Hi,

I have a new young tenant (late twenties) who signed a 12 month lease 6 months ago. Today she texted me to let me know that she lost her job. She doesn't want to be evicted and offers to civilly move out of the apartment... Ok I appreciate that she's being upfront and offers a good solution (eviction in Chicago is stressful and expensive, the law is really bias against LL). Do you guys think I should at least verify her story that she really loses her job? However if she made up the story (to get out of the lease), she would plan it with her boss and I wouldn't know the true story. Also, I don't think charging someone who lost the job the lease breaking fee would work.

In TX, I can't garnish. If someone wants to leave, I don't have any ability to financially penalize them for breaking a lease. So that I don't bind myself to a stricter set of rules than my tenants play by, I do everything mtm. Sometimes people move in Dec/Jan/Feb... but that's the trade-off for getting control easily.

I have people lie to me about why they want to move. ("I need to go move in with my sick parents!" when it's really his newest girlfriend, for example. Info courtesy of FB.) But I don't really care-- as long as I get possession, the ability to clean up, rerent, and move on with my biz. Because that's my priority, rather than doing business with one particular person. When that one particular person I'm able to do business with no longer wants to maintain that business relationship, I listen to them and let them go, even if they're great, or I like them personally, or if they've been responsible.

In Texas, in my lease, I'm able to use the security deposit to cover back rent, repairs, damages, etc. They sign that, just like they sign the rest of the lease.

In your case, you're restricted by Chicago ordinances, Illinois law, and the terms of your lease.

In your lease, how does it spell out the process for breaking the lease?

In your lease, for the next person, how can you change the terms so that they're more favorable to you/invisible to the tenant/uninvolving the legal system?

Ignoring this particular situation, spell out your own processes in black and white, have them agree to it. Now there's no question for the next time this situation happens.

Deanna[TX], thanks for your reply. Same here. The way I view is that if the tenant doesn't want to do business with me, I let them go. Ok, you voted for not verifying the story. I don't have the agreed penalty if she doesn't maintain the full 12 month residency. The tenants are on the hook for rent payment for 12 months. Also, we (LL) are on the hook to give them the place for 12 months at the agreed rent. Do we need to have an extra penalty for not completing the 12 months? She owes the money for the remaining of lease term. I thought that's obvious. No?

If you don't already have an agreed-upon penalty that's part of your lease, then make one up that makes you happy and get her to agree to it now, while she's motivated. :) 150% of one month's lease is normal around here. The security deposit is handled separately, in case there are additional damages.

Or, you can do things the slooooow way, where you try to get 6 months' owed rent through a hostile legal system from someone who may or may not be jobless, but will still have her usual housing expenses anyways, but may be made easier if garnishing is an option.

But the big thing is to figure out what has the most value to you--- get possession, clean up, rerent, and a small amount of money for the hassle, or if it's more important to you to be right and hold her to the letter of the agreement, even if it's more expensive and drawn-out.

I quit leases 20+ years ago and have never regretted it. Applicants are sometimes surprised about this and that's when I tell them that if they don't want to live there, they can leave, and if I don't want them to live there, they can leave.

I just assume that every excuse a tenant tells me is a lie.

You can not force a tenant to stay. If you have a lease break fee in your lease then you point that out and tell them you are sorry that they are leaving and wish them luck.

In my area security deposit may only be used for damages, and landlord has an obligation to try to mitigate damages. Early termination fee would be one of the ten deadly sins, making the contract void, thus requiring returning all money acquired under the false contract. I’ve listened to this several times at Rental Property Association meetings, and am certain I understood correctly. Now, new legislation can be passed that can change this, but that is how it is for now. Your city may be different, of course. Or, you could get to be the case that makes my states’ caselaw the law in your state! Ouch!

Chicago,

Another sad case of Wimpy-Lease-Itis. Your lease is incomplete, leaving you in the lurch.

Leaving early for ANY reason is normal, everyday LLing. People leave when they want no matter how tough your clauses, so I add a clause to MAKE ME MONEY when they do leave.

You cannot just keep her deposit - deposits must be applied to fees or financial damages.

Deliver this in writing (Email or text or taped to the door):

STANDARD POLICY

Resident may end the lease early by paying the Early Lease Termination Fee of $_____. Cleaning and repair costs at $75/hour still apply.

Make this a straight out FEE, not a factor of the rent amount.

-Do a walk thru NOW to see the condition of the home. Keep you work and lost time to a minimum with a Move Out Checklist.

-re-rent quickly, often at a higher price.

-And relax. 12 months is just an arbitrary figure we LLs traditionally use to offset the cost of re-renting.

Good luck - this works.

Thank you everyone for your reply.

plenty[MO], no I don't have ETF in my lease. She hasn't paid January rent yet. No, I didn't collect last month rent before moving in. Only first month rent + $1000 deposit. I haven't talked to her about departure date. I assume that she would leave very soon in January because she's a responsible person. Thanks for another vote for not verifying.

Deanna[TX], frankly I would be happy to keep the deposit and she give me back the apartment ASAP. So I could re-rent... I agree with your "do it fast" recommendation. I have more to lose fight with her legally. The laws and the judges here are crooks. You're right that getting possion is the most important for me. Like you, I would prefer to move on.

Tim[CA], My San Francisco LL said it's almost impossible to get tenants out of your rental. He had to offer $20K for them to move. The court will not kick the tenants out even if the LL wants it back. That's the worst state to be a LL IMO.

Oregon Woodsmoke[ID], you've got a good point. She wouldn't clean if knows that her deposit is gone anyway. However it's dangerous to have the tenant expecting the return of the deposit but don't get, and later try to come after me for the deposit. Yes, returning deposit is the big issue in Chicago.

Busy[WI], yep I only want to do the business with tenants who want to do business with me.

Brad 20K[IN], "12 months is just an arbitrary figure we LLs traditionally use to offset the cost of re-renting" --> you're so right :-) I'm surprised that even the state with more fair LL tenant laws like Indiana wouldn't allow LL to keep deposit when tenants want to skip the lease.

Lessons from the hood .....

Tryan, our judges too. That's why I get the max legal deposit of 2x the rent at lease beginning, and I up it every time I raise the rent so its stays current.

If she has been a good tenant for the last 6 months I would at least talk to her to verify her story. And go from there.

The story makes no difference to me.

I still rent MTM tho, so I do not have an ETF. I believe that if a tenant is not happy there they need to go elsewhere. I still make them responsible with 30 days minimum notice.

Leave the deposit alone until she is gone. Then decide what you need to do with it and get the remainder back to her.

I have added lost rents to my damages report and been allowed to take it out of the SD. Check before to be sure it will go thru in your area.

Interesting and glad she told you in advance. I wouldn't verify, as others have said, whatever the reason she feels she needs to move.

It's always a crap shoot; they really do go when they want. Now's your chance to up the rent sooner than you planned, but if she's been a good tenant, I sometimes leave the door open. Like, "if your situation changes, check with me if you need a place."

Several times I've had tenants tell me they will be moving at the end of their lease, only to extend (at the new rate) 3 months at a time or more. I need 3 months rather than a month. I learned years ago that I don't want anyone who can move in right away.

One moved out to move in with her boyfriend, only to be back 3 years later.

When one of my tenants lost her job midway through her lease, I never knew. I found out in passing when she moved at the end of her lease. She said it took her two months to find another job.

"The laws and the judges here are crooks. You're right that getting possion is the most important for me. Like you, I would prefer to move on."

"Tim[CA], My San Francisco LL said it's almost impossible to get tenants out of your rental. He had to offer $20K for them to move. The court will not kick the tenants out even if the LL wants it back. That's the worst state to be a LL IMO."

I've detected here the "story behind the story." The story here isn't about ONE tenant wanting to break ONE lease. The story here is why is Chicago LL willing to be an investor in a place where 'the laws and the judges are crooks' and 'this is the worst to to be a LL IMO?"

Sell. Get out. Now. Give you tenant the keys and let the new LL deal with her. Invest where the laws and the judges are fair and treat landlords well.

Or stay put and we'll be here to advise you the next time someone screws you over in 3, 2, 1.... (*grins)

Seriously, get out of bad states with bad laws and bad judges.

But SID there is definitely opportunity in places where others don't want to invest. Section 8, Mobile Homes, Apartments, bad neighborhoods, bad houses, etc.

Everyone can't just sell and move - and right now investing in RE is quite tough everywhere, with all the amateurs getting into the business, and the major investors owning 50% of the housing nationwide.

Chicago needs to adapt their processes in order to make hay in his/her own field.

I have always found the best tenant can break their lease and my biggest rewards come from working with them, not fighting them, then getting the place re-rented at a higher rent, and moving on with no loss to us.

I am facing my first real vacancies in years: one tenant breaking their lease, one lease ending, no one behind either one, the places WILL go empty December 30th.

Both are cleaning to the lease. One is having a cleaning person in, one IS a cleaning person.

Ray-N-Pa[PA], agree

tryan[MA], What's ELT? Yep I thanked her for being proactive.

wmh[NC], 2X rent deposit sounds like a cool plan :-)

PG[SC], yes she's a good tenant. I just want the unit back to re-rent.

Dodge[PA], I offered her $500 referral bonus if she could refer someone her caliber to sign the lease. Fingers crossing here

6x6[TN], agree

MC[PA], she said end of January and asked for using her deposit to pay for last month rent. I said ok. I just want her out without the costly/lengthy/stressful eviction

zero[IN], agree. BTW she didn't over spend on holidy. She lost her job.

Oreo[WI], extend with paying is the best outcome. What I'm afraid of is stay without paying. I hate eviction

S i d[MO], Don't tempt me Sid :-) The thought of moving out of bad states has crossed my mine. However I'm not a young pup to start in the new location. In fact, I'm in the process of phasing to early retirement.

WMH[NC], "Everyone can't just sell and move" thanks for this :-)

"I am facing my first real vacancies in years". I started experiencing that it takes longer to find a qualified tenant as well.

ELT is "early lease termination" .

You can't enforce it .... and neither can I.

State law are cyclical .... even MA had a good governor than LIMITED WELFARE PAYMENTS TO 5 years.

Show me the rules .... I'll win the game playing in the grey area.