ending lease term to put another tenant that pays more

[Michinori Kaneko]

Hi,

i have tenants in a 3br apartment (three guys that shares). their lease doesn't end until 12/31, but one of them is getting engaged and wants to move out, along with the other two. The lease states if the lease is terminated voluntary early, then they forfeit the deposit (they have 2x month deposit) + 2 months of rent. They don't want to use this early termination clause, but I also have incentive that there is a strong candidate that wants to sign a lease on that apartment for $50 more per month. Is it a dangerous bridge to allow early termination of current tenant with more favorable clause (e.g. only forfeit deposits, they pay all legal fee to prep docs to break lease legally, etc.)? My concern is that if I do this with one tenant, if another tenant wants to leave before lease term end and I don't allow it, will it be deemed as favoritism, or as long as I have a formal documentation of mutual agreement there are no issues? Thank you for your help in advance.

[Patricia Steiner]

As a landlord myself, here's where these situations get dicey:

What if they don't all move out on the agreed upon date?

What if there is damage resulting from their stay or departure?

What about outstanding utility bills?

If it were me, I would have all three tenants sign an Addendum to the Lease which states that in order to allow them to terminate the lease early without the penalty, the following conditions are required:

1.  A satisfactory walk-through of the vacated unit on or before the termination date.  Define satisfactory as completely empty of their personal belongings and removed from premises; broom swept/clean; trash removed; refrigerator/cabinets empty.  Be detailed.

2.  No damage noted to the unit/property.

3.  Proof of utilities paid (some landlords discover that the property is being liened because the utilities were not paid for months before their departure).  

4.  That the early termination is predicated upon a signed lease by a new tenant who will assume the vacancy upon their immediate departure.  (This will document that there was no loss of income to you as a mitigating factor).

Just get it all in writing from both parties (exiting and entering) and do not release the security deposit until the current tenants have met all conditions.

Hope this helps.