Fees target lease-breaking renters

Rent it Right
Published on Sep 11, 2009

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by CareyBot

Q: My tenant of several months moved out, breaking his year's lease with seven months left on it. The lease has a termination-fee clause, in which he agreed to pay one-and-a-half month's rent if he moves out early. I took that money out of his security deposit. Because housing is tight here, I was able to re-rent within a week. Do I have to return this fee? --Andre Z.

A: Termination fees, which compensate the landlord when a tenant leaves early, are increasingly popular, and some states are catching on and beginning to allow them. Here's how they work: The lease specifies that a certain amount will be due if the lease is broken, regardless of whether, or when, the landlord finds a new tenant. This agreement changes the default rule that applies in most states: Normally, th