Tenant sublet house without permission...

[NA Burkart]

I am looking for opinions on this scenario. A fellow investor was looking for some cash for a new investment. I agreed to purchase a SFR from him. It was tenant occupied, managed by a PM that I knew. A good cash flowing property that is in my wheel house of an area. I closed on the property 01/04/16.

I spoke with the tenant numerous times, all was well. The lease was ending on 02/29. We discussed options and she wanted to move out 03/22/16. The agreement reached was she would pay $650, a proration of the month, and turn over the keys on that date. This discussion took place early January.

Then I was unable to reach the tenant. I had appointments with my handyman to do some work, she was unavailable. Finally after a week, I stopped by and knocked on the door. A male subject answered. I asked for the tenant. He stated she was not there and he was the new tenant as of 01/01/16. He produced a lease that my tenant created and signed. She placed an ad on Craigslist and rented the house for $150/week. (A lot less than she was paying)

Fortunately, the person she rented to was a good guy. I advised him not to pay her, for she broke the lease that was in place. I also advised him not to pay me, I did not want him to have any standing to the property. He took very good care of the property.

I spoke with my attorney who advised the tenant broke the lease and therefore forfeited the security deposit.

After numerous discussions with the original tenant I learned she had family issues and felt that was her only option. I honored my agreement with the the original tenant. I was as understanding as I could be. She did not pay the full agreed amount for the the month of March. I deducted that amount and the amount of the gas/electric bill from her security deposit. Check and detailed letter was mailed within the 21 day period.

Original tenant called very upset and is threatening to sue not only me, but the tenant she rented to. She is saying that I was wrong to tell them not to pay her. So she wants over $1000 from him and double damages for the deductions from her Security deposit and gas/electric bill…she said the current tenant should be responsible for those charges.

I was very calm during our discussion, but told her I regretted sending her anything at all. I referred any and all contact to my attorney, who is not working at this time. (Otherwise I would call her)

Opinions? Ready Go!