By Leonard Baron
Hi Leonard – My tenants are nice people and have been good tenants, but they are struggling financially and cannot pay rent any longer. They are paid up and have offered to move out but would like me to release them from the lease if they agree to move by the end of the month. Any suggestions on how to handle this to minimize my costs? Arthur C., Falls Church, Va.
Hi Arthur – Yes many a landlord is experiencing this same situation, unfortunately, due to the economy. The main issue to understand is that rarely is a landlord like yourself going to collect rent if the tenants cannot pay. And usually, but not always, if you chase them into court you’ll spend more money that you probably will not recover.
Of course talk to others for advice and guidance, but if they are offering to move out if you release them, that’s probably going to get you the best outcome in this unfortunate situation. Make the release contingent upon your being able to show the property to other tenants while they are still there; their promise to keep it clean and tidy; and an ironclad commitment on their part to be out by a certain date and leave the property clean. Hopefully you’ll find another tenant to replace them from the date they will be vacating, and maybe you can even refund some of their security deposit – be fair with them, they’re already in financial trouble. Fighting with them will probably only cost you more money and more lost rental income, and it’s not worth the stress. Concentrate your energies on finding a new good tenant!
Landlord Foreclosed Upon
We rent a house where the landlord was foreclosed upon. We believe the bank took back the property, though we have not heard anything. We are concerned we will get notice that we have to quickly vacate the premises – and we would like some time to search for a new rental property. Maria P., Jacksonville, Fla.
Hi Maria – Most states have significant protections for tenants, and the Federal Protecting Tenants at Foreclosure Act of 2009 should also require the new owner to give you significant notice of potential requests to vacate the premises. So do some research on the Internet for Florida state laws and federal laws that protect tenants. If a bank took over the property, you may be able to negotiate “cash for keys” — money that the bank will pay you to leave the property in a reasonable time and in good condition. Again, do some research and wait to hear what the lender or new owner propose. Don’t stress; you have a lot of negotiating ability here. I always suggest act fairly and reasonably with the new owner, and you’ll probably get a very fair outcome. Good luck!
Leonard Baron is America’s Real Estate Professor®. His unbiased, neutral and inexpensive “Real Estate Ownership, Investment and Due Diligence 101” textbook teaches real estate owners how to make smart and safe purchase decisions. He is a San Diego State University Lecturer, blogs at Zillow.com, and loves kicking the tires of a good piece of dirt! More at ProfessorBaron.com.
Email Your Questions to: Leonard@ProfessorBaron.com