Break Lease Fee LOL!! (by WMH [NC]) Jul 7, 2019 2:48 PM|
Break Lease Fee LOL!! (by myob [GA]) Jul 7, 2019 3:15 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 7, 2019 3:20 PM
Break Lease Fee LOL!! (by Barb [MO]) Jul 7, 2019 3:55 PM
Break Lease Fee LOL!! (by Lynx [GA]) Jul 7, 2019 3:59 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 7, 2019 4:10 PM
Break Lease Fee LOL!! (by Lynx [GA]) Jul 7, 2019 5:43 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 7, 2019 5:57 PM
Break Lease Fee LOL!! (by Lynx [GA]) Jul 7, 2019 5:59 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 7, 2019 6:16 PM
Break Lease Fee LOL!! (by bet [MA]) Jul 7, 2019 9:21 PM
Break Lease Fee LOL!! (by BRAD 20,000 [IN]) Jul 8, 2019 1:39 AM
Break Lease Fee LOL!! (by Rob [MA]) Jul 8, 2019 5:51 AM
Break Lease Fee LOL!! (by myob [GA]) Jul 8, 2019 7:15 AM
Break Lease Fee LOL!! (by S i d [MO]) Jul 8, 2019 8:29 AM
Break Lease Fee LOL!! (by MC [PA]) Jul 8, 2019 9:18 AM
Break Lease Fee LOL!! (by WMH [NC]) Jul 8, 2019 4:54 PM
Break Lease Fee LOL!! (by 6x6 [TN]) Jul 8, 2019 6:13 PM
Break Lease Fee LOL!! (by ned [AL]) Jul 8, 2019 7:59 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 8, 2019 8:29 PM
Break Lease Fee LOL!! (by Sisco [MO]) Jul 8, 2019 8:33 PM
Break Lease Fee LOL!! (by CGB [MI]) Jul 8, 2019 8:55 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 9, 2019 7:34 AM
Break Lease Fee LOL!! (by Hoosier [IN]) Jul 9, 2019 4:05 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 9, 2019 7:38 PM
Break Lease Fee LOL!! (by BRAD 20,000 [IN]) Jul 10, 2019 8:41 PM
Break Lease Fee LOL!! (by WMH [NC]) Jul 11, 2019 9:11 AM
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Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 7, 2019 2:48 PM
Had a newer (May) tenant contact me and tell me she is now pregnant, due in January, and wants to break her lease in December because her place is too small. It is, it's a tiny 2-bedroom but a newborn isn't going to crowd her out by April! So I decided to try the whole break lease thing. LOL!
I sent her a letter outlining the responsibilities of a tenant when signing a lease in NC (responsible for rent until lease end or until re-rented) and the duties of a Landlord to try to mitigate damages if the tenant does break that lease.
BUT I also pointed out we didn't need to lower our standards, our rent or even drop other work to find another tenant if it interfered with other business. AND that we charged a $250 Administrative Fee to handle the early termination.
She said she had already found someone to take over her lease so did she really need to pay the fee?? I told her we still had to go through the process: preview questions, application, background check, lease change, lock changes, etc.
She said, "Never mind! I'll stay until end!"
Brad20k, I told you people down here won't pay an ELT. I have tried it a few times now - and I'm only charging pennies on the dollar - and NO ONE has taken me up on it.
But fine with me if she stays - I don't want to make extra money that way, I want to stay full! --50.82.xxx.xx
Break Lease Fee LOL!! (by myob [GA]) Posted on: Jul 7, 2019 3:15 PM
We make it cost prohibitive to terminate. It's in the lease BUT most think twice. WMH think about it -- does someone need to really need to move due to fresh baby in bassinet? She was just letting you know she's having a baby send a gift.
We make it expensive to to skip or walk. --99.103.xxx.xxx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 7, 2019 3:20 PM
But you can't chain someone to a house. No garnishment here, so collecting a judgment is almost impossible AND judges won't generally award more than a month's rent anyway.
I didn't put it in the lease, I don't want to codify how to break the lease in the middle of signing the lease. --50.82.xxx.xx
Break Lease Fee LOL!! (by Barb [MO]) Posted on: Jul 7, 2019 3:55 PM
I would still put it in the lease. I would add the full Early Lease Buy Out Fee to the lease.
I had 3 pay it in 2018, one at the last second. I had 2 pay it in 2017. I think I’ve had someone pay it every year since I put it in. Easier than changing them for rent when they moved out, and if I rent it right away, I don’t have to return any.
For my one-bedrooms that rent for 650 per month, I get $1150. Well worth the risk. --64.251.xxx.xxx
Break Lease Fee LOL!! (by Lynx [GA]) Posted on: Jul 7, 2019 3:59 PM
WMH, it all depends on how you handle it. It's in my lease and thoroughly explained in advance as a potential benefit to the tenant (which it is). My early termination fee is two mo's rent to legally break the lease. I've rarely, if ever, had a problem collecting this agreed-upon fee. It is fair to both parties. And as a Georgian, I'm further "down here" than NC. But unless you see that this is a mutually beneficial clause, you may over-explain or appear defensive when implementing it. I've collected several of these when I did 1-yr annual leases. Now that I've opted for 1-yr leases followed by automatic mo-2-mo, I collect fewer early termination fees because there is less reason to break the the lease. But I'm fine with this. It works for me. --99.122.xx.xxx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 7, 2019 4:10 PM
My rents are about $1200. So they would need $2400 to buy it out. Seems like a lot even to me, because I know it will be re-rented even before they leave IF THEY COOPERATE with me. Plus I know no one has it. So I *know* they would resent it - cooperating with me to re-rent would go out the window. As it is, I get 24-hour turn-around and 99% return of Security Deposits.
I am in a higher-rent / lower income / NO available housing market. --50.82.xxx.xx
Break Lease Fee LOL!! (by Lynx [GA]) Posted on: Jul 7, 2019 5:43 PM
The fee you set, if any, is up to you. It can be smaller, obviously. But if I were renting your house on a one yr lease, and 6 mos later I needed to move and you would not release me for free (which, knowing me, I'd probably try to negotiate), facing a $2,400 ETF would sound a lot better than a legal obligation to pay out the full $7,200 balance of the lease. Of course, if there was less than two mos left on the lease, clearly I'd pay out the lease, which would be less than the ETF, rather than pay the ETF. --99.122.xx.xxx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 7, 2019 5:57 PM
The issue is that they KNOW I can re-rent the space in under a month, probably within days. It's the nature of the market here. So they are very definitely going to resist an ELT fee, and feel resentful and develop an F You attitude if I impose one KNOWING it is nothing but profit to me.
I came up with the Administration Fee based on the thread down below. And honestly I don't WANT to deal with so many broken leases without consequences even if I don't lose any money (and in fact usually gain by raised rents...) --50.82.xxx.xx
Break Lease Fee LOL!! (by Lynx [GA]) Posted on: Jul 7, 2019 5:59 PM
Now if you are CERTAIN it will be rented before they leave, why have a lease to begin with? Why not just a mo2mo rental agreement? And as far as an ETF upsetting the departing tenant, it's never happened to me. They are generally relieved. If they don't have the full ETF, I take it out of the deposit then give them terms on the rest. Believe it or not, they've all paid so far. Never a complaint. But you have to believe it is fair to all parties, or it probably would't work for you. --99.122.xx.xxx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 7, 2019 6:16 PM
Because, Lynx, in NC only 7 days notice is require to break a M2M lease. Umm what? No. In my written leases, I require 60 days.
Their deposit does not begin to cover a 2x month rent broken lease plus any damages.
States differ in their laws. --50.82.xxx.xx
Break Lease Fee LOL!! (by bet [MA]) Posted on: Jul 7, 2019 9:21 PM
WE have Never had a problem collecting the 2 month buyout cause we dont give it back, last month and security deposit. thus far no one has challenged us and my lawyer states it's legal cause they agreed to it in writing before given keys. Can you do that there? --73.227.xxx.xxx
Break Lease Fee LOL!! (by BRAD 20,000 [IN]) Posted on: Jul 8, 2019 1:39 AM
Congrats on the admin fee idea.
Last week we received an ELT fee of $2200 in the mail without any messages or stories because it was written on the lease.
Break Lease Fee LOL!! (by Rob [MA]) Posted on: Jul 8, 2019 5:51 AM
How do you write it in your lease? What about damage the sec was suppose to help with?
Break Lease Fee LOL!! (by myob [GA]) Posted on: Jul 8, 2019 7:15 AM
unit clean return is part of ELT.
#1 proper 30 days notice to ELT. #2 1200.00 fee along with forfiture of deposit. #3 all money's owed must be current at 0.00. and #4 property must be returned in re rent condition. --99.103.xxx.xxx
Break Lease Fee LOL!! (by S i d [MO]) Posted on: Jul 8, 2019 8:29 AM
I dunno...sounds like a lot of folks here have no problem collecting the ELT...yours truly included. I think it must be something in how you're explaining it. A fee is a fee, regardless if the rent is $1200 or $600. My fee equals 6 weeks of rent. I've collected three so far in 2019. By contrast, I had two move-outs. So...batting .600, which any ball player will tell you is GREAT!
Ask and ye shall (maybe) receive.
Do not ask, and ye shall definitely not receive. --107.216.xxx.xxx
Break Lease Fee LOL!! (by MC [PA]) Posted on: Jul 8, 2019 9:18 AM
Make sure she is the one staying....A few unannounced visits for whatever reason you want. --73.230.xxx.xx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 8, 2019 4:54 PM
SID, I have asked. In official documents. Using wording I've found here.
NO ONE has taken me up on it. --50.82.xxx.xx
Break Lease Fee LOL!! (by 6x6 [TN]) Posted on: Jul 8, 2019 6:13 PM
I put an ELT fee in my lease as well due to this board of awesome people. I have no experience yet in using it but it is there to try if needed. I think you did a good job though at retaining the tenant and trying a fee. --73.120.xx.xxx
Break Lease Fee LOL!! (by ned [AL]) Posted on: Jul 8, 2019 7:59 PM
Even though I've only collected twice...I LOVE the ELT in the lease. Takes all the guesswork out of how to handle someone wanting to move. Like Sid, I believe 1.5 months rent is good place to be with the fee.
If it's too high, they won't be able to pay.
Too low, not enough of a deterrant against breaking lease. --70.92.xx.xx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 8, 2019 8:29 PM
Here is what I sent:
We received your notice that you would like to break your lease early. Below are some things you should know regarding a residential lease in North Carolina:
Tenant Rights and Responsibilities When Signing a Lease
A lease is a binding legal contract that obligates both the Tenant and Landlord for the set term defined in the lease. Tenants are legally bound to pay rent for the full lease term, whether or not they continue to live in the rental unit. The Landlord can’t raise rent or change other terms until the lease term ends, unless you have violated a lease condition that specifies that summary ejectment will result from noncompliance. In that case, your Landlord may give you an unconditional quit notice that requires that you move out immediately and may retain your Security Deposit to cover any damages, including financial damages.
Landlord’s Duty to Find a New Tenant
If you break your lease, even if you don’t have legal justification, the Landlord must make reasonable efforts to re-rent your unit. However, the Landlord does not need to relax standards for acceptable tenants - for example, to accept someone with a poor credit or eviction history, or whose income level does not qualify for the unit. Also, the Landlord is not required to rent the unit for less than fair market value, or to immediately turn their attention to renting Tenant’s unit, disregarding other business.
If a lease is broken, we charge a $250 administration fee to advertise, screen prospective tenants, show the unit and process new applications, effectively coordinate the new lease and the end of the old lease, and manage tenant transition dates.
How to Minimize Financial Responsibility If You Must Break The Lease
If you need to break your lease early:
Provide as much notice as possible, to give the Landlord time to find a suitable replacement tenant, but at least 60 days.
Give a firm and binding date in writing for when you will vacate the unit.
Make the place available to show at reasonable times with reasonable notice.
Keep the unit clean and in “showing” condition. Get rid of clutter.
And finally, leaving the unit clean, undamaged and in “ready to occupy” condition according to the terms of your lease will help to ensure that you receive a timely refund of your Security Deposit according to the North Carolina Tenant Security Deposit Act as well as a good reference for future landlords. --50.82.xxx.xx
Break Lease Fee LOL!! (by Sisco [MO]) Posted on: Jul 8, 2019 8:33 PM
W, as I recall from your previous posts that you are usually able to get much co operation from outgoing residents to show apartments to prospects.... and that you usually get apartments returned in move in ready condition.
Given the futility that you describe in contract enforcement through your courts, what causes the cooperation at turnover? That an ELT fee is an absolute no go seems inconsistent with their otherwise cooperative behavior. --72.172.xxx.xx
Break Lease Fee LOL!! (by CGB [MI]) Posted on: Jul 8, 2019 8:55 PM
WMH, I tend to say less in an attempt to say more. I would also not inform the tenant of your obligation as a landlord. "We have recieved your request to terminate your lease early. Please refer to clause X of the lease. We need 60 calendar days written notice and payment of X prior to returning the keys. You cannot use your security deposit as a portion of the fee. Even if they dont pay and you sue them, you are providing the judge with pre agreed upon damages. --67.149.xxx.xx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 9, 2019 7:34 AM
I would not bother to sue anyone for non-payment of a fee. First, I doubt magistrate would allow it if I was not financially damaged - they usually don't grant even late fees and those are allowed per law and are a much smaller dollar amount.
Sisco the cooperation at move-out is established before they move in! And because I do work with them: I give explicit instructions on how to get their security deposit back, and I keep showings to a minimum by grouping them all together, 5 at a time per pre-scheduled day, and we just tend to be good landlords in general, at least compared to our competition, we hear.
People don't break leases to simply move to another space. They usually have significant life events happen. --50.82.xxx.xx
Break Lease Fee LOL!! (by Hoosier [IN]) Posted on: Jul 9, 2019 4:05 PM
I have had 3 tenants want out of their leases early, and I have collected ELT fees on all three with no issues.
I should note the following:
1) I have class B properties...which I think is a factor...I think it would be more difficult to collect on a class C tenant.
2) On the first ELT, I had the amount set to low at about 60% of one month's rent...and I realized this after executing. Lesson learned, I've since increased it and now it's about 125% of one month's rent.
3) I do not allow the ELT clause to be used until at least the 6th month of a 1-year lease. If I did, I'd have a lot of summer interns use it after living there only 2-3 months...and there is a very high demand for this type of "short term" housing here for such professional interns. I've offered short leases to these people at higher than normal rents...but they think it's too high and to me the cost of tenant turnover is too high to go any lower on the rent. --99.92.xxx.xxx
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 9, 2019 7:38 PM
WOW Hoosier you just made me realize why I am so resistant to this model! We live at the beach, people want summer housing for annual prices... --50.82.xxx.xx
Break Lease Fee LOL!! (by BRAD 20,000 [IN]) Posted on: Jul 10, 2019 8:41 PM
Just received another ELT from boyfriend who wanted off the lease (that’s an extra $4000 cash in just the first 2 weeks of July)
Girlfriend replaced him quickly - brought in a roommate to help cover rent.
It’s printed on the lease. They pay. No discussion needed.
Millennials are used to it with cellphone contracts, etc. They LIKE backdoors to escape responsibility.
Break Lease Fee LOL!! (by WMH [NC]) Posted on: Jul 11, 2019 9:11 AM
Right, Brad, but note my reply to Hoosier above: if this was "allowed" under my lease, I would have people rent my houses May through September at "bargain" (non-summer, annual) rates, pay the ELT and leave with good consciences and no ding on their rental record. $2000 to end the lease would be a bargain over paying the 3 times more per month normally charged for seasonal housing. My $1200 house could be rented for $3600 to summer workers, but we choose not to follow that biz model. Because it would leave us looking every fall for new tenants.
$1200 * 5 = $6000 + $2000 ELT = $8000. Seasonal rate would total anywhere from $12,000 to $18,000, depending on whether you charged 2 or 3 times the normal rent. So anyone can see that the break lease fee would be a bargain.
Hoosier's comment rang that bell in my head. I had done this math long ago and realized what would happen! --50.82.xxx.xx
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