

I have never had a tenant quit early only for military purposes which I returned their security deposit.  As for your situation this would fall under the to compensate for damages by a tenant that quits the dwelling unit.  I would think that if she is paid up till 1st week of next month there shouldn't be any damages to you as you could probably find someone to fill the unit by then.  If this is the case you should return her security deposit less any repairs you had to make.  Remember though that it has to be returned within 14 days and you have to itemize it or else they get back the full amount.  The other thing you should note is that if you wrongfully withhold a security deposit and they go after you for it they are allowed 3 times the amount.  As for the prorating part I am not too sure about as she is actually terminating early. 

If she is living rent free right now then it would fall under the To remedy tenant defaults for damages, for failure to pay rent or for failure to return keys at termination of the rental agreement.  This would allow you to withhold security deposit to compensate for your loss.  

 So she basically said we would be out 1 week into this month, and I asked her to just pay that week because I didn't think she would be able to pay for the month. She had thought she owed me another month but I said its okay, I don't want her in debt even more.

User Stats

1,887
Posts
1,261
Votes
Andrey Y.
  • Specialist
  • Honolulu, HI
1,261
Votes |
1,887
Posts
Andrey Y.
  • Specialist
  • Honolulu, HI
Replied
Originally posted by @Donald Hodge:

Andrey, we had a similar situation and per the usual HI lease, you can keep the deposit to defray your costs for re-advertising, etc. especially since they had a two year lease.  They are in breach of contract, but the best you can do is retain their security deposit.  The landlord-tenant rules you can find on line spell it out pretty clearly.  

 Thank you, Donald. That's what I was looking for. I am doing the first showing tomorrow, hopefully I don't come in to some surprise (I doubt it as these were genuinely nice people). I do expect some minor turn-over costs.

User Stats

1,172
Posts
666
Votes
William Allen
  • Investor / Wholesaler
  • Nashville, TN
666
Votes |
1,172
Posts
William Allen
  • Investor / Wholesaler
  • Nashville, TN
Replied

If it was me I probably would have accepted her month of pay, try to re-rent out the house as quickly as possible and refund her the difference of what it cost me of vacancy before I could get it filled.  Between that month and the security deposit you will likely have more money leftover that could go back to the previous tenant if you wanted to.  But if not, you are covered on your expenses.  

However, the local landlord/tenant laws would determine what I could and couldn't do.  It sounds like you are a good guy and trying to help them out as I'm sure I would be too, but I would want to cover my business expenses first and then refund them the residual if there was some.  That way you are a nice guy and you aren't paying them out of your own pocket. 

User Stats

746
Posts
372
Votes
Jacqueline Carrington
  • Investor
  • Corona, CA
372
Votes |
746
Posts
Jacqueline Carrington
  • Investor
  • Corona, CA
Replied

What does your lease say? Have you researched landlord-tenant law in Hawaii? If not, I would consult an attorney for your best course of action.

In Connecticut, the resident is responsible through the end of their lease term unless other agreements or terms of the lease allow for an alternative.