Lease Breaking:
A Guide for Landlords

Krista Reuther: Hello, hello. You are here to learn about lease breaking. This is our guide for landlords. So we will go over the various things you need in your lease, along with some of the rules and regulations that you might not know about that could land you in hot water. Specifically, the key takeaways for today are going to be that you will understand why an eviction is not the same thing as breaking a lease and why we make a distinction between the two. We’ll also download you on all of the commonly speaking myths so that you can avoid litigation when you really don’t need it. And of course, we’ll be going over an early termination clause, what that is, how you can add it in, and what kind of language you need to make sure that you and your tenant are set up for success. All right. So kicking things off at the very top, why am I making a distinction between lease breaking and evictions? It’s a good question.

You might say that I’m being a little bit nitpicky and sure, maybe a little bit, but it’s for a good reason. Lease breaking is actually exactly what it sounds like, right? It’s where you are terminating a contract before its expiration date. We’re specifically talking about residential rental agreements.

Okay. So with this, there are a lot of different moving parts. Each state has its own rules about what constitutes a lease break, what’s legally covered, and what’s not.

But we’ll go over a national scope and also make sure to highlight some points where you need to do a little bit more research to make sure you’re in the clear for your specific situation. That said, commonly, lease breaking can incur a fee either on the landlord side or from the tenant. It will require specific notice to be given regardless of who initiates this proceeding. And really, it should be outlined in your lease agreement under an early termination clause so that everybody involved understands what kind of situations qualify for a lease break, the amount of notice that will be required, how that notice will be given, and of course, any other little bits and details that you need to make sure everybody’s on the same page about what to expect. So we’re going to nail this terminology, right?

We’re really going to get this. When we talk about evictions, evictions are more often more drastic than a lease break. This is something that invokes the courts pretty much all of the time, right? So you can start the eviction process with a notice to vacate, a notice to comply, etc.

But if it goes far enough down the line, you’re going to have to bring in the courts. That’s not the case with lease breaks most often. Similarly, an eviction is enacted only by the landlord. The tenant cannot evict you, right? Like that just doesn’t make sense. But a lease break could be enacted by either the landlord or the tenant.

So it’s either or situation. The last key difference that I want you to really take home is that an eviction typically stays on a tenant’s record, but a lease break doesn’t. So if you’re curious about that and about what that might entail, maybe you want to learn more about evictions, we have so much content for you.

This is something we talk about all the time. So I’ve linked out to a blog and a webinar in this deck. As I mentioned, we will be sending this deck over to you after our presentation wraps. So you’ll be able to check all of this information out as well. But today we’re really going to focus on the lease-breaking aspect.

One final note on this slide. The reason that there’s an asterisk on the tenant record is because there are states that do not allow the reporting of eviction history. I believe New York and Illinois are two, but Jeanne, keep me honest. I just know that those states typically have some kind of extra complication with their rules.

So if you’re a landlord there. Well, that that is tricky. Good for you.

Definitely get a little bit hairy with all the different laws and things going on. All right. So we have yet another poll popping up.

This is our second poll of the day. I just want to get a read on what you guys have experienced so far as landlords. So I want to know how many evictions have you gone through.

How many times have you broken the lease as a landlord and how many times have you had a tenant break the lease. There are no wrong answers here. I would say, you know, the our person, my personal stance on evictions is that it should be treated as a last resort.

There’s a disproportionate impact on evictions. If you want more information there again, check out the webinar. I won’t bore you with it here. But breaking a lease could come up for a variety of reasons, many of which we’re going to cover today. So, I’m going to give you a little bit of a quick recap about what this is all about. I’m going to give you all like 12 more seconds to make it a cool even 50 seconds.

But it’s really interesting to see these results starting to pour in. It looks like most of you as landlords have not broken the lease before. We’re looking at about 84% currently versus many folks having tenants who have broken the lease.

Certainly a scary situation, especially if you’re counting on that rental revenue to be flowing in. But don’t worry, we’ll go over everything you need to know. And look at that.

All right. So most folks have not gone through an eviction. That’s really great to see. To me, that indicates that you are, you have a lease agreement that’s working, you are getting people screened, you are setting up these relationships so that it doesn’t peter out. That’s not to say that if you’ve had an eviction, it’s your fault.

Sometimes, really, it is the last case scenario, but it’s one that you have to use. So just a sticky situation overall, but it also looks like we’re holding steady with most of us not having broken the lease, but at least half of us have at least encountered a tenant breaking the lease once, which is interesting to see. Okay.

So let’s talk more about that. When can a tenant legally break the lease? What I mean here is that there are situations in which tenants can break the lease without penalty, and this is on a national level. We’ll go into some differing situations and what that all looks like. But first, I have a very exciting game for you. So this is a little game we like to call, is it legal?

And I’m going to share with you a couple of scenarios and I just want you to tell me in the chat whether or not you think that the tenant can break the lease without penalty. Right. That’s what we’re saying when we say is it legal.

I’m saying is there going to be a penalty assigned? So let’s get started. Round one.

Very exciting. Mary moves south. So your tenant, Mary has rented with you for three years. She’s been offered a dream job in Antarctica. She’s going to be tracking penguins, I presume. But her contract starts halfway through your current lease agreement.

So does Mary have federal protection to break the lease without penalty because she’s moving for a job? Let us know in the chat. Go ahead and pull that up. Looks like most folks are saying no, no, no protection and says, yeah, let’s see. Yeah, most people are saying no, we’ve got a couple of yeses. That’s how you know this is a good game. Here’s the truth, guys.

No, a new job, no matter how exciting, is not a federally protected reason to break a less a residential lease. That’s just unfortunate, but true. Right. So if she is going to go out to the Antarctic, she is going to, you know, possibly face penalties for breaking this lease early regardless of her history with you.

As long as you have that language in your documents. Let’s play round two. Round two.

Two. Taj gets his orders. So you have a tenant named Taj he just moved in last week. However, he promptly received a permanent change of station orders he is an active duty military member. So he’s going to be moving to Kansas for the foreseeable future. Does he have federal protection to break the lease without penalty, given that he is moving for active duty?

See everything coming in people are like yes, yes, absolutely military is protected with proper documentation. Kendall you’re reading my mind. And says yes, Taj is as good as he should be. Yes, yes. You guys are smart cookies.

You’re absolutely right. So Taj would be protected under the service members civil relief act, and we’re going to talk about that a little bit more later, but the key pieces of information here is that one, he has received permanent change of station orders so that means that he is going to be gone for at least, I believe the cut off is 90 days but I have it on a slide. So he’s going to be gone for a significant period of time. He cannot be penalized even though he just moved in last week. If this notification came in. Before he signed the lease, then that’s a different conversation.

However, if a lease is signed prior to these orders being given, he’s federally protected. All right, last round here. Let’s go. We’re entering Howard and the mouse house. Okay, so nobody likes this kind of situation, but Howard moved into the property two months ago and has seen mice every single day multiple times a day since moving. He also is facing the fact that his hot water doesn’t work and neither do his sinks, his ovens also not turning on.

He reported these issues to his property management company upon moving so the same day that he moved in, he also let the property managers know it’s now been two months does Howard have federal protection to break the lease without penalty. Yes, lack of habitability says Albert when he says ye, Jeremy says no. Kendall if he has a solid case in communication history then yes, we’ve got some no some yeses no escrow only says Valerie.

Okay, quite a lot of differing opinions, which makes sense it’s a complicated issue. But Odle nailed it the landlord is obligated to provide habitable conditions, which means that yes, because Howard has given his notice he’s he’s communicated the issue with the property management company. And he is letting them know that this is an active ongoing situation that has not been resolved. That is going to mean if it continues to not be resolved, he can break the lease. This example actually comes from a real case in Dayton, Ohio, from just this year. So the tenant actually ended up withholding rent and that led to the landlord issuing an eviction notice that eviction notice was illegal.

So Howard was scheduled to appear in court but the landlords lawyers reached out with an agreement to get him out of his lease early without penalty, while providing time to move out without owing additional rent and giving back his security deposit without the conditions of the unit being used against him. According to the date and daily. So this really does happen. That’s why it’s so important, even though you might be like, Krista, I would never let my property get overrun by mice, I would never let this happen. It’s still good to know about because one, it just, it keeps unfolding. This is something that, unfortunately, is kind of routine in a lot of parts of the country so you need to know about it. And also it helps you be a better landlord by knowing that there are these different situations at play. Also also encourages you to take your, your tenants maintenance request seriously.

You really need to be up on that, especially if there is an infestation of sorts, especially if they don’t have hot water. And that’s where that is something that you are bound to deliver under the warranty of habitability. So, please, please, please make sure that you are doing right by your tenants. Otherwise they could both withhold rent and break the lease without penalty. So, with that in mind, let’s go over some of the specific situations that allow a tenant to break their lease without penalty. We’ve hit on a couple of these.

Let me swap that around first. Since we’ve hit on a couple, let’s actually look at the situations in which a tenant could face a penalty. So, according to the balance money.com, if your tenant needs to relocate due to a new job, again, we’ve covered this with Mary, that’s not a legitimate reason to break the lease. And on the flip, if they’ve lost a job and they’re unable to pay rent, they’re still bound to the terms of lease agreement, although at that point, you know, it’s a bit of a different conversation. You want to work with them so that you can make sure you’re getting something back and also not driving them, I don’t know, out into the streets.

But you know, it’s that balance of having an investment and needing money to come in but realizing they don’t have money and trying to find a solution that works for both of you. Also, if someone has purchased a home, that does not give them the right to break your lease without penalty. They are beholden to that lease agreement until it’s expiration date.

So that is something that they should factor in or that you should consider if you do have someone mentioning home buying. A couple of more reasons here, if there’s a change in relationship status, so they get married or they get divorced, that is not a good legal reason to break the lease. Now what you might run into, especially with the divorce situation, is that one person is staying in the unit and somebody else is moving. If that’s the case, you might want to re-screen the person who is staying just to make sure that they have the proper income to stay in that space. Could be that they were relying on the other person to provide some part of that income and rent could be up in the air afterward. But just make sure that you’re having clear empathetic conversations with your tenants when this kind of life change happens. And lastly, if they move in and they figure out that they don’t like the area, you know, that’s not, it’s unfortunate, but it’s not a valid reason to do that. They’re not willing to break the lease.

Okay. So these are all the reasons that typically tenants can be penalized if they, if they enact this and break the lease, right? However, if they do break the lease, even if it’s under a situation in which they don’t have federal protections, you cannot sit back and just sue them for the unpaid lease term without trying to reroute the unit.

So this is called your duty to mitigate damages. You need to be looking for an additional renter or otherwise someone to come and pick up that slack and move in. You can’t just sit back and wait and then sue them after the fact to say, hey, I didn’t have rent for six months. So now you owe me that rent.

No. As soon as they give you their notice, you should be trying to find somebody else to move in. If you have language in your lease that says that it’s the tenants duty to find that person, that’s a little bit of a different situation. But if that’s not in your lease, it’s your duty and you need to really make sure that you are pursuing an additional tenant. That said, your duty to re-rent has some limitations, including the fact that you can hold tenants responsible for the costs of advertising and showing the unit. However, if you do it for free on TurboTenant, you save you and your landlord some money while finding a great tenant.

That’s just a little sneaky plug there. I will also say that you have to take reasonable steps to re-rent the apartment, not heroic ones. So you don’t have to give special priority to that unit in order to re-rent it. You can really just treat it as you would any other vacancy. And that is your right as a landlord. You also don’t have to accept any applicant who walks in the door. You should still be screening these people. You should still be following your due diligence, regardless of the situation that led to the lease break.

And something that I really want to cap off here is that unfortunately a lot of landlords aren’t aware of their duty to re-rent for the benefit of the departing tenant. So just really take this home with you if this is the only thing you remember. Fine. Please watch the recording to remember some other things. That’s okay.

Just know that this is part of your job. You have to try and re-rent the unit. And that will help you both get somebody back in who’s paying you rent regularly. And let your tenant go off. If they don’t want to be in your unit, you don’t want them in your unit. Let them go.

Okay. I know it kind of, it might give you pause because you’re like, Hey, this person has, you know, given me a financial punch to the gut and I have to still do this work to try and find someone who’s going to take up their lease. Yeah, you do. That’s part of your job.

It’s unfortunate, but it’s part of your job. All right, so we’ve gone over some of the more negative parts. Let’s talk about why your tenant could legally break the lease without penalty.

So we have, of course, touched on bits and pieces of this. I will say once again, there are state-specific laws that come into play. So we’re going to cover this from a national perspective, but I would highly, highly encourage you to please go look up your specific laws. Because there are states where, for example, somebody being over a certain age can qualify them to break a lease. So look up your local laws.

It will make you happy and it will keep you compliant, which is really important. But on a federal level, you can usually expect the following to allow your tenant to break the lease legally. So if you fail to make repairs and provide maintenance, your tenant can break the lease and pursue legal action by going to court or reporting you to a government agency such as the Department of Consumer Affairs.

If you illegally enter your tenants unit, that can really quickly snowball into a reason for them to break the lease. You should never do that. Always give them the proper notification. It’s their home. It’s your property, but it’s their home. So you really need to be giving them appropriate notice in all situations that are not emergency situations. If you don’t do that, that is the number one way to one, ruin a relationship with your tenant, but to enable them to break your lease early because it starts to look like harassment. And that plays really nicely into the third bullet point here, which is of course harassment and privacy violations. If you are harassing your tenant, they have the legal right to leave. This protects tenants from feeling unsafe in their own home and harassment doesn’t just mean entering when you’re not supposed to, right? It can also include verbal abuse, physical threats, threats of eviction, destruction of their property, or anything else that makes them feel unsafe. If you’re saying, well, Krista, I have a property manager and they handle all of this stuff for me like there’s nothing I can do as a landlord that would cause this to unfold.

Make sure your property manager knows that if they undertake any of these actions, the tenant can still break the lease. It doesn’t have to be you. It just has to be someone attached to the property. And then you’ll be out a tenant and possibly facing litigation as well. So don’t do that. Okay.

This next bullet point is, of course, what we mentioned with Taj. If there is an active duty situation or a change of station orders have been delivered to a reservist, an active duty member, etc., the Service Members Civil Relief Act gives your tenant the right to break their lease without penalty. So this only really comes into play if the lease was signed before they entered active duty and will remain on active duty for a minimum of 90 days. They have to provide you at least 30 days notice to move. And you are allowed to ask for proof. You’re allowed to ask for a copy of the orders or otherwise get more information to validate the situation and then let them go. Okay.

A couple more points here. If your tenant is a victim of domestic violence, they can take certain legal measures to help them get out of their lease. There are laws in place to protect victims of domestic violence.

Typically, they have to give you 30 days notice. You can ask for proof. I am going to encourage you to tread with empathy.

Okay. Domestic violence is a very complicated crime and it’s a very painful situation for someone to be in. So the last thing they need is a landlord being cruel or unusual when it comes to gathering that evidence. So please, please, please tread with empathy if that is something that’s going on. Okay. Very last thing we want to talk about on this slide is just the fact that if your property is illegal, maybe it was zoned for, let’s say, an industrial area, or it’s just not habitable. That is a reason for tenants to break the lease with all of this, they have to give you notice. Typically, it’s at least 30 days.

Again, it might vary by your state. Okay. So you will be receiving notice. It’s not like someone can just wake up and say, hey, you entered my unit illegally last week and I’m moving out today. That’s not really the situation. It requires more conversations. It requires a specific notice be sent.

And you can dictate those terms in your lease agreement. All right. So I’ve thrown a lot of information at you. I’m going to pause here for a second and just take a quick look to see if there are any kinds of questions I can answer now. Okay.

How about when tenants are the ones to break the lease? Great question, Mario. We are going to cover that next. Oh, wait, I did cover that. So we did cover that. All right. Some interesting questions here.

Most of these seem like things we should address with Jeanne at the end. Jennifer, if a tenant pays rent via Zelle on time, does the landlord require to provide a receipt? For documentation purposes, I would just provide one. Your requirements are probably going to come down to the state level and what’s required in your area. So I would look that up.

But just to be safe, I would say make sure that you’re providing a receipt whenever possible. All right. And I see Jeanne is at work typing away in there.

So she might answer some of your questions before I reach them, but keep them flowing in. With that in mind, let’s talk about some situations in which you as the landlord can break the lease and why you might want to do that. First, we’re going to start with stuff that’s not true. We want you to understand some of the lease-breaking myths that often pop up so that you don’t get yourself into trouble. So as we’ve mentioned a couple of times during this presentation, there are state-specific laws and often county-specific laws that dictate when a lease can be broken. With that said, by and large, you can’t break a lease early on a whim, meaning there’s no documentation in your lease agreement.

You’re just deciding one day. You can’t break it early because you want to move in. You can’t break it early because you have a friend or a family member in need of housing, and you can’t just break it early because you decide to sell the property. Now, the big caveat with this is that your lease agreement is a binding document. So if you have information in your lease agreement that speaks to some of these conditions and everyone signs off on it, then there you go. You are set and you have specific stipulations in place for how this would have to play out.

We’ll get into some more of that language here shortly, but let’s look at some reasons why a landlord might want to break the lease. Okay. This is what we’re talking about that early termination clause. So like I said, we’ll get into some of that legalese that you need to include.

But for now, let’s hop into it. So your lease, your early termination clause really is just one of many contingencies that you want in your lease. The more contingencies, the more situations that you plan out in your contract and have signed off by both you and your tenant, the smoother your relationship is going to be the less headache that you have down the road if something does pop up that you weren’t expecting.

So really try and be thoughtful and put as much information in there as you can. With that, make sure that you have an early termination clause included in your lease. That early term clause should outline the situations in which you or your tenant can break the lease.

You’ll also want to make sure that you’re specifying how much notice you would require both to give to your tenant if you’re breaking the lease and you would require them to give to you if they’re breaking the lease. You can also dictate what form that takes, right? Maybe you want them to send you an email.

Maybe you want them to mail you a letter via first class postage. Just know that you should hold the same standards for you both, right? So if you tell your tenant, well, you need to give me 60 days notice and you have to mail me a letter by first class and then that’s okay. But then you turn around and say, but for me, I only get to like, I will only give you 30 days notice and I get to just tell you verbally. That’s not, it’s not a good contract. That’s not a good deal.

You should not do that. Keep it simple. Make the terms the same for both parties whenever possible. You’ll also want to dictate how much time the other party will have to get their affair in order.

So that kind of connects with the idea of the amount of notice required. But let’s say, you know, I’m landlord Krista. I’m going to my tenant and I say, hey, per our contract, this is your 30 day notice that I’m going to put my house on the market. I will let you know once it sells, but I will not kick you out in this first 30 days because this is your time to get everything in order.

If it doesn’t sell after, you know, on the 31st day, then I will give you a week’s notice before you have to be fully out. That way they have a plan in mind. They can get their affairs in order.

And it just again smooths out the relationship so that everybody can leave on the best footing possible. Lastly, you want your early term clause to include the penalties, if any for early termination. So it is really important to have that detail in there if you are looking for some kind of recourse if somebody breaks the lease early. Equally, you should consider what you would give to your tenant if you are having to break the lease early. So let’s talk about some of the average layouts of these clauses, right.

Again, I will say it until I’m blue in the face. I really want you to check your local landlord tenant laws before you draft this. However, on average what we see on a national level is that the amount of notice required is a minimum of 30 days. Sometimes ranges 30 to 60, but at minimum 30 days is the typical amount of notice that is listed out in an early term clause. In terms of the fee for a non-protected move out reason, like getting a new job, getting married, getting divorced, etc., is one two months worth of rent. Oftentimes, if it’s allowed in the state landlords will also tell tenants that they are forfeiting their security deposit by breaking the lease early. I would say that if you are going to have them forfeit their security deposit, just keep that in mind when you are assessing the fee for a non-protected move out reason. So maybe, you know, security deposit is oftentimes one month’s worth of rent. If you have that and then you have a fee of an additional month’s worth of rent that shakes out to two months worth of rent. Just keep a tally so that you know what you are expecting of that person and make it as fair as possible.

Alright. If your tenant is moving out for a nationally protected reason or a locally protected reason, like the age thing that I mentioned, you cannot charge them or withhold their security deposit for that reason. Now, if there’s damage, let’s say that they add a going away party and they play darts and they’re all terrible at darts. And so now there are a bunch of holes in the wall that weren’t there before. Of course, you can use the security deposit for that as you would any other damage in the house, right? So you’re going to make sure that you’re itemizing the different costs. You’re communicating with your tenant about what to expect with their security deposit and then sending them off the remainder if there is a remainder.

But just know that if your tenant is moving out for a federally protected reason, you cannot penalize them. That’s the whole gig. Okay. All right.

So a good pause point once again. Let me deep dive into the chat here. Linda, I’ve been very careful to put everything in writing. That’s a really great way to do it.

Peggy says California has crazy laws. Make sure you have good documentation on everything. I would agree. All right.

Let me see here if there are questions to answer. Vivian said this happened in August. They are gone, never paid rent. That is unfortunate. I’m sorry. All right. Nothing here that I’m going to tackle right at this moment. You guys are being lovely. I will continue on with the presentation once I move my little zoom bar.

Okay. So if you’re sitting there and you’re like, Krista, I don’t have an early termination clause in my lease. What am I going to do? Don’t panic. First and foremost, do not panic.

There’s always a way to update Elise. In this case, we would talk about a lease addendum. So a lease addendum, if you are unfamiliar, it’s a clause that is being added to an active lease agreement. So it usually happens sometime during the lease’s lifespan.

The thing that you need to know about lease addendums is that it’s required to be signed by both you and the tenant. Okay. So I’m going to show you really quickly how you can whip those up in TurboTenant in less than five minutes. And then we’ll talk a little bit more about what that might look like. So here we have the gorgeous John Martin. He’s going to walk us through how you might create a lease agreement if there’s not sound.

John Martin: Hey, yourself, the traffic movement and find a form to update your lease agreement. You can build one in TurboTenant in less than five minutes. Then you can send it out to be e-signed.

Let’s show you how. You can find the lease addendum at any time in the forms tab. You’ll find the lease addendum directly underneath the lease agreement. Click on the lease agreement again. If you’ve got the lease already created, you can just select it. If you don’t, you can create one really quickly like this. Let’s show you a little bit more about the process.

Does it sound good? Now you get to fill in your lease agreement. It’s useful to have your original lease agreement handy as you fill out this form. Since the addendum will be amending that, input the lease agreement details from the original lease. Now you can amend lease end date, rent amounts, your pet policy, or any other language you may put right here.

Krista Reuther: So this section is where you would put information about your early term clause. If you are adding it in. Again, it’s pretty customizable. You can throw it in there. Just make sure that you’re having either a good understanding of your local laws or you have a professional look at over for you so that you do not put something in there that you can’t actually abide by.

But it is really easy. We make it so simple to just create a lease addendum, add it onto your lease, get it e-signed, and then you don’t have to worry about it in the future. You already have everything laid out. The only thing I’ll mention with that is particularly because you would be setting an addendum regarding early termination. Just consider whether or not you want to wait out the lease’s expiry or add it in immediately.

I say that because if you add it in immediately, you have the benefit of having extra protection for you and your tenant just in case something goes south. But on the flip side, you might make them really nervous. You might make them nervous about an impending lease break because again, they have to sign off on this addition. Speaking for myself as someone with anxiety, if my landlord came to me and said, hey, Christy, I need you to sign this document about early termination and what that would look like for both of us, I would be thinking that I need to start finding somewhere new to live. So the best way to mitigate that is just by being transparent.

You could tell them, hey, I went to this excellent webinar with this just bombastic researcher who told me that this is something I’m missing in my lease. I’m adding it in, but it’s not something I’m pursuing at this time. I just wanted you to know in case anything pops up, we have a clear roadmap to follow. That way, you’re being transparent with them. You’re communicating why this is popping up now and you’ll quell a lot of that anxiety that could otherwise arise. All right.

So with all of this in mind, let’s come back to the key points that I really want you to remember for today and then we’ll go into some questions. So either a tenant or a landlord can break a lease, but your tenants do have federally protected rights in certain circumstances. That’s going to be things that we’ve talked about like active duty service members having to move, victims of domestic violence. If you fail to provide a habitable home, these are all reasons that somebody can provide notice to you and then leave and break the lease early without penalty. It is crucial that you know your local landlord tenant laws to avoid litigation, particularly as it applies to early termination of a lease agreement.

The best way to do that is to do a little bit of research and then make sure that you have an early termination clause in your lease that clearly outlines expectations for both parties because that is going to allow both you and your tenant to have a clear roadmap and understand how to navigate an otherwise choppy situation. Okay, so now we get to one of my most favorite parts. We are going to get into the Q &A. So I know I saw quite a few questions.

Jeanne, I would love to know your opinion on some of these, if not all of them, if I could be so greedy. Let me find you. Thank you.

So let’s see. What happens if somebody didn’t have an early termination clause in their lease and then their tenant decides, hey, I’m breaking this off. Maybe they’re four months and a six-month lease. How would you expect that to play out? Is there any action that the landlord could take?

Jeanne Sanford: Yes, but unfortunately it gets just a little more difficult and you have to go the route of the courts to collect any unpaid rent, small claims court. Usually for small claims it’s capped. Each state has a difference. So if you’re trying to collect under $7,500 you can use small claims court. If it’s a lot more money you would have to go the county court route. But small claims courts were designed to make it user-friendly so you do not have to hire an attorney. So I wouldn’t be afraid of that.

Krista Reuther: It’s no. Yeah, don’t be afraid of it. It’s something you can pursue. But definitely if you can have that language in your lease beforehand you’ll save yourself some of the heartache. To that end, Maple asks, if the tenant doesn’t pay rent after leaving the property but they break the lease, what do I do?

And it sounds like the answer is, pursue, decide if it’s worthwhile to pursue that in small claims court or your county court. Is there any other piece of advice you would give to Maple?

Jeanne Sanford: Just keep all your documentation. That’s going to be huge for your filing because then it’s easy. You know, the court will look at it and go, they’ve got all their documents right here. I can clearly see the path and then it just is quicker. So that’s my recommendation. Beautiful.

Krista Reuther: Thank you. This is just a question about lease addendums. But these, wow, this anonymous attendee says they have a current pet lease addendum for specific pets, specifically chinchillas, which are noted in detail. However, the tenant added an additional pet without notice. They’d like to modify the pet addendum and include that additional pet. Can they do that even in the midst of a lease?

Jeanne Sanford: Yes, you can draw a lease addendum in the middle of your term so long as both parties agree to it and sign off.

Krista Reuther: Awesome. That makes sense. Okay. And we have a couple questions about what happens if a tenant refuses to sign the lease addendum? Can they still be held to the addendum or what would you expect?

Jeanne Sanford: Unfortunately, no. You know, if they don’t agree to it, it’s not legitimate. So you would have to wait until the lease comes up for renewal and then add that provision in. And if they want to stay, they’re going to have to sign it. But it’s kind of that gray area if somebody doesn’t agree. Yeah.

Krista Reuther: Yeah. Again, that’s why it can get tricky. But when you are starting off a new relationship with a tenant, you have a fresh lease agreement. That is really the time before everyone signs off on it to put everything in as easily as possible. Of course, like we’ve mentioned, it’s still entirely within the realm of possibility that you could update your lease after the fact.

But since you do have to get everyone to sign off on it, it can cause extra friction. All right. Okay. So Robert says, one of the situations you put, you outlined was, ooh, the event in which they are selling their unit, but you can’t, oh, but can’t I sell my unit with a tenant in it, i.e. to another investor? That’s a really good question.

Jeanne Sanford: Yes, but you have to abide by all current leases until they expire. So tenants are protected in that way. And most buyers know that the property comes with existing leases.

Krista Reuther: Fair enough. Okay. And Fernando asked, when going to court, is collection guaranteed? Or is it possible that the tenant may not pay despite a court order?

Jeanne Sanford: It’s always possible that the person you’re going after just does not have the funds or any assets that you could come after or a job that you could garnish. So that’s unfortunately part of it, some debt is uncollectible.

Krista Reuther: Yeah. Unfortunately, and we have another person saying, hey, what’s the best way to get payment once I win my small claims court case for background and damages. Your court system will likely have some kind of recourse. They’ll sit, you know, I assume you’ll get the order and then you can either, I don’t know, Jeanne, let me stop talking. What is the situation like, how does that work if you win the court claim?

Jeanne Sanford: Mm hmm. Well, if usually there’s some kind of like negotiation and agreement at the end when somebody, you know, when everyone wants to settle. So you can say, hey, you will, you know, a payment plan. But you know, once you got the person there, I would try to collect them, collect the money. If they did not have, say, $5,000 that they owe you on their person to give you, you could go the garnishment route. If they have a job, you could garnish their wages. So as long as you have that order that shows that you have a valid claim, you know, that there’s, there’s, you know, other avenues to collect it collection agency, you could hire someone to go after them.

Krista Reuther: So yep, great advice. Thank you. They’re different, definitely different avenues you can take. Again, trying to recoup that money can be very difficult. So just see what works out best.

If you have peers in your area who have undergone similar things, or you have a landlord group that you can go and get some advice from people who have dealt with your court system specifically, that would be my recommendation to see if they have any specific tips or tricks that you can use to better the outcome. All right, Diana says, if your original lease addresses potential amendments needing to be signed or agreed upon, such as a lease could be terminated by either party, is that legal?

Jeanne Sanford: So are they saying if the lease, there’s a lease provision in there that says any party could break the lease? That’s what it sounds like. Yeah, I’ve seen that. And that’s based about, say the landlord is super flexible about his space and feels like, yeah, you know, because he knows like room rentals, you know, they’ll get another one in right away. So it’s fine to put that in your lease as long as both parties are understanding it and are in agreement to it. Fair enough.

Krista Reuther: All right, Vivian asked, oh, let’s see, my tenants painted and made a terrible mess. They painted on the ceiling and all the word work would be, I’m sorry, that sounds terrible. They never paid rent and left after two weeks. I can’t re-rent the unit till the damage is repaired, which will cost between $10,000 and $15,000. Late rent is accumulating. What do I do?

Jeanne Sanford: I would ask, was there anything in your lease that told the renters you cannot paint without prior permission? I mean, that shows there’s your damages. And all these things can be added up and submitted, you know, to the court for collection to get it back, but they owe that.

Krista Reuther: Yeah, yeah, they do. So it sounds like revisit your lease agreement, see what language is in there regarding these kinds of changes and whether or not they were allowed. But based on the dollar amount, it seems like you have, and assuming that you have proper documentation, right? So you need to take pictures of all of the mess, all of everything, keep that documentation, and then you can submit everything to the courts and try and have it play out there. But I’m sorry, that’s a very complicated situation.

All right. Okay, my tenants are aware, and it’s in the lease, that the basement is unlocked. They are allowed a portion for their storage. I had one tenant push me to put a lock on, which I did not. Was I legally correct? Again, they were made aware prior to moving in verbally and in the lease.

Jeanne Sanford: I’m not aware of any laws that state, you know, that these premises have to be locked. I think it’s smart to do that to protect everybody’s property unless there were separate areas that were locked for each person. So that’s a tricky one.

Krista Reuther: It is a tricky one. I would also say, yeah, just depending on who can access the basement, is this something that can be only accessed by being inside the property? Is this something that has an outdoor access? If there’s an outdoor access, I feel like that would be more of an issue if there’s not a lock on it, because that plays into the safety factor of living in the premises. But that’s a little bit tricky. I would check your laws.

And if you need to reach out to a local real estate attorney and let them chat through with them, because they’ll be more familiar with your specific county and state requirements.

That claim. All right. If you don’t have an early termination clause, but a situation has arisen in which you and your tenant disagree on mold in the property, how can you resolve this kind of situation?

Jeanne Sanford: I would first point out a lot of states do have a mold disclosure and a pretty strict law around mold. So make sure that your state, whatever state you’re in, I would check your laws on mold. It’s not something you want to play around with because it is a health hazard. And so I would say, your best bet is to fix it because you could become an inhabitable property due to the toxicity of the mold. So easier to just fix it, you’re going to have to anyway. There you go.

Krista Reuther: There you go. Alright. Can you address the scenario where a landlord needs to break or void a lease due to misrepresentation by the tenant on the lease application? So let’s say that I’m really sneaky and I falsified my employment information. I have netted this apartment. The landlord finds out. What would that landlord need to do, Jeanne?

Jeanne Sanford: You know, that is, you know, that is a lease violation when you misrepresent something on your application that will impact, you know, maybe he won’t be able to afford the rent.

So that’s a very valid thing. And, you know, I would check your state laws, definitely, to make sure you could break your lease on that term. But I think that is considered a lease violation.

Krista Reuther: Yeah, again, check your state laws. But by and large, I would expect Jeanne to be right. Celeste asks, if you’re converting your lease from year to year and switching over to month to month, is there a way to use an addendum instead of writing a new lease? So I’m thinking, can you put an addendum on a month to month lease?

Jeanne Sanford: I think the easiest thing to do is if you’re doing it when the lease term is up for renewal, just start a new one. I think it avoids any kind of confusion and it lets your tenants know that you’re moving to this kind of thing. A lot of leases say, you renew it a month to month lease. So check your lease term, see what it is. If that’s what you want to do, put it in the lease, you know, just have it everything up front. Yeah.

Krista Reuther: Love it. Have everything up front, have it in the lease as much as possible. And again, like you said, if it’s a month to month situation, you might just wait for the next month and then add it in at that point. Don’t try and be sneaky about it. You don’t have to be like, never know. But let them sign off. It’s better to have informed consent in these situations. Exactly. All right.

Jeanne Sanford: Just know that this is part of your job. You have to re-rent the unit. And that will help you both get somebody back in who’s paying you rent regularly. And let your tenant go off. If they don’t want to be in your unit, you don’t want them in your unit. Let them go.

Krista Reuther: Okay. I know it kind of, it might give you pause because you’re like, hey, this person has, you know, given me a financial punch to the gut and I have to still do this work to try and find someone who’s going to take up their lease. Yeah, you do. That’s part of your job.

It’s unfortunate, but it’s part of your job. Alright, so we’ve gone over some of the more negative parts. Let’s talk about why your tenant could legally break the lease without penalty.

So we have, of course, touched on bits and pieces of this. I will say once again, there are state-specific laws that come into play. So we’re going to cover this from a national perspective, but I would highly, highly encourage you to please go look up your specific laws. Because there are states where, for example, somebody being over a certain age can qualify them to break a lease. So look up your local laws.

It will make you happy and it will keep you compliant, which is really important. But on a federal level, you can usually expect the following to allow your tenant to break the lease legally. So if you fail to make repairs and provide maintenance, your tenant can break the lease and pursue legal action by going to court or reporting you to a government agency such as the Department of Consumer Affairs.

If you illegally enter your tenant’s unit, that can really quickly snowball into a reason for them to break the lease. You should never do that. Always give them the proper notification. It’s their home. It’s your property, but it’s their home. So you really need to be giving them appropriate notice in all situations that are not emergency situations. If you don’t do that, that is the number one way to one, ruin a relationship with your tenant, but to enable them to break your lease early because it starts to look like harassment. And that plays really nicely into the third bullet point here, which is of course harassment and privacy violations. If you are harassing your tenant, they have the legal right to leave. This protects tenants from feeling unsafe in their own home and harassment doesn’t just mean entering when you’re not supposed to, right? It can also include verbal abuse, physical threats, threats of eviction, destruction of their property, or anything else that makes them feel unsafe. If you’re saying, well, Krista, I have a property manager and they handle all of this stuff for me like there’s nothing I can do as a landlord that would cause this to unfold.

Make sure your property manager knows that if they undertake any of these actions, the tenant can still break the lease. It doesn’t have to be you. It just has to be someone attached to the property. And then you’ll be out a tenant and possibly facing litigation as well. So don’t do that. Okay.

This next bullet point is, of course, what we mentioned with Taj. If there is an active duty situation or a change of station orders have been delivered to a reservist, an active duty member, etc., the Service Members Civil Relief Act gives your tenant the right to break their lease without penalty. So this only really comes into play if the lease was signed before they entered active duty and will remain on active duty for a minimum of 90 days. They have to provide you at least 30 days notice to move. And you are allowed to ask for proof. You’re allowed to ask for a copy of the orders or otherwise get more information to validate the situation and then let them go. Okay.

A couple more points here. If your tenant is a victim of domestic violence, they can take certain legal measures to help them get out of their lease. There are laws in place to protect victims of domestic violence.

Typically, they have to give you 30 days notice. You can ask for proof. I am going to encourage you to tread with empathy.

Okay. Domestic violence is a very complicated crime and it’s a very painful situation for someone to be in. So the last thing they need is a landlord being cruel or unusual when it comes to gathering that evidence. So please, please, please tread with empathy if that is something that’s going on. Okay. Very last thing we want to talk about on this slide is just the fact that if your property is illegal, maybe it was zoned for, let’s say, an industrial area, or it’s just not habitable. That is a reason for tenants to break the lease with all of this, they have to give you notice. Typically, it’s at least 30 days.

Again, it might vary by your state. Okay. So you will be receiving notice. It’s not like someone can just wake up and say, hey, you entered my unit illegally last week and I’m moving out today. That’s not really the situation. It requires more conversations. It requires a specific notice be sent.

And you can dictate those terms in your lease agreement. All right. So I’ve thrown a lot of information at you. I’m going to pause here for a second and just take a quick look to see if there are any kinds of questions I can answer now. Okay.

How about when tenants are the ones to break the lease? Great question, Mario. We are going to cover that next. Oh, wait, I did cover that. So we did cover that. All right. Some interesting questions here.

Most of these seem like things we should address with Jeanne at the end. Jennifer, if a tenant pays rent via Zelle on time, does the landlord require to provide a receipt? For documentation purposes, I would just provide one. Your requirements are probably going to come down to the state level and what’s required in your area. So I would look that up.

But just to be safe, I would say make sure that you’re providing a receipt whenever possible. All right. And I see Jeanne is at work typing away in there.

So she might answer some of your questions before I reach them, but keep them flowing in. With that in mind, let’s talk about some situations in which you as the landlord can break the lease and why you might want to do that. First, we’re going to start with stuff that’s not true. We want you to understand some of the lease-breaking myths that often pop up so that you don’t get yourself into trouble. So as we’ve mentioned a couple of times during this presentation, there are state-specific laws and often county-specific laws that dictate when a lease can be broken. With that said, by and large, you can’t break a lease early on a whim, meaning there’s no documentation in your lease agreement.

You’re just deciding one day. You can’t break it early because you want to move in. You can’t break it early because you have a friend or a family member in need of housing, and you can’t just break it early because you decide to sell the property. Now, the big caveat with this is that your lease agreement is a binding document. So if you have information in your lease agreement that speaks to some of these conditions and everyone signs off on it, then there you go. You are set and you have specific stipulations in place for how this would have to play out.

We’ll get into some more of that language here shortly, but let’s look at some reasons why a landlord might want to break the lease. Okay. This is what we’re talking about that early termination clause. So like I said, we’ll get into some of that legalese that you need to include.

But for now, let’s hop into it. So your lease, your early termination clause really is just one of many contingencies that you want in your lease. The more contingencies, the more situations that you plan out in your contract and have signed off by both you and your tenant, the smoother your relationship is going to be the less headache that you have down the road if something does pop up that you weren’t expecting.

So really try and be thoughtful and put as much information in there as you can. With that, make sure that you have an early termination clause included in your lease. That early term clause should outline the situations in which you or your tenant can break the lease.

You’ll also want to make sure that you’re specifying how much notice you would require both to give to your tenant if you’re breaking the lease and you would require them to give to you if they’re breaking the lease. You can also dictate what form that takes, right? Maybe you want them to send you an email.

Maybe you want them to mail you a letter via first class postage. Just know that you should hold the same standards for you both, right? So if you tell your tenant, well, you need to give me 60 days notice and you have to mail me a letter by first class and then that’s okay. But then you turn around and say, but for me, I only get to like, I will only give you 30 days notice and I get to just tell you verbally. That’s not, it’s not a good contract. That’s not a good deal.

You should not do that. Keep it simple. Make the terms the same for both parties whenever possible. You’ll also want to dictate how much time the other party will have to get their affair in order.

So that kind of connects with the idea of the amount of notice required. But let’s say, you know, I’m landlord Krista. I’m going to my tenant and I say, hey, per our contract, this is your 30 day notice that I’m going to put my house on the market. I will let you know once it sells, but I will not kick you out in this first 30 days because this is your time to get everything in order.

If it doesn’t sell after, you know, on the 31st day, then I will give you a week’s notice before you have to be fully out. That way they have a plan in mind. They can get their affairs in order.

And it just again smooths out the relationship so that everybody can leave on the best footing possible. Lastly, you want your early term clause to include the penalties, if any for early termination. So it is really important to have that detail in there if you are looking for some kind of recourse if somebody breaks the lease early. Equally, you should consider what you would give to your tenant if you are having to break the lease early. So let’s talk about some of the average layouts of these clauses, right.

Again, I will say it until I’m blue in the face. I really want you to check your local landlord tenant laws before you draft this. However, on average what we see on a national level is that the amount of notice required is a minimum of 30 days. Sometimes ranges 30 to 60, but at minimum 30 days is the typical amount of notice that is listed out in an early term clause. In terms of the fee for a non-protected move out reason, like getting a new job, getting married, getting divorced, etc., is one to two months’ worth of rent. Oftentimes, if it’s allowed in the state landlords will also tell tenants that they are forfeiting their security deposit by breaking the lease early. I would say that if you are going to have them forfeit their security deposit, just keep that in mind when you are assessing the fee for a non-protected move out reason. So maybe, you know, security deposit is often times one month’s worth of rent. If you have that and then you have a fee of an additional month’s worth of rent that shakes out to two months worth of rent. Just keep a tally so that you know what you are expecting of that person and make it as fair as possible.

Alright. If your tenant is moving out for a nationally protected reason or a locally protected reason, like the age thing that I mentioned, you cannot charge them or withhold their security deposit for that reason. Now, if there’s damage, let’s say that they had a going away party and they played darts and they’re all terrible at darts. And so now there are a bunch of holes in the wall that weren’t there before. Of course, you can use the security deposit for that as you would any other damage in the house, right? So you’re going to make sure that you’re itemizing the different costs. You’re communicating with your tenant about what to expect with their security deposit and then sending them off the remainder if there is a remainder.

But just know that if your tenant is moving out for a federally protected reason, you cannot penalize them. That’s the whole gig. Okay. All right.

So a good pause point once again. Let me deep dive into the chat here. Linda, I’ve been very careful to put everything in writing. That’s a really great way to do it.

Peggy says California has crazy laws. Make sure you have good documentation on everything. I would agree. All right.

Let me see here if there are questions to answer. Vivian said this happened in August. They are gone, never paid rent. That is unfortunate. I’m sorry. All right. Nothing here that I’m going to tackle right at this moment. You guys are being lovely. I will continue on with the presentation once I move my little zoom bar.

Okay. So if you’re sitting there and you’re like, Krista, I don’t have an early termination clause in my lease. What am I going to do? Don’t panic. First and foremost, do not panic.

There’s always a way to update Elise. In this case, we would talk about a lease addendum. So a lease addendum, if you are unfamiliar, it’s a clause that is being added to an active lease agreement. So it usually happens sometime during the lease’s lifespan.

The thing that you need to know about lease addendums is that it’s required to be signed by both you and the tenant. Okay. So I’m going to show you really quickly how you can whip those up in TurboTenant in less than five minutes. And then we’ll talk a little bit more about what that might look like. So here we have the gorgeous John Martin. He’s going to walk us through how you might create a lease agreement if there’s not sound.

John Martin: Hey, yourself, find a form to update your lease agreement. You can build one in TurboTenant in less than five minutes. Then you can send it out to be e-signed.

Let’s show you how. You can find the lease addendum at any time in the forms tab. You’ll find the lease addendum directly underneath the lease agreement. Click on the lease agreement again. If you’ve got the lease already created, you can just select it. If you don’t, you can create one really quickly like this. Let’s show you a little bit more about the process.

Does it sound good? Now you get to fill in your lease agreement. It’s useful to have your original lease agreement handy as you fill out this form. Since the addendum will be amending that, input the lease agreement details from the original lease. Now you can amend the lease end date, rent amounts, your pet policy, or any other language you may put right here.

Krista Reuther: So this section is where you would put information about your early term clause. If you are adding it in. Again, it’s pretty customizable. You can throw it in there. Just make sure that you’re having either a good understanding of your local laws or you have a professional look at over for you so that you do not put something in there that you can’t actually abide by.

But it is really easy. We make it so simple to just create a lease addendum, add it onto your lease, get it e-signed, and then you don’t have to worry about it in the future. You already have everything laid out. The only thing I’ll mention with that is particularly because you would be setting an addendum regarding early termination. Just consider whether or not you want to wait out the lease’s expiry or add it in immediately.

I say that because if you add it in immediately, you have the benefit of having extra protection for you and your tenant just in case something goes south. But on the flip side, you might make them really nervous. You might make them nervous about an impending lease break because again, they have to sign off on this addition. Speaking for myself as someone with anxiety, if my landlord came to me and said, hey, Christy, I need you to sign this document about early termination and what that would look like for both of us, I would be thinking that I need to start finding somewhere new to live. So the best way to mitigate that is just by being transparent.

You could tell them, hey, I went to this excellent webinar with this just bombastic researcher who told me that this is something I’m missing in my lease. I’m adding it in, but it’s not something I’m pursuing at this time. I just wanted you to know in case anything pops up, we have a clear roadmap to follow. That way, you’re being transparent with them. You’re communicating why this is popping up now and you’ll quell a lot of that anxiety that could otherwise arise. All right.

So with all of this in mind, let’s come back to the key points that I really want you to remember for today and then we’ll go into some questions. So either a tenant or a landlord can break a lease, but your tenants do have federally protected rights in certain circumstances. That’s going to be things that we’ve talked about like active duty service members having to move, victims of domestic violence. If you fail to provide a habitable home, these are all reasons that somebody can provide notice to you and then leave and break the lease early without penalty. It is crucial that you know your local landlord tenant laws to avoid litigation, particularly as it applies to early termination of a lease agreement.

The best way to do that is to do a little bit of research and then make sure that you have an early termination clause in your lease that clearly outlines expectations for both parties because that is going to allow both you and your tenant to have a clear roadmap and understand how to navigate an otherwise choppy situation. Okay, so now we get to one of my most favorite parts. We are going to get into the Q &A. So I know I saw quite a few questions.

Jeanne, I would love to know your opinion on some of these, if not all of them, if I could be so greedy. Let me find you. Thank you.

So let’s see. What happens if somebody didn’t have an early termination clause in their lease and then their tenant decides, hey, I’m breaking this off. Maybe they’re four months and a six-month lease. How would you expect that to play out? Is there any action that the landlord could take?

Jeanne Sanford: Yes, but unfortunately it gets just a little more difficult and you have to go the route of the courts to collect any unpaid rent, small claims court. Usually for small claims it’s capped. Each state has a difference. So if you’re trying to collect under $7,500 you can use small claims court. If it’s a lot more money you would have to go the county court route. But small claims courts were designed to make it user-friendly so you do not have to hire an attorney. So I wouldn’t be afraid of that.

Krista Reuther: It’s no. Yeah, don’t be afraid of it. It’s something you can pursue. But definitely if you can have that language in your lease beforehand you’ll save yourself some of the heartache. To that end, Maple asks, if the tenant doesn’t pay rent after leaving the property but they break the lease, what do I do?

And it sounds like the answer is, pursue, decide if it’s worthwhile to pursue that in small claims court or your county court. Is there any other piece of advice you would give to Maple?

Jeanne Sanford: Just keep all your documentation. That’s going to be huge for your filing because then it’s easy. You know, the court will look at it and go, they’ve got all their documents right here. I can clearly see the path and then it just is quicker. So that’s my recommendation. Beautiful.

Krista Reuther: Thank you. This is just a question about lease addendums. But these, wow, this anonymous attendee says they have a current pet lease addendum for specific pets, specifically chinchillas, which are noted in detail. However, the tenant added an additional pet without notice. They’d like to modify the pet addendum and include that additional pet. Can they do that even in the midst of a lease?

Jeanne Sanford: Yes, you can draw a lease addendum in the middle of your term so long as both parties agree to it and sign off.

Krista Reuther: Awesome. That makes sense. Okay. And we have a couple questions about what happens if a tenant refuses to sign the lease addendum? Can they still be held to the addendum or what would you expect?

Jeanne Sanford: Unfortunately, no. You know, if they don’t agree to it, it’s not legitimate. So you would have to wait until the lease comes up for renewal and then add that provision in. And if they want to stay, they’re going to have to sign it. But it’s kind of that gray area if somebody doesn’t agree. Yeah.

Krista Reuther: Yeah. Again, that’s why it can get tricky. But when you are starting off a new relationship with a tenant, you have a fresh lease agreement. That is really the time before everyone signs off on it to put everything in as easily as possible. Of course, like we’ve mentioned, it’s still entirely within the realm of possibility that you could update your lease after the fact.

But since you do have to get everyone to sign off on it, it can cause extra friction. All right. Okay. So Robert says, one of the situations you put, you outlined was, ooh, the event in which they are selling their unit, but you can’t, oh, but can’t I sell my unit with a tenant in it, i.e. to another investor? That’s a really good question.

So Jeanne, to repackage that a little bit, do you have any knowledge of what that might look like if a landlord is trying to sell their property and also carry the lease over to the new owner of the house?

Jeanne Sanford: Yes, you have to abide by all current leases until they expire. So tenants are protected in that way. And most buyers know that the property comes with existing leases.

Krista Reuther: Fair enough. Okay. And Fernando asked, when going to court, is collection guaranteed? Or is it possible that the tenant may not pay despite a court order?

Jeanne Sanford: It’s always possible that the person you’re going after just does not have the funds or any assets that you could come after or a job that you could garnish. So that’s unfortunately part of it, some debt is uncollectible.

Krista Reuther: Yeah. Unfortunately, and we have another person saying, hey, what’s the best way to get payment once I win my small claims court case for background and damages. Your court system will likely have some kind of recourse. They’ll sit, you know, I assume you’ll get the order and then you can either, I don’t know, Jeanne, let me stop talking. What is the situation like, how does that work if you win the court claim?

Jeanne Sanford: Well, if usually there’s some kind of like negotiation and agreement at the end when somebody, you know, when everyone wants to settle. So you can say, hey, you will, you know, a payment plan. But you know, once you got the person there, I would try to collect them, collect the money. If they did not have, say, $5,000 that they owe you on their person to give you, you could go the garnishment route. If they have a job, you could garnish their wages. So as long as you have that order that shows that you have a valid claim, you know, that there’s, there’s, you know, other avenues to collect it collection agency, you could hire someone to go after them.

Krista Reuther: So yep, great advice. Thank you. They’re different, definitely different avenues you can take. Again, trying to recoup that money can be very difficult. So just see what works out best.

If you have peers in your area who have undergone similar things, or you have a landlord group that you can go and get some advice from people who have dealt with your court system specifically, that would be my recommendation to see if they have any specific tips or tricks that you can use to better the outcome. All right, Diana says, if your original lease addresses potential amendments needing to be signed or agreed upon, such as a lease could be terminated by either party, is that legal?

Jeanne Sanford: So are they saying if the lease, there’s a lease provision in there that says any party could break the lease? That’s what it sounds like. Yeah, I’ve seen that. And that’s based about, say the landlord is super flexible about his space and feels like, yeah, you know, because he knows like room rentals, you know, they’ll get another one in right away. So it’s fine to put that in your lease as long as both parties are understanding it and are in agreement to it. Fair enough.

Krista Reuther: All right, Vivian asked, oh, let’s see, my tenants painted and made a terrible mess. They painted on the ceiling and all the woodwork would be, I’m sorry, that sounds terrible. They never paid rent and left after two weeks. I can’t re-rent the unit till the damage is repaired, which will cost between $10,000 and $15,000. Late rent is accumulating. What do I do?

Jeanne Sanford: I would ask, was there anything in your lease that told the renters you cannot paint without prior permission? I mean, that shows there are your damages. And all these things can be added up and submitted, you know, to the court for collection to get it back, but they owe that.

Krista Reuther: Yeah, yeah, they do. So it sounds like revisit your lease agreement, see what language is in there regarding these kinds of changes and whether or not they were allowed. But based on the dollar amount, it seems like you have, and assuming that you have proper documentation, right? So you need to take pictures of all of the mess, all of everything, keep that documentation, and then you can submit everything to the courts and try and have it play out there. But I’m sorry, that’s a very complicated situation.

Krista Reuther: All right. Okay, my tenants are aware, and it’s in the lease, that the basement is unlocked. They are allowed a portion for their storage. I had one tenant push me to put a lock on, which I did not. Was I legally correct? Again, they were made aware prior to moving in verbally and in the lease.

Jeanne Sanford: I’m not aware of any laws that state, you know, that these premises have to be locked. I think it’s smart to do that to protect everybody’s property unless there were separate areas that were locked for each person. So that’s a tricky one.

Krista Reuther: It is a tricky one. I would also say, yeah, just depending on who can access the basement, is this something that can be only accessed by being inside the property? Is this something that has an outdoor access? If there’s an outdoor access, I feel like that would be more of an issue if there’s not a lock on it, because that plays into the safety factor of living in the premises. But that’s a little bit tricky. I would check your laws.

And if you need to reach out to a local real estate attorney and let them chat through with them, because they’ll be more familiar with your specific county and state requirements. That claim. All right.

Krista Reuther: Let’s see. Okay, to confirm, if the tenant breaks the lease without federal protection, the tenant is still responsible for rent until the landlord or tenant, depending on state law, has found a new tenant. Is that true? Yes, that is true. And you should have that language outlined in your lease in that early termination clause, just to make sure that there’s no confusion for many parties.

Krista Reuther: All right. If there’s any sort of violation and you do in fact need to pursue legal action, where do you turn to begin the process? The court itself, an attorney?

Jeanne Sanford: Like I said, small claims courts are very easy to use and they’re designed so a person does not need an attorney. And many, I think in our county that we live in Colorado, small claims court does not want an attorney in there. So I would start there.

And the court clerks are very helpful when you’re a first new filer. So I would, like I said it before, I wouldn’t be afraid of it. It’s there for that reason. Beautiful.

Krista Reuther: All right, a couple more questions. We also have a final poll for you. So I will ask the kind and effervescent Jonathan to, yes, he’s launched it. So let us know how we’ve done today.

Before we hit those last couple of questions, just want to remind you, if you are looking for a way to streamline your property management, we’ve got your back, you can sign up today, you can get a free account, if you really want to go hard, get a premium account, unlock all kinds of different benefits. But we still have a couple of questions to answer. So with that, Diana wants to clarify. So if a tenant refuses to sign a lease addendum, can you, can you just say, hey, you’re out, you can’t, if you’re not going to sign this, you don’t get to live here?

Jeanne Sanford: No, unfortunately, you have to wait until the end of the lease term. There we go.

Krista Reuther: And then Fernando asked, when going to court, is collection guaranteed? Or is it possible that the tenant may not pay despite a court order?

Jeanne Sanford: It’s always possible that the person you’re going after just does not have the funds or any assets that you could come after or a job that you could garnish. So that’s unfortunately part of it, some debt is uncollectible.

Krista Reuther: Yeah. Unfortunately, and we have another person saying, hey, what’s the best way to get payment once I win my small claims court case, that’s a lot of Cs for background and damages. Your court system will likely have some kind of recourse. They’ll sit, you know, I assume you’ll get the order and then you can either, I don’t know, Jeanne, let me stop talking. What is the situation like, how does that work if you win the court claim?

Jeanne Sanford: Mm-hmm. Well, usually there’s some kind of like negotiation and agreement at the end when somebody, you know, when everyone wants to settle. So you can say, hey, you will, you know, a payment plan. But you know, once you got the person there, I would try to collect them, collect the money. If they did not have, say, $5,000 that they owe you on their person to give you, you could go the garnishment route. If they have a job, you could garnish their wages. So as long as you have that order that shows that you have a valid claim, you know, that there’s, there’s, you know, other avenues to collect it collection agency, you could hire someone to go after them.

Krista Reuther: So yep, great advice. Thank you. They’re different, definitely different avenues you can take. Again, trying to recoup that money can be very difficult. So just see what works out best.

If you have peers in your area who have undergone similar things, or you have a landlord group that you can go and get some advice from people who have dealt with your court system specifically, that would be my recommendation to see if they have any specific tips or tricks that you can use to better the outcome. All right. Ooh, we’re right at time.

But this is one final question that I promise I’ll let you all go. If there is a co-applicant who needs to break the lease, but not all tenants vacate, what does someone do?

Jeanne Sanford: Co-applicant, not a co-signer, correct? Co-applicant needs to break. I’m just going to say, I think it’s their duty to find a replacement. If they’re leaving, then they’ve got to find that replacement. And once again, that would really be good to outline in your addendum if there are multiple parties on the lease. But if everyone signs, then everyone’s really liable for that lease term. So that’s what I’m going to say. Beautiful.

Krista Reuther: Well, everyone, thank you so much for being here today. Always a pleasure to chat through some of the nuances of being a landlord with you. Jeanne, thank you so much for your time and expertise. You are a shining light in this whole entire situation. So really appreciate having your knowledge on board. Everybody else have a great rest of your Thursday. Bye.