Fees target lease-breaking renters

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, the landlord must make reasonable efforts to re-rent the unit; once it's re-rented, the tenant's obligation to pay rent for the balance of the lease term ends.

more...

To continue reading sign in to your Premium Member account.

Premium Members have full access to all news archives.

Buy Now Purchase 1-year Premium Membership - $149.95

OR

Buy Now Purchase Monthly Premium Membership - $19.95

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.