LURLINE R. JOHNSON (R), ABR, CRB, CRS, GRI, RMP
Property Profi les, Inc.
Past President, Oahu Chapter
National Association of Residential Property Managers
Q. My tenant moved in but he isn’t happy with the unit and wants to break his lease. He has only been in for one month and we gave him a discount of $150 on the rent. I don’t want to have to rent it again at the lower rent and want to re-list it at the original price. My friend said that might be unlawful to do since we already set a price. What are my options?
A. It was very generous of you to discount the rent to the tenant in the first place. You are perfectly able to rent the unit at the original price you quoted in your ads prior to putting in this new tenant. It seems unusual that he negotiated a lower rent and then decided to not take advantage of his savings.
I am wondering if you have a term in your lease that addresses breaking of a lease. On our leases we charge a “break lease fee” and then have it spelled out that the tenant is responsible to pay rent until we find someone else to take his position on the lease.
The Landlord Tenant Code also allows for the full amount of rent to be covered – so in the event that you have to charge a lower rental rate to get the unit rented, then the tenant must cover that difference. So if the tenant was paying say $1000 per month but you had to lower the rent to $950 to get it rented, then the tenant would owe you the difference of $50 for the remainder of the lease term.
The law actually reads (521-70 (d)) that if the tenant wrongfully quits the dwelling unit and unequivocally indicates by words or deeds the tenant’s intentions not to resume the tenancy, the tenant shall be liable to the landlord for the lesser of the following amounts for such abandonment:
(1) The entire rent due for the remainder of the term; or (2) All rent accrued during the period reasonably necessary to rerent the dwelling unit at the fair rental, plus the difference between such fair rent and the rent agree to in the prior rental agreement and a reasonable commission for the renting of the dwelling unit. This paragraph applies if the amount calculated hereunder is less than the amount calculated under paragraph (1) whether or not the landlord rerents the dwelling unit.
If the tenant never took occupancy at all then the remedy to you as the landlord is a little different. In that instance, (521-70 (e) the tenant will be liable to the landlord for the lesser of the following amounts: (1) All monies deposited with the landlord; (2) One month’s rent at the rate agreed upon in the rental agreement; (3) All rent accrued from the agreed date for the commencement of the tenancy until the dwelling unit is rerented at the fair rental plus the difference between such fair rent and the rent agreed to in the prior rental agreement, plus reasonable costs, and a reasonable commission for the rerenting of the dwelling unit. This paragraph applies if the amount calculated hereunder is less than the amount calculated under paragraph (1) whether or not the landlord rerents the dwelling unit.
I hope that this is a one time situation and you can move on with getting your unit rerented. You may want to review the terms of your rental contract and allow for a “break lease fee” to discourage a tenant from going down this road in the future.