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.

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.

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 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.

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.

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.

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.

W,

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.

How do you write it in your lease? What about damage the sec was suppose to help with?

unit clean return is part of ELT.

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.

SID, I have asked. In official documents. Using wording I've found here.

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.

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.

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.

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.

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.

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.

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.