Newbie with NC residential lease questions...

hey gang,

i tried to look for answers on this forum, but the 576+ pages of topics is a teense overwhelming…

i bought a townhome in 2002 and moved out last year for a single family dwelling, so i decided that, instead of selling it, i would rent it for a few years. i’m currently renting to a family who moved here from colorado. they have been living there since the end of september and have yet to pay their rent on time.

so, the guy calls me the other day telling me that his in-laws have “pre paid” on a mortgage for this house (what is that supposed to mean, in the first place? you can’t “pre-pay” on a mortgage, as in, so nothing is owed in the coming months…) and “they live somewhere else” so they want he and his family to move into the pre-paid house and he wants to get out of his lease.

now, i’ve been a little too trusting as a landlord before, renting this particular unit out and i know that he is just trying to get out of his lease, but according to a standard NC lease , besides the “rerent levy” (which even though I tried to look that up , too, I’m still unsure of how that works with breaking a lease) I can’t find substantial information in the lease that states what the consequences are to breaking a lease, what his fines would be, if this is even legally possible, or how this works at all.

Could someone help me clarify? I just have a really bad feeling about this one…

Also, what happens if he and his family just take off , never to be seen again? What do i do about that? Do I get a lawyer? Do I tell my homeowner’s insurance company about any damages? What about the state attorney general?

Thanks in advance for any advice!

Did you require any type of deposit up-front?

I required a security deposit of one month’s rent. I’ve thought about what I’m going to do about that issue b/c what if they leave the place wiht more than the deposit’s worth of property damage?

I don’t do rentals yet, BUT, if it were me, I would schedule an appointment to discuss it with them further and get more details with digital camera in hand. While there, I would explain to them that you want to work with them, but as a formality, you first need to document the condition of the home before talking about what you were willing to do. Have a document describing the condition od each room and have them sign it when you are done. BTW, I would also do this before they left. This would convey a sense of professionalism, and not willing to be taken advantage of.

If the place is in good shape, what I would explain to them that you were happy that they found a situation that would work for them, but that there’s a lease involved. Explain that it costs money to get another tenant, and normally what happens is that when a tenant skips out on a lease, legal issues take over regarding the lease, and then everybody loses as lawyers want to get paid, the courts want to get paid, collections are involved, credit gets ruined and things can just get ugly. So, being that you’ve kept the place in good order you want to work with them and here’s how…

We’re talking 7 months left on the lease, so explain that you will draw up an agreement :deal that states you are willing to release them from the lease upon being able to get another renter (chances are with all the foreclosures going on, you should be able to do this in 60-90 days, sooner if you get a realtor involed), but that they are responsible for rents up to 120 days upon vacating (one month to get unit in order, advertised, another 2-3 months to get it rented), thereby splitting the difference of the remaining term of the lease with them, which you are not obligated to do. After the 120 days, they will be released from the lease, but they are responsible for the money up to this date. Again, if the house is in order, tell them you can apply the security towards the first month of this new agreement to make it easier for them.

If they balk, explain that they signed a yearly lease, not a monthly lease and are obligated for the full amount of the money till the end of the lease. You are willing to risk losing three months rent, which you explain puts you into red for the year (i.e. - “I will have rented this to you for a year and lost money, is that fair?”), in order to help them out.

The reason I would do this is simple… getting a lawyer involved, court costs, etc. which there are no guarantees of getting back even with a judgement, is nothing compared to the stress and anxiety that would go along with it, feeling stuck. Worst case, you can demonstrate to the court how you tried to work with them, so you are not viewed as another “greedy landlord”.

I am not sure, check with you accountant, but I also believe you can write off the above if you can’t rent it out, as a loss.

In any case, you tried to help, and work with them, no matter their repsonse. “Sometimes it better to be like water and find a way around the rock (obstacle) letting the river flow smoothly, rather than becoming the rock and damming things up…” :biggrin

One more thing… keep your cool. In a situation like this, it’s easy to see tempers flare (i.e. - you looking at losing money, them looking at you not letting them out of the lease). But, if they are not willing to work with you, or things start to flare up, feed that back to them and say - “I’m sorry guys, I spent alot of time and thought on this as you can see, and I thought I came to a solution that could work for you without having to enforce the remainder of the lease, but I guess all the work I put into this was in vain and because you are not being flexible, I’m going to have to enforce it anyway. Take a day or two and think it through and let me know if you change your mind.”

Then send them a certified letter thanking them for meeting with you, a copy of the inspection and photos, and explain in the letter what you offered, with the new agreement attached again, and when you will recind the offer (two weeks out?), highlighted for emphasis, and if there is no response, remind them that the lease, in the interim, is in full affect until the end of the term. Just more documentation if you end up in court.

I would also start looking for a renter immediately.