Holland, MI · Member since 2014 · 12 posts · 1 vote
I have a tenant that has given a 30 day notice, which puts their move out day at June 25. They get keys to their new place June 5th and plan on having the unit "move-in ready" and surrendering it by June 12. I explained to the tenant that rent was still due on the first and they will be prorated back any rent for the month, if I am able to place a tenant prior to the 25th. In Michigan it is illegal to charge one and a half months rent for security deposit, which the tenant now believes can be used as their rent. They believe because their giving it back "move in ready" they will still have the "half a month" for repairs.
I've read hundreds of replies on other forum posts about being tough regarding paying rent late, but I just don't know what my recourse is in this situation. They are leaving and I don't feel as if there is anything I can legally enforce.
The proper procedure is to proceed as with any tenant that has not paid rent on time. The process is very clear and should be followed to the letter regardless of whether they have given notice. You do not know the future and can not predict where this will go.
Or you cross your fingers and hope there is no damage to the unit that will require you to take them to court.
Give notice immediately to enter and do a inspection to confirm condition of unit and on the 2nd of June begin the legal process to collect rent including applying a late fee.
Best practice is to charge them full rent then AFTER they surrender you can do your post move out inspection. You have 30 days legally to return deposit with itemized statement of deductions in MI.
I always inform my tenants that deposits are not payments and all fees will still apply for past due rents.
I have been at this for several years and I know about all the information you provided.
As mentioned in my first post I HAVE had the rent is DUE discussion with them. I have shown them the paragraph in the lease that they signed.
However they have no intention of paying. Period. Their argument is that there is more than enough money in the security deposit to cover the rent and any damages.
I can tell them until I'm blue in the face that the security deposit cannot be used as rent. What I believe is happening here is that they have had to pay a security deposit and first months rent at the new place and don't have the rent to pay me.
Does anyone have a suggestion that gets them to pay. What is my legal recourse?
The proper procedure is to proceed as with any tenant that has not paid rent on time. The process is very clear and should be followed to the letter regardless of whether they have given notice. You do not know the future and can not predict where this will go.
Or you cross your fingers and hope there is no damage to the unit that will require you to take them to court.
Give notice immediately to enter and do a inspection to confirm condition of unit and on the 2nd of June begin the legal process to collect rent including applying a late fee.
If it were me, i would just let it go for now. You probably hit the nail on the head with they put their money into the new place. Not to mention moving expenses. You can and probably should pull the late fee out of the deposit. You should maybe post as being late so they can't argue the late fee,but if you try to evict,by the time you get to court they will have moved anyway, so you're out time and money. If they are collectable, once they move out,go after them for damages. Like you said they aren't going to pay now anyway.
Just place your notice if you do not receive rent on time and start the eviction process. If by chance on the 12th they give you the keys and the place is in perfect move in condition you can always stop the process. You do not have to have a bunch of conversations until you are blue in the face. Simply place the notice. When they call realizing they are setting up to have a judgement on their record they will react accordingly. When asked the answer is the same "I have to follow the letter of the lease we agreed to." "I'm sorry if you feel it should be different but legally I cannot hold the security deposit for rent and in order for me to get it, I have to take you to court". Remain calm and very polite, "I'm sorry my hands are tied, it's the law"
If you allow yourself to be pushed around today it is going to continue, the "new" place needs to be clean and decorated which is more important than getting yours done. The 12th is going to be the 13th and then the weekend of the 17th. Pretty soon they do leave just a couple days after the lease is up and you have to get it rent ready, but can't put someone in on the first. So you lose a month and no security to cover the damages.
If you place a pay/quit notice and inform them that after x days you will start the eviction process, they'll most likely pay. If they don't, you take them to court and see if you can get paid and them a record. Depending on your rent/deposit amount, you may want to start collecting the deposit as lease sign and the first AND last month's rent when you hand off the keys. That way they have to provide an acceptable move-out condition in order to get any prorated rent/deposits after vacating.
This doesn't help you now, but moving forward can you collect last month's rent (in addition to security deposit) as part of the move-in costs?
I just recently had to start doing this because of what you are describing.
It cuts down on the volume of applicants, but what you are left with is people who have saved enough money and properly planned for their move. Not sure if your market would support it, but I rest more easily these days doing it this way.
Good luck with your current situation. This might be one of those times where you are losing some money as part of "landlord tuition."
Double check the 1.5x on the security deposit as I am pretty sure it is in fact the maximum allowed. In your first post you said it is illegal, not sure if it was a typo.
Definitely post pay or quit notice and charge late fee if relevant. The threat of judgment or eviction on their record may help them decide to pay now and wait for their deposit. But generally, if they've used their money to pay the new deposit and rent elsewhere, they don't have it to give to you. Luckily, you are smart enough to charge more than monthly rent amount in deposit so you do have the chance to still come out fine even if minor repairs are needed. I would stress to them that you cannot try to get a tenant in early to save them some money until they turn their keys over and sign a release that they are moving out early. I have had several tenants do this over the years, and it is annoying, but I plan for it now and am pleasantly surprised when I actually get last month's rent.