Here’s the situation - my fiancé inherited a very nice house from fairly wealthy parents. He’s rented it out. It’s a 5-figure per month rental in a very exclusive gated community. I help out with the “landlording” as best I can, which means jumping at every tenant request because they expect perfection. I’m jumping a lot.
We've had tenants in there for about a year, and have built in options to renew for a year at a time. We did not agree to liquidated damages for early termination - given the exclusive nature of the community, the extremely high commission cost, high property costs (taxes, HOA, etc) and the fact that it can take anywhere from 3 weeks to multiple months to rent it out (at high carrying costs) - we depend on stable multi year tenancy for the numbers to work out.
It’s critical that when the tenants renew, they stay for another full year. We also believe a good stable tenant should be happy to make a 12 month commitment otherwise at this price point, something might be up. Most tenants have stayed around 3 years and never said peep about leaving early.
This new tenant pays on time, is generally nice, and they say they want to renew and stay maybe 5 years, but they want to be able to leave for any reason at any time with minimal consequences. It’s hard to believe someone that’s saying they want to stay 5 years, but can’t commit to 12 months. Technically, that’s no longer a renewal - that’s a renegotiation of the contract and had we known we would’ve accepted another offer.
The whole thing is bizarre, I have a sense they have an agenda they’re not disclosing because at this price range, with kids enrolled in great private schools nearby, our experience has been the opposite - families wanting to lock the house down at their sole option for x years at x price.
The arguments the tenants presented are very bizarre as well (what if lightning strikes the house, or I decide to adopt 4 children and need more rooms, what if I need laser surgery only available in Europe). Really? Well, what if I want a tenant that is able to make a 12 month commitment with no early termination clause?
What do y’all think? My preference is to renew as per contract or that they would reveal the minimum commitment they are able to make, and we’ll write up a short term lease at a higher price - flexibility and stressing out the landlord should come at a cost.
I would understand and offer an early termination clause if this was a yuppie area condo, university type apartment, or really any rental $2000 and under. But at this price point, you’d expect a different tenant base with much higher levels of stability and commitment ability. At least I did.
What do you guys think?
