Landlord / Tenant Q&A: LURLINE R. JOHNSON (R), ABR, CRB, CRS, GRI, RMP
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 has just notified me that she is has signed a contract to purchase a condo and won’t be able to finish up her lease. In fact she said that she can’t pay the next month’s rent. “How can I expect her to pay rent when she has to put down a deposit on her new condo purchase?” She has 5 months left on her fixed term lease. What can I do? Can I force her to pay?
A. This is a new one. Most tenants understand that their rental lease is a binding contract that obligates them for the full term of the lease. It would have been better if she notified you ahead of time of her plans to purchase a unit so you could work out some kind of agreement between the two of you.
Of course you are under no obligation to let her out of the lease early or make any compromises.
Under Section 521-70(d), HRS, the tenant may be held liable for the following: the entire rent due for the remainder of the term; or all rent accrued during the reasonable period it takes the landlord to re-rent the unit, plus any difference in the previous and the new rent should the landlord have to lower the rent to find a new tenant, and a reasonable commission to find a new tenant. The tenant may also be subject to deductions for the security deposit should they not return the unit in the same condition it was in at the beginning for the tenancy (521-44(a), HRS). Additionally, the parties should review the lease document as there may be additional provisions that address the early termination of the lease.
So with that said, she is responsible to pay you rent for the next 5 months – or until you find someone else to take her position on the lease. If you have a provision in your contract where she can break the lease, then those conditions will come into play. Some contracts offer a dollar amount that the tenant has to pay as consideration for the landlord to allow them to break their lease. Regardless though, if a new tenant can’t be secured, then the tenant will still be obligated to pay the full rent until the end of the fixed term. In the event a new tenant is secured at a lower rental rate, then the current tenant is obligated to pay the difference between their rent and the new lower rent for the length of the lease term.
The tenant also needs to be advised that she can’t use her security deposit initially to cover the rent due either. The security deposit is generally held to cover such expenses as accidental or intentional damage, failure to return keys, cleaning, unpaid utilities and unpaid rents at the end of a tenant’s term. So she can’t automatically use the security deposit to pay her next month’s rent – leaving the landlord with no funds to cover damages and cleaning.
Communication is always the key in these instances. A tenant needs to advise the landlord of their intentions so that the landlord can adjust to the situation. In the event that this tenant does leave the unit owing back rents, the landlord has every right to take them to small claims court to collect amounts up to $5000.