For those who have Early Termination Clause. My lease states This:

a) If Tenant breaks this lease in any way, the security deposit is not refundable.

Should it still be refundable if they use the Early Termination Clause?

Mine states:

Early Lease Termination Fee: $xxx.00. Resident may pay this one-time fee to end the lease early for any reason, including eviction, so as not be held liable for the remaining months of the lease. If not paid at time of move-out resident is required to pay for all remaining months. A 60 day, 2 month, notice is still required in addition to this fee.

The last one I did, I will refund. I just wondered what you all do?

What the others said... if they pay the fee as my ELT states and the property is returned as though they would normally would be leaving (proper notice, no monies due, no damages, etc) then the SD is theirs.

Deposits are refundable

Fees are not

I don't do ELTs but I do collect 2x the rent in security, so it matters to the tenant. So when they give notice they need to break a lease, I tell them to get the house showing ready and work with me on getting it re-rented. If I do and there are no physical or financial damages, they get their money back.

I always want to be the reasonable one if I ever have to explain a situation in court. I've learned to specify my penalties (ie, rather than "tenant shall give 30 days' notice..." "tenant shall not have an unauthorized animal..." it's "less than 30 days' notice results in a fee of $x" or "an unauthorized animal on the premises results in a fee of $y.") I also make my penalties significant enough to get attention, but not draconian.

My lease allows me to use the deposit to pay back rent, or make repairs to damages, or other things like that. But I make the proper deductions, list them, and provide an itemized accounting of how it was spent. I never say, "You did x so now you automatically forfeited your deposit." Instead, it's "You did x, and that cost $x. You did y, and that cost $y. You didn't do z, so that cost $z for me to do it for you. Your security deposit was $n. $n - $x - $y - $z equals whatever. Please pay this amount to square up your account/here is a check enclosed for the remainder."

Two things about your clause that says "If Tenant breaks this lease in any way, the security deposit is not refundable..."

1. They didn't "break the lease" if they activated the Early Termination Clause. They FOLLOWED the lease as you defined it.

2. I don't think your clause would hold up in court anyhow. You don't get to just keep a deposit if they "break the lease in any way." As an example, my lease says that their parking spot is the one closest to the door on my multi-units. If one day that happen to park in the spot next door for a few minutes to unload, they have "technically" broken the lease slightly. But no judge would allow me to just keep their security deposit because of that.

Long story short -- your lease clause that says that is very likely not enforceable. Like at all. Just FYI.

"Deposit" legally means it can be refunded.

I commend you on using the ELT. I have still not worked that into my lease. I wasn't aware of anyone in my area using it.

The SD is a separate issue, as mentioned earlier, and I would not think holding it would be right in this case.

Lucy,

Those are my words for your ELT. You are welcome.

It just one year that ONE clause, paid for my Porsche 911.

And yes, it solves MANY situations. My old judge LIKED it - said it gave the resident the freedom to leave when they want.

But our new judge said "Hmm...May or May not - so NOT". A $1900 lesson.

Change it to SHALL pay...

Zero,

Did you see the car???

Yes Brad, I saw the car. I ran it like I stole it for a short minute.

Things like that are why I do not say nay to new procedures.

I am stuck in the MTM realm. I had more problems with yearly leases but that was when we first started out and knew nearly nothing.

Yes Brad, thank you for the clause. I bought your lease at the meeting in St. Louis several years ago. It's paid off handsomely for this clause alone. It has not bought me a porsche, but it has kept my bills paid while re renting unexpectedly! I kept much of my own clauses due to familiarity, but am glad I added this one. And have had it come into play many more time than expected. In fact it keeps me from going to a month to month anytime I consider it.

And consider it done! SHALL

Just to clarify, is it Brad's sample lease that has this line?

"If Tenant breaks this lease in any way, the security deposit is not refundable"

Because, if so, then I seriously question that lease. You can't just write whatever crap you want in a lease and expect it to be valid. You can't just say "if you break any part of this lease, I get to keep your S/D." That's not how it works. That's not how any of this works...

Sorry, that came off more harshly than I probably should have said. Having a rough morning, I guess.

Put better: I think that most judges would have some concerns with a very open clause like that. You generally need to show damages to keep part of a S/D. You generally aren't allowed to do it as a "punishment" or "fine" for non-performance.

John, no Brad's lease has the wording for the Early Termination Clause.