How Much Does Lease-Breaking Tenant Owe Landlord?

by Chris on September 16, 2013

Q: I signed a lease with a new tenant last month. The tenant was about to move in, and then decided not to. Now, the tenant wants me to return the last month’s rent and leave. Can they do that? Do I owe them that? I feel that they need to pay me two months to cover 60 days notice. At the very least, I feel that I should be able to keep the last month’s rent because I won’t be able to rent out the property for this month. It’s very stressful! – TVS Landlord

tenant screeningAs stressful as this situation certainly is, there is one bright side: at least you are getting rid of a problem tenant before he or she can do any more harm. There is no telling what other stunts this person may have pulled during the course of the tenancy.

This individual’s conduct highlights how important it is to review a rental applicant’s past rental history, in order to catch an applicant who has burned previous landlords. This tenant likely will omit this lease when completing future rental applications. He or she may fill in the gap by exaggerating time spent in a previous rental.

When screening tenants, it’s crucial to speak with previous landlords to verify dates of previous tenancies, and to run a credit report which may reveal addresses not provided on the rental application, as well as a pattern or irresponsible financial decisions.

Also, you may reduce the risk of renting to a chronic lease-breaker if you seek out applicants who have a reason to be in the neighbourhood. These tenants are most likely to stay for the term of the lease.

Other landlords can learn from your prudent practice of obtaining a signed lease agreement and collecting the additional funds in advance.

Your instinct that you are entitled to something for your trouble and income loss is likely correct. The question is how much are you entitled to:

Generally, a landlord has a legal duty to re-rent the property as soon as reasonably possible after notice that the current tenant is breaking the lease. The current tenant typically is liable for rent for any period of time that the property is vacant, so long as the landlord is actively pursuing a new renter. Other factors can come into play, like delays caused by damage to the property, or if your lease provides for an early termination fee, and that fee is not prohibited by the landlord-tenant laws in your area.

There may be a notice requirement in your local law that, in effect, requires the tenant to pay the next month’s rent. For instance, the notice period for termination of a fixed term lease may be 60 days, or the law may require a full 30 days notice, which will roll into the next month. Because these rules vary from one place to the next, in order to determine the applicable notice requirements, if any, you will need to review your local rules, check with your local tenancy board, or speak with a local attorney.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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