Last month's rent - Deposit in Lieu of Rent

[Keiko Bake]

Hey Gang,

I just had a renter who's lease was set to end on June 30th, send me an email on May 20 of their intent not to renew.  I had my property manager start finding new tenants and he was scheduling showing the place for the few weekends going from  May to early June.  

So, I'm still expecting a June rent check and my renters normally pay pretty early (28th or 29th of month preceding), but the rent check doesn't show up.  I send an email on June 5th stating that I have not received the rent check and please ensure I get it.  I also state that per our Lease, Last Month's rent cannot be paid by the deposit.

Well a day later, I get a call from the renter and he's furious that he cannot use the Deposit as rent and basically states that he'll be following his own process of will not be sending any rent and I can use the deposit for rent.  I nicely state, there's late fees associated with you late rent payment and I'll be sending you an invoice for this.

So I send the Late Rent Invoice, basically $50 late fee on top of the $1450 rent due (making it a $1500 total).  During this time of getting the Invoice to the renters we're into mid-June.  My Property Manager reaches out and the renters schedule a Move-Out Inspection.  I tell him to ensure he documents everything.  Luckily, they have a great inspection with no findings.

Though not optimal, I decided not to pursue my $50 late fee and the whole issue with my renters breaking the lease by using their deposit as the last month's rent.

I'm curious if you all know of a more functional approach to this whole last month's rent and  deposit thing.  I'd really love to report my renters to their next place they rented but they did not give me a forwarding address.

Love to hear the advice from you all.  Thanks ahead of time.

Kk

[Jill F.]

I haaaaaaaate that. i'm no help but I feel your pain.

I quit or pay on the third if I don't have a payment plan in place. Unfortunately that will only help if the tenant either wants to stay or has decent credit and doesn't want to mess it up. I would threaten to file for eviction because that makes life pretty miserable for renters. I might even file if they didn't cough up some rent money. When I move in tenants, I jump up and down about it. So far both times I've had to get people out they were inherited tenants that had already made such a mess and had such terrible credit that it just wasn't worth it.

I am going to ask my attorney next time I talk to him about taking last month's rent prior to move-in. In Ohio we have to pay interest of 5% on security deposits kept over 6 months, so if last month's rent doesn't count as a security deposit it might be worth it. BUT i don't know how that would work with a quit or pay. If you are holding last month's rent can you still quit or pay if they don't pay rent and haven't given notice? 

In any event. Good luck getting a new tenant in place quickly