Pro rate rent?

Question

Hi.

My tenant gave her 30 day notice today. She is on Month to month.  Rent is due on the first of each month.  Her move out date is August 19th 2016 but she starts her new job AUG 1 and likely will be out by AUG 1.

This is my first Tenant turnover.  Question is do I pro rate her rent from  AUG 1 through the 19th since the 30 day notice ends on AUG 19th, OR if she leaves on AUG 1  do I just let it go and not and not charge her rent for that month since she wont be there? (Costly for me)  Seems to me she should pay rent up to the ending date of the 30 day notice.  but wanted to ask you guys how this is handled.

Thanks

Ron

Jeff Rabinowitz · Answer

This could vary from State to State so it is best to get an answer from a local source. In Michigan, If rent is due on the first and the rental period is a month then rent for the entire month would be due if the tenant occupies the property for even the first day of the month. Also, this would probably not be considered proper notice to vacate (that could depend on what your lease states). If the landlord wished to terminate the lease they would have to give, at least, a full rental period notice. For example, if you sent the notice today, the earliest you could terminate the lease would be August 31. I suspect your tenant owes you the same consideration. So, you are probably owed the entire month's rent and could charge that against the security deposit. Whether you wish to do this or wish to give the tenant a break is up to you.

Thomas S. · Answer

Check your state regulations. The regulations will clarify "notice". In most cases, because leases run month to month when a 30 day notice is required it is to be given prior to a new rental period (month). When a tenant gives 30 days notice after the first of the month the 30 days does not officially begin until the end of the month. In this case since the 30 days notice was given today it officially begins the end of July for the end of August.

The same would apply if a tenant remained in the unit into the beginning of a month. If they do they owe rent for the entire month not simply for the additional days.

There is no requirement to pro rate, your are not able to rent the unit for August 20th. she owes the entire August rent.

James Mc Ree · Answer

As mentioned, the lease is your governing agreement.  You are entitled to a full August rent if the lease specifies rent is paid in increments of a whole month, not days.  It is ambiguous if the lease says neither a whole month is due or rent is prorated in a situation like this.  You may have to rely on case law in your state.  The legal cost of inquiring might not be worth it.  I do proration.

You may be able to make a deal with your tenant.  Consider positioning full month payment as what is expected, but offering a rent rebate if the tenant abandons the property on or about Aug 1 and you find a new tenant to move in by Sep 1.  That aligns your and tenant's interests: tenant is happy, gets a rebate if you are successful and is motivated to help; and you get in early to prep and show the property.  You also get to show the property during a more favorable time of year.

Your lease may prevent you from showing the property to rental prospects until the tenancy ends.  Your current tenant might be unhappy and obstruct the showings.  This approach might address both of those risks.  It may also allow you to keep the additional rent if you don't find a tenant to move by the move-in date.

Jim.

Kurt Gardner · Answer

I'll toss in here.

Agreed with 30 notice analysis...In my state, 30 days requires notice prior to the beginning of the next rent period (e.g. your rental period starts on the 1st of every month, any notice given past the first then requires the NEXT 1st to roll around, THEN the 30 days begins and the tenant has to be out by the end of that month - notice given July 3rd, 30 countdown begins August 1st, tenant obligated to pay rent through and must be out August 31 - it is the same requirement if you gave the tenant an eviction notice on a month to month, so do not feel badly about this arrangement).

Also agree with the consideration above regarding prorating (if you are willing to cut yourself out of 1/3 your entitled rent).  If the tenant has been a good client and you feel charitable (there is nothing wrong with a compassionate business as long as you are not being taken advantage of or starving yourself/family), then I'd arrange with the tenant to deliver the keys to you on XX date and you will either a) prorate their deposit back to them according to the days they had "key occupancy" assuming the condition of the residence meets your standards to release the security deposit, or b) charge them the amount of the anticipated date XX on the 1st of August and then return their security deposit upon their subsequent vacancy and cleaning subject to your inspection.

Personally, I like the prorating of the security deposit better if you feel like the tenant is a good individual and will treat your property with integrity before they move, and it shows additional compassion by not tying up their money while they position themselves for a new location.

In any case, do not put yourself in odds with the law, and do not perform any activity that would allow your tenant to come back against you.  In a crazy world, anything could happen, and the tenant might need to stay longer, change their mind, or who knows?  Get an addendum in writing stating both of your intentions and work from there.

Andy D. · Answer

I agree with what @Greg S. describes. A lease is a contract, and my property is not a hotel where I charge on a per-night stay. If the contract says that the tenant's obligation to pay rent is until day X then this is exactly what the tenant will have to do - simply also because I keep providing the tenant with access to the unit until that very day too. Typically a lease term goes till the end of the month. But, of course, that can be different and obviously depends on what's written in the lease agreement.

Now, if tenant decides to move out prior to day X then this does not end my obligation to keep providing him with access to the unit. Since I still have that obligation, tenant still has their obligation to pay rent. It's a bit similar to them going away on vacation and not wanting to pay rent for that time because they are not on the premises. ;-) Yeah, right, good luck with that idea!

Having said that, I would (need to) pro-rate rent if I had a tenant ready to move in prior to day X. As a matter of fact, I have done it that way quite a few times: new tenant gets monthly rent pro-rated for the days he actually lives there and old tenant pays till the day prior to the one the new tenant moves in. Irrespective of when the old tenant moves out.

But the above described is a new agreement between two contracting partners (here: landlord and tenant) to modify the existing agreement (= lease) and nothing else but the rescission of the lease agreement based on this new agreement.

Long story short: anything can be done between two contracting parties if they agree (barring some exceptions via compulsory law, of course).

Kathy Johnson · Answer

Somewhat true except that if the new tenants want to move in on the 1st, you will have a gap.

Account Closed · Answer

If she moves out Aug 1st, she's not going to pay you rent for Aug.  I'm assuming in WA that you have a duty to mitigate damages, meaning you can only charge her rent until you find another tenant, or until her notice is up.  And then, you just take the rent out of the security deposit.

If she's there past her grace period in Aug, and hasn't paid any rent yet, then you can file for eviction.

You don't have to prorate her rent for Aug, if she's still there.  She would normally have to pay the full rent for Aug, then you would reimburse her any overpaid rent after she moved out.  When I had tenants I trusted and knew their unit was in good shape, I'd prorate their rent for them.  But, I never let them use their deposits for rent.

I think @Marcia Maynard is in WA.  She has a lot of experience in that neck of the woods.  You might want to ask her.  The @ link thing never works for me, so I can't notify her of this post.  Maybe someone else can?

Yvette M. · Answer

The notice would end on Aug 18.  Tenant will pay august rent on the first.  When she moves out you will prorate the rent for the actual days she was there in August -- 18 days.  So if rent is $1000 divide by 30 days = 33.33;

33.33 daily rate x18 days = 599.94

1000 - 599.94 = 400.06 (rent refund)

someone correct me if I'm wrong

Jason Hartley · Answer

But he just got the notice today, so there are no "new" tenants yet. =)  The new tenants will move in X days after the old tenants move out.  Whether those X days begin on August 15th or September 1st should make no financial difference.

Now, on the other hand, it is totally normal to pro-rate new tenants to get them on a 1st to 1st cycle.   I think most tenants expect this though.

Jason Hartley · Answer

Wouldn't you be in the same situation (only a few days later) if they gave notice on the 1st of August for September 1st?  To you it would be the same.  I'd say pro-rating the rent for August would be the fair thing to do in this case because you have the same 30 days to prepare for a new tenant as if they gave you the notice on the 1st of August.  You shouldn't be out any $ as a result since you can now move somebody in sooner.   Right??....

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