I have a group of 4 college girls who signed a year lease and sent me a letter today that as of april 30th they will be moving out and they are terminating the lease early. They will be 4 months shy of the year long lease. They also state:
“My rental deposit should be forwarded to this address within 30 days of the termination of our rental agreement as required by the Uniform Residential Landlord and Tenant Law of Iowa section 562A.12, subsection 3.”
Up to this point they have been excellent tenants with rent on time and in some instances rent paid ahead of time .
It is my understanding of Iowa law that I have to make reasonable attempts to rent the house to mitigate damages. I will do my best to get new tenants, but how would you go about things? Do I let them know that I am not obligated to return their deposit? Do I tell them anything other than ask if it is ok to show the house?
Also in my lease agreement I do not have any clause that allows for a payout for a broken lease. I know some say that 2 months rent or whatever will mitigate damages.
Do i attempt to rent house out and if I don’t get someone who is qualifed in there for may rent then keep their deposit. And wait to get sued or what? I would prefer not to see a lawyer about this yet since that could cost me as much as losing a months rent.
Thanks guys!
TP
I don’t know anything about the state laws of Iowa, but you may be able to get a free consultation from a local attorney. I believe the local bar association could probably recommend one that deals with real estate law and usually the initial hour or 1/2 consultation is free.
Anyway, if it were in this state, I use a standard lease from the local real estate board and it has language in there to protect me. If they break the lease, they’re liable for the remainer portion of it if I can’t rent it out. Local laws and case laws say that I have to make a reasonable effort to rent it out otherwise I can’t sue for damages and I may have to present evidence of that.
I’ve told a tentant that wanted to break a lease that they had 2 options, find someone to sublet the apartment subject to my approval (no criminals, etc.) or let me find a new tenant that signs a new lease and they’re off the hook after that.
I think you’re actually in a better position than you think. You can actually sue them for the missing rent money and if they don’t pay, have a court judgement against them. It’d probably be on their credit report for several years possibly making it difficult for them to rent in the future the next time somone pulls a credit report. Around here, you can take it to small claims and it costs $35 to file. I forget what the limit is, maybe $3000, but someone else said if it was for more than that, then you just file two separate claims for different months of missed rent.
Thanks Henry! I think I am in a good position as well.
My lease states:
Clause 4:
The term of the rental will begin on , and end on____. If tenant vacates before the term ends, Tenant will be liable for the balance of the rent for the remainder of term.
Also my lease makes all tenants jointly and severally liable. Plus all 4 of the parents signed cosigner agreements!
I just can’t believe that they think they can get out of a fixed term lease just by giving me 30 days notice. They must have gotten bad advice from someone.
THanks again.
TP
TP…I belong to my local apartment association (220$ yr.) and they have a “hotline” that you can call for issues just like this. One call like this just about pays for the membership dues, which of course are tax deductible. Also, they provide every form known to man!
That said, I believe that you are in an excellent position! Smart move getting the parents to co-sign. I would find out exactly where I stood (legally) first, and then I would send a VERY polite letter to the young women AND their parents explaining to them that everyone of them is liable, that everyone of them will be hauled into court, and that everyone of them will have their credit attacked to the fullest extent allowed! Someone will flinch - you only need one.
I would love to know what happens with this, please keep us informed. Good luck.
Thanks! I can’t believe that they didn’t think about the consequences of breaking the lease agreement. It’s not like it’s a month to month tenancy. All I have to do is show the court that I am attempting to rent the house out and document everything (names and phone numbers of interested tenants) and show the court why someoned didn’t qualify to rent the house and bam judgement against them.
I can’t believe the parents would all allow their kids to break a lease and not be accountable.
If I cannot lease the home to a qualified tenant before their lease runs out then I will be going to court for unpaid rent, advertising costs, misc. costs etc. This could be expensive lesson for the girls and their family.
TP
A landlord shall, within thirty days from the date of termination of the tenancy and receipt of the tenant’s mailing address or delivery instructions, return the rental deposit to the tenant or furnish to the tenant a written statement showing the specific reason for withholding of the rental deposit or any portion thereof. If the rental deposit or any portion of the rental deposit is withheld for the restoration of the dwelling unit, the statement shall specify the nature of the damages. The landlord may withhold from the rental deposit only such amounts as are reasonably necessary for the following reasons:
a. To remedy a tenant’s default in the payment of rent or of other funds due to the landlord pursuant to the rental agreement.
b. To restore the dwelling unit to its condition at the commencement of the tenancy, ordinary wear and tear excepted.
c. To recover expenses incurred in acquiring possession of the premises from a tenant who does not act in good faith in failing to surrender and vacate the premises upon noncompliance with the rental agreement and notification of such noncompliance pursuant to this chapter.
In an action concerning the rental deposit, the burden of proving, by a preponderance of the evidence, the reason for withholding all or any portion of the rental deposit shall be on the landlord.
The funny thing is one of the cosigning parents is a small time landlord. Has a 4 or 8 plex in a small community. He was a real jerk when we had our first meeting. Didn’t know what rental insurance was and wasn’t going to buy it for his daughter. I let that slide but I knew this guy could be a pain in my arse.
I almost bet he is the one that gave them the advice to send me a letter and quoting Iowa Code. He must have either a) not understood the lease OR b) did not believe that I would pursue the matter further.
Sounds like he may not have even realized that what you’re doing is POSSIBLE. Let alone likely. He may be one of those clueless fools that gets into REI thinking it’s a quick easy buck. What I’ve found of those types is that usually their buildings aren’t even up to code. Gotta love ignorance… Well hopefully the dent to his wallet will help him learn.
this is an open and shut case. send a letter to all parties staing leases date is to X and Y and total money due is Z. An outstanding balanced of ZZ is still due. The lease is still in force and failure to pay the contracted amt will result in legal action to remedy the breach of contract.
I have not made any contact with the tenants thus far concering their letter. I will allow them to move out first before I write them a letter. I am still expecting them to pay april rent so I don’t want to antagonize them until i get the cash and get them out of my house with my keys on april 30th. I am planning on trying to rent the house may 1. If I get tenants in there I am no longer entitled to their remaining rent as I understand iowa law. Do you think I should still send them a certified letter asking for the total of 4 mos. rent if I already have the house rented?
you need to act now as this is not going to solve itself other than you are to lose money.
you must acknowledge the receipt of their letter and clearly state that their attempted early termination of the lease in not allowed under the lease agreement signed by all parties.
if you want to be a bit conservative then do not mention legal action in the first letter. just end the letter stating the lease ends on Sept 1 and payments should be made in accordance with the lease.
then when they come back to you to whine, then MAYBE offer them to get out if they pay all fees related to placing new tenants and pay rent until new tenant moves in. This depends on how soft the market is in the summer.
in this case, silence is agreement. you must act now!
Send them a certified letter. It probably won’t help because tenants don’t act rationally. When they move out, definitely DO NOT SEND THEIR DEPOSIT BACK! Even if you get it rented May 1st, you’ll have a bunch of expenses. You’ll have advertising expense, cleanup expense, fix the nail holes in the walls, remove and dispose of any trash they leave, etc, etc, etc. I’ll bet that will come out to at least their deposit. Furthermore, if you’re doing the work yourself, pay yourself well. You certainly ought to be worth $50 per hour - at least!!!
If they don’t agree when they get your explanation of the expenses, let them sue you!
Thanks alot guys. On second thought I will send them a letter. How do I go about showing the property then prior to them moving out? Do I have the right to show the property and tell prospective tenants that they will be gone if I on one hand tell the tenants that they are responsible for the rent?
TP
do nothing; do not show the property. The lease is in force for ALL parties (you included). showing the property would be signaling YOUR intention to violate the lease.
A lease is a contract, period, end of story. Efforce the contract and abide by it.
In this situation as in all situations, you want to treat your tenants fairly and honestly. You should send the letter explaining the entire situation to them. I typically go over the lease when people sign it so they know they what will happen if they break the lease.
They have notified you that they’re breaking the lease. If it were in this state, you would be required to expend a reasonable amount of effort to have the place rented again by someone else. There’s case law of people sitting around doing nothing and then going to court to try and get their money. Courts in this state have said you didn’t make a reasonable effort so you get nothing. Again, don’t know of the laws in your state so either contact a lawyer or just make a good business descision and try your best to cut your losses. Explain this situation to the tenant and they won’t have any problems showing the apartment. I had this happen with one tenant and they were all too happy to let me show the apartment whenever I liked. I just called them to let them know when the appointment was and as long as they weren’t sleeping or had other plans, they let me come in whether they were there or not. Usually in my standard lease there’s wording that says I can show the apartment in the last 30 days. You still have to get their permission though.
Also don’t feel you are entitled to the 4 months rents. You are entitled to them as damages if you can’t rent it out. It’s not yours if you do rent it out and then your only damages would be the costs involved in renting it. Typically you just eat this cost and total it up as the cost of business but if you feel you must get every last cent, you can try to pursue it from the tenants. To me, it’s not worth the mental energy to pursue it when it’s only a few hundred dollars at most. It’s just the cost of being a landlord.
yes, in most states if a tenant has broken the lease (past tense), then you need to take steps to recover damages. Given this sounds like a college rental, chance of getting market rent in the summer is very low. However, at this point there is no breach of contract so no reason to take steps to migitate loss (as there have been none).
yes, I would show the place if you choice to cut a deal whereby the current tenants pay rent until replacement tenant si found plus cost of that activity.
Since you have mom-n-dad as co-signers, I would hold the line. These people are simply tying to weasel out of paying becuase they think they can get away with it. They probably intended to do this from day 1.