Tenant not honoring lease, how do I go about getting payment?

[Jason Mills]

Hello all, I had a college age tenant sign a 2 year lease 18 months in advance near a university that is almost exclusively rented by college kids. It’s a 4 bed house and she signed and paid the deposit in full thinking she’d have time to get roommates. (The lease was specific about it not being the landlord’s responsibility to find tenants; the rent was expected to be paid in full regardless). Long story short, she backed out a month before school started, leaving me with a vacant house for the past 4 months and no luck in securing tenanats since school is well underway despite lowering the price and opening up the search. My attorney says I should wait until securing a lease before taking the client to Small Claims Court but it’s looking less and less likely I’ll be able to rent this out and I need the money now. What should I do? Thanks for reading!

[Nathan Gesner]

1. Don't ever accept a tenant 18 months in advance, particularly a kid. They have no way of knowing what they intend to do that far in advance. I would normally suggest you not accept a tenant more than 90 days in advance.

2. I don't recommend signing leases longer than one year. Even mature tenants can't normally plan that far in advance and the majority of them will break the lease before the two-year term is complete.

3. When you take a deposit and hold a property off the market, you are accepting risk. You can mitigate that risk by requiring a large fee that is non-refundable if they change their mind. The longer you hold it off the market, the bigger the fee should be. For example, if the house rents for $1,000 and you normally require a $1,000 security deposit, charge the tenant a $1,000 holding deposit that will convert to the security deposit if/when they sign the lease and move in. If they fail to follow through, you keep the fee to cover your losses and put the property back on the market. Be careful with your language: a deposit is refundable, a fee is not refundable.

4. I don't know what paperwork was signed or what evidence you have but I would contact the former "tenant" and let her know she violated the agreement and has caused me some major losses. Let her know you intend to take her to court to cover those losses and see if she's willing to offer to compensate you. You could wait until the unit is rented so you can determine the exact amount of losses suffered, but I suspect you're already pretty close to the limit of what you can sue for in Small Claims.