Tenant signed lease but changed mind

[Carolyn Walters]

I’ve posted before about this situation but have some new things happening since then.

Tenants signed lease on June 9th and paid security deposit. Lease states move in date as July 1st and 1st month’s rent was due on or before June 1st before they would be given the keys.

Tenants contacted me on June 21st staying they have cancer and wanted to delay move in until August 1st. 

I was nice and gave them two options: 

1. Pay first month’s rent on or before July 1st and I’ll apply it to August’s rent and waive July’s rent since they wouldn’t be moving in until August 1st (so basically security for me that we wouldn’t get to August 1st and they’d then want me to hold it until Sep. and so on) and in my mind if they had the first month’s rent ready to go like they should have, they would have picked this option. 

2. Pay half of rent for July to hold it and pay full months rent starting August 1st at move in.

And of course the 3rd option was then to give me notice that they weren’t moving in and I’d have to keep the security deposit because they didn’t honor the contact and didn’t give me 30 days notice.

They didn’t like the first 2 options and on June 23rd demanded their security deposit back stating that the lease doesn’t commence until July 1st (their move in date) so they are entitled to the security deposit back. They don’t seem to understand that the day they signed the lease (June 9th) was the day they entered a binding contract and they also owe July’s rent if I can’t get it rented as they didn’t give a 30 days notice. 

My lease states that they can get their security deposit back if they aren’t default in the lease. An attorney has informed me that they are default in their lease because they didn’t honor the contract and they also didn’t give a 30 days notice. I had already held the house for them for 3 weeks and turned away two other potential renters during that 3 weeks. 

The tenants sent me a certified letter (written by them and not on attorney letterhead or anything) demanding I give the full deposit back or they would have a lawsuit against me and I’d then owe the whole deposit, their attorney fees, their court fees, and any damages to them for suffering due to financial burden. 

Do you think they mean taking me to small claims court or are they meaning something bigger? Can they really make me pay for their attorney fees, court fees, and suffering for financial burden?  Would this threat scare you as a landlord?  They’ve also threatened to put it in the small town newspaper because they don’t get many juicy stories like this often so they will love it. Their words were so are you going to give the security deposit back or do you want to go to court and have the judge shame you. 

Their excuse for wanting to delay move in was he just got diagnosed with cancer and needed to get treatment before moving in. 

[Nathan Gesner]

Carolyn, I manage 350 rentals in Cody. Although I am not an attorney, I can share personal experience with thousands of tenants.

They are threatening a suit in hopes of scaring you into paying. If I had a dollar for every time a tenant threatened to sue...

The fact is, they are obligated to the terms of the lease. If they change their mind, you are obligated to make a reasonable attempt to find new tenants. The original tenant is obligated to the terms of the lease until the new tenant takes over. so if you find somebody to start renting on the 15th of July, then the original tenant would be held liable for rent and utilities and other expenses for the first 14 days of July. The only exception is if you and the Tenant are able to make a new agreement. For example, you could offer the tenants the opportunity to forfeit the deposit and walk away which limits their losses to the security deposit. if you take two months to find a new tenant, they are obligated to pay two months worth of rent and their losses will be significantly higher.

Personally, I would cut off all communication and maintain the lease agreement until a replacement tenant is found. Then I would handle their security deposit in accordance with the lease and the law. If they sue you in small claims, you can show that you were making a good-faith effort to replace them and they were treating them in accordance with the lease and the law.