All Forum Posts by: Sarah Lewis

Before my tenants re-signed a year lease earlier this year, they wanted to sign an even longer lease that would end in late October next year. But, that's such a bad time to find a new tenant when a year lease would have been perfectly timed to find a new tenant. 

So I rejected their offer and would accept a one year lease, which they signed. 

I thought that issue was settled until earlier this month the tenant blindsided me that they wanted to move and they had already found possible new tenants. They had already begun to advertise the place on Craigslist before informing me, and it seemed that they were ready to move out by by the end of this month according to the available move in date they posted on Craigslist. 

So, I assumed they had already found a new place already and signed a year lease so that it would end for them when they originally wanted to in late October next year.

I'm afraid that if I can't find any qualified tenant right now, then that place could easily sit empty through November and December.

I figured I'd win at small claims court, but it was an unknown variable how much rent I could claw back if it sat empty through November and December? Would a judge award me both months rent? Or, would I only get awarded one month's rent even if it sat vacant for two months and longer?

But, now, the tenants are telling me they won't be breaking the lease and moving out early on the condition that we sign a longer lease that ends next year in late October.  According to the tenants, they either need to break the lease now to sign a new one year lease somewhere else or get that longer lease that I didn't want because it'd be too difficult to move out when their year lease ended and find a new place that would agree to a six month lease.

I feel like I'm being more or less blackmailed by these tenants into agreeing to the lease they wanted all along but which I had already rejected earlier this year. When they asked to do this earlier this year, I knew I could find a new tenant at that time of the year and so I rejected it. But, by waiting till now to tell me they want to break the lease, my options are much more limited.

What would you do?

If I cave in to their demands, even though late October next year still isn't an ideal time to find a new tenant, it would still give me much more time to prepare and find a new tenant than what the tenants are threatening to do this year. And, I could avoid the drama of going to small claims court. There's also some road construction now nearby that limits the amount of drivers who might see the place for rent which won't be an issue by next year. 

But, if they can stay, then that means they haven't signed a new lease somewhere else. So, if I call their bluff, then they would need to find a new place and that will take them time to do that because I know they don't have a lot of free time to do that. And, if a landlord checks their references, there's no way I'm going to give them a positive recommendation. 

By the time they find a new place, maybe they don't move out till late November and it sits vacant only for December instead of both November and December. One of my biggest concerns with small claims court was how much rent I could claw back if it sat vacant for longer than one month. But, if it sits vacant only for a month and the judge award a month's rent, then its not as big of a hit vs the judge awarding a month's rent when it was vacant for two months.

My head says I should agree to their terms, but my heart...

Its illegal but its a common practice in NYC, especially for rent control units.

I'm not surprised at this silly proposal especially after Berkley unanimously passed a law this summer mandating that weed should be free in The People's Republic of Berkeley:

http://blog.sfgate.com/smellthetruth/2014/07/03/free-weed-becomes-law-in-berkeley/

This would be the first time I went through the small claims court process so I could be wrong and I'm probably underestimating the process.

But, its my understanding that you cannot bring a lawyer into that venue. So, I wouldn't have to pay lawyer fees, which would quickly add up, and it wouldn't be one of those Pyrrhic victories where any money I won just ended up in the lawyer's pockets. And, I know the tenant has the money so I could collect the money if I won; it wouldn't be like those cases where you're not going to collect money from a deadbeat even if you win the case in court. 

Other than the court fees, what are the financial costs that I'm not factoring? If I lose, then I don't lose anything. But, if I win in court, then I can win an amount that more than compensates for my time.

Going to small claims court is a hassle and I have tons of other things I'd rather do. But, isn't it only going to cost me just one day in court to take care of this?

Hopefully, this threat of small claims is enough to stop the tenant from moving out. If I'm busy, then I know the tenant is even busier and wouldn't have the time to deal or prepare to deal with small claims court.

I'm not planning on accepting that first tenant, but I wonder if the courts would agree with that.

Will the courts say that I should have accepted that first applicant, and thus I can only collect the lost rent from when my tenant left to when the rejected applicant could have moved in?

If my written criteria is that the replacement tenant must have at least a 700 credit score, will the courts say that's too high and that I should have accepted an applicant with a 650 credit score?

Unfortunately, my security deposit is about $500 short of a month's rent so I am reluctant to let the tenant walk away from their lease with just the loss of their security deposit. (Moving forward, my security deposit will always match a month's rent.) And, on top of it, I'm looking down the barrel of my rental sitting empty through January so I'm looking at a serious loss of rent that a security deposit can't cover. 

If the tenant wasn't walking away during this time of the year when I knew it wouldn't be as difficult to find a new tenant, then I could be more willing to avoid going to court and let them walk with just the loss of their security deposit as reimbursement. 

My tenant is breaking the lease and leaving early, and now he's bringing up how his kid is suffering from asthma. I feel sorry for the kid, but does the tenant have any chance in using that as a legitimate reason to break the lease and avoid paying the lost rent I will suffer?

Could asthma be considered a case of constructive eviction, where the property is inhabitable to the degree that the landlord has essentially evicted the tenant and thus the tenant is released from all obligations of the lease? That's the only thing I can think of if he attempts to use his kid's asthma to break the lease.

The tenant has lived there for several years and he's never brought up asthma as an issue before, but they've recently started building a neighborhood park nearby so there's some dust from that.

However, that park is beyond my scope and I have no control over that. And, there are all these different possible triggers for asthma so I don't know how you could blame the dust when it could just as easily be something else.

I need quite of bit of help as this is the first time I'm dealing with a tenant breaking a lease, and I have a number of questions. (I'm a small time investor with only a couple of properties.) Tenant had been living there for over three years before signing a new one year lease and now want to break out after only a few months into this new lease.

My lease agreement basically stated that if tenants leave early, they would be held "liable for the balance  of the rent"  minus any rent I collected or could have collected from a replacement tenant by reasonably attempting to re-rent. Essentially, its the principle that the landlord should make a reasonable attempt to re-rent the place in order to mitigate the tenant's losses.

I know this won't end well and I'll probably end up at California Small Claims Court so I want to have all my bases covered and dot all my i's.

1) When should I start showing the place?

I'm concerned that even if the tenant says they'll move out nine months early and I find a replacement, what happens if the tenant doesn't move out so early? After all, the current tenant has already broken one written agreement so who's to say they won't also break that new date too?

To avoid that situation, should I market and show the place only after the tenant left? Or, will that violate the reasonable attempt principle?

2) Tenant has already started to show the place. How do I respond?

I just got an email today that they want to leave early and they said they had already shown it a few people already. (It turns out they put it up on Craigslist last week before informing me today they want to leave early and the only reason I checked Craigslist was because I wondered how they found somebody already). Basically, they said they found somebody who were 'very excellent candidates' and 'personable' who I would need to meet first. But, I don't even need to meet these candidates to know there's a bunch of red flags around them.

3) Do I need to accept the first non-bankrupt, non-felon applicant?

My attitude has always been I'd rather keep a place empty and wait for the best applicant. When I rented out to this current tenant, I had rejected four other applications who wanted the place even if it meant I could have rented it out earlier. (Two of those applications had obvious red flags, but the other two probably would have been accepted by some other landlords.) For the tenants who've lived there in the past 7 years, their credit scores were 700+ and incomes were more like 4X the rent. 

But, if I hold to those same standards and expect a replacement tenant with similar qualifications, can the tenant accuse me of not making a reasonable attempt to re-rent? When the first tenant that has a 600 credit score with no obvious red flags applies like felony or bankruptcy applies, can the tenant say that if I don't rent to that person then I didn't make a good faith attempt at re-renting the place?

4) What happens if I ask for higher rent from new tenant? Unreasonable attempt to rent?

When this current lease ended, I was expecting to significantly increase the rental price. For various reasons, their current rent is too low. (There's nothing wrong with the place.) Indeed, the tenants advertised the place on Craigslist for hundreds more than they are currently paying.

If I advertise it a higher price, can the tenant argue that I didn't make a reasonable attempt to re-rent the place because I made it more difficult by narrowing the pool of possible candidates at that price?

But, if I sign a new one year lease with new tenant at current price, then I lock myself into rents that are too low.

5) If I get higher rent, does tenant still have to pay for lost rent?

Is there a sneaky reason why the tenant is advertising it for hundreds more each month?

Let's say the current tenant's rent is $2000 a month, and new tenant's rent $2300. And, the place is empty for a month so that tenant would owe me $2000. But, if I rent it at $2300 for the next 7 months, will the tenant not have to pay that $2000 anymore because I made extra $300 for those 7 months to produce $2100 which would cover that $2000 loss?

But, what if I did a special where the new tenant got a discount for the months left in current lease where they paid current rent and then had to pay market rate for the rest of that one year lease?

6) For lost rent, do you take it from Security Deposit?

The security deposit is fairly large, but its still short by hundreds of dollars of the monthly rent.

7) What's upper limit for lost rent from Small Claims Court?

How many months would the court give me for lost rent?

This is probably the worst time to break the lease and find a tenant. If he broke the lease earlier or waited till next year, this wouldn't be such an issue. 

But, if I don't find somebody right away, then I can easily foresee it being empty for the rest of the year with dreaded November and December looming. One year, I had it for rent in November and didn't find anybody till January. 

And, even if I find somebody right now and avoid that scenario, a one year lease will hit end around Nov/Decemeber timeline the next time around. 

When I got the email today, I scheduled an appointment with the tenant this week to discuss this issue and wanted to avoid Nov/Dec by warning/scaring him that the place could easily be empty for those two months if he left now. 

But, since he's already placed an ad in CL, its probably too late for that conversation.

Sorry this was so long but this was my first lease break, and I had a lot of questions.

Thank you for your help.