Tenants and Breach of Contract - Early Termination

[Larry Williams]

Greetings All.

I have a townhome rental in Lewisville, TX, with the following situation:

-Tenants (husband and wife) signed the Texas Association of Realtors Lease Contract.

-Two year lease commencing on March 15, 2016.

-They paid a deposit of one month's rent.

-They have been good tenants, and have paid rent every month on time.

-The husband called two weeks ago to tell me that his wife has serious health issues with her back and cannot climb the stairs (has had three surgeries with the last being a fusion).  All bedrooms are upstairs.  He wanted to know what their options were to terminate the contract early so that they could move into a single story rental.  She has been unable to work since July, 2016.

-I responded two days later via email that we would allow them to terminate if they forfeited the deposit, and paid two months rent.  

-I received a letter from them two days ago that they are terminating the contract December 14 and will be vacating the property, not agreeing to the legal termination option, and demanding their deposit back.  They are current on their rent.  It's a breach of contract since they didn't agree to our terms and sign an amendment.

-I'm not using a property management service.

What are the best practices for this type of situation?  What's the best way to deal with this?  

Thank you all for your feedback.

Larry

[Joseph B. Davisson]

Your initial offer (deposit + 2 months rent) sounds perfectly reasonable. The tenant merely giving notice probably does not end their obligation under the lease but practically speaking this comes down to economics.  

1.  How long will it take you to lease to a new tenant?

2.  How much will it cost to make ready and lease?

3.  How much are your actual damages? (in excess of the deposit)

3.  How much will it cost you to pursue these tenants for damages? (legal fees and your time)

These tenants are betting that you will quickly find a replacement tenant and the cost to lease will be less than the 2 months rent you offered to let them pay as a penalty taking into consideration the cost to collect from them even if the cost to lease exceeds the 2 months rent amount.  They are probably right. Get started locating a new tenant right away.