Landlords - Tenant ends contract early

[black_2.5RS]

Question to those who own and rent out property. Here's the situation:

- Tenant signed a 12 month rental contract
- We received a 1 month damage deposit when we handed the keys over.
- Stayed only 2 months
- They are leaving b/c they are broke ass and cannot afford to fulfill the balance of the contract.
- Notice was given 2 weeks before end of month.
- In the rental contract, we did not specify any penalties to the tenant in the event of an early termination other than, if you don't tell us on the 1st of the month, we keep the next month's rent.

In the Alberta Residential Tenancies Act (http://landlord.landlordandtenant.or...lendfixed.aspx). It clearly states in the termination of a fixed term tenancy that:

"In the absence of any alleged fault by a landlord or a tenant, a fixed-term tenancy agreement can only end under the terms of the contract. "

Does that mean they must pay the balance of the rent? (in this case 10 more months?). This hardly seems right since they are moving out b/c they can't afford to pay rent anymore (so how do I get more money when they don't have any more money????)

Is it legal for me to add a clause similar to the cell phone companies that state in the event of early termination, you must pay $X dollars?

[v8mazda7]

Technically you could seek judgment for the full term of the lease but you would have to be a dick to do so and good luck on collecting the judgment.I would definitely keep the security deposit for both breaching the lease and insufficient notice. In the current rental market you should have no trouble finding new tenants that can pay the rent.
Daryl

[em2ab]

The only way to get money is to take them to court, local police won't do anything about it. And if you take them to court, the outcome I see on television courts is always the same. They have to pay for 90 days which is a "reasonable amount of time" to find a new tenant. And you've already got one month.

I just did the same thing, I signed a 6 month contract and gave my notice after 6 weeks. Left after 10 weeks and only had to pay for the time I was here plus my damage deposit.

[black_2.5RS]

Originally posted by v8mazda7
Technically you could seek judgment for the full term of the lease but you would have to be a dick to do so and good luck on collecting the judgment.I would definitely keep the security deposit for both breaching the lease and insufficient notice. In the current rental market you should have no trouble finding new tenants that can pay the rent.
Daryl

Yah, I thought about keeping the damage deposit but it looks like I can only keep the next month's rent. Based on the below ( again from the Tenancy Act ), damage deposits have to be returned (less any repair costs).

"No matter what circumstances end a tenancy, security deposits must be returned to tenants at the end of a tenancy, together with any interest owing. If deductions are made from the deposit for items such as damages, these must be itemized and an account sent to the tenant in the time limits and form required by the law."

[Weapon_R]

Landlords have the duty to mitigate their damages before seeking recovery from tenants. In most instances, judges will be far more sympathetic to a tenant over a landlord. Judges in Alberta have an inclination to side with those who have less than average means.

Even if you do recover, there is no way on Earth that a judge will give you a 10 month judgment. Instead, the judge will probably assess a reasonable amount (ie - 1 month's rent) because rental properties aren't too hard to fill right now and the judge will expect that you've made some reasonable efforts to rent your property.

If you do get a judgment, it's not worth the paper its written on if the tenant is broke. You can get all of the judgments in the world but if someone doesn't have the means to pay, you won't recover. A lot of tenants won't be familiar with their rights. I'd tell them that the security deposit converts to rent to cover the outstanding 10 months of unpaid rent and see how they react. Most of the time, a tenant in default won't even ask for the security deposit because they know they're in breach of contract.

[broken_legs]

The only way to get the 10 months rent is to take them to court and likely its going to be a tough battle.

My management company wont even sign tenants to termed leases anymore because of this very reason.


If someone wants to leave with insufficient notice of before the term of the lease is up your only real recourse is to keep the DD.

Lease is there to protect the tenant from rent increases mainly.

[brown_guy]

Keep the DD and look for new renter's ASAP..... tell them they will have to show the place with 1 hrs notice.. IF you find a new renter to take the place by the first.. then tell them you will give them their dmg back if there is no dmg to the place if not wish them all the best and tell them you will be keeping the dmg because you will be out of a renter for a next month... so that will give you one month to find a new renter.... This way you have good Karma on your hands

[Moe Man]

did you collect first and last months rent?

i collect DD first and last months rent before i give them the keys. and in this case if you did get first and last months rent and DD i would keep the last months rent and give back the DD cuz your a good feller.

but most importantly do checks on you tenants.

[Smokem]

Your security deposit can account for damges that include financial shortfalls too (ie. rent, utilities outstanding)... I do shared accomodation which shares utilities among the household, and due to timing of bills, etc. the renters never get their full deposit back because the bills are one month behind and I have to settle their secuirty deposit in 10 days following their leave.

If you evicted them by giving them two week's notice, then I assume rent is outstanding and you have every right to retain the damage deposit for rent.

If they gave notice and tf the terms of the contract state that you can keep the month's rent for not notifying prior to the 1st, then that is the specified penalty.

However, in either circumstances, I would come to an arrangement and understanding with the tenants outside of court and have them sign off on it to avoid further complication. In my tenant agreements, I specify a late fee for every day rent is late (ie. $5) and a termination fee for breach of contract ($100 administrative, including cost of re-rental and paperwork). There is nothing wrong with drafting up a rental agreement that is detailed and specific to avoid circumstances like these.

[Euro838]

Yeah, you'll never get a 10 month judgement, max will be 90 days but most likely 2 months. Chances are though, like others have mentioned, if they are broke-ass, it doesn't matter.

Best bet is to just move on and chalk this up as a learning experience.

[Smokem]

Originally posted by Moe Man
did you collect first and last months rent?

i collect DD first and last months rent before i give them the keys. and in this case if you did get first and last months rent and DD i would keep the last months rent and give back the DD cuz your a good feller.

but most importantly do checks on you tenants.

I may be wrong, but the courts can see collecting last month's rent upfront as security deposit, and you are not allowed to collect a security deposit for more than the value of one month's rent.

[D. Dub]

Originally posted by Weapon_R


If you do get a judgment, it's not worth the paper its written on if the tenant is broke. You can get all of the judgments in the world but if someone doesn't have the means to pay, you won't recover.

Thats simply not true. Wages can be garnisheed and the judgment can stand until there is a salary. I believe you can also get a Sherriff to do a property seizure to settle a writ of enforcement in Alberta.

I sued in small claims a few of years ago and it was a breeze. Set up the process garnisheed wages and collected my settlement no problemo.

[D. Dub]

To the OP.

I'd sue the deadbeats. What have you got to lose? A few hours and a little paperwork. Take a stand and get your $$. Don't listen to all the whiners and internet lawyers in this thread. Hell I'd sue on principle alone.

The tenants signed a contract - they defaulted - you sue - you make the effort to collect - why is this so complicated?

Alternatively, serve them the papers and offer to settle right now for 3/4 of what they owe you - you might scare them into settling.

[Moe Man]

Originally posted by Smokem


I may be wrong, but the courts can see collecting last month's rent upfront as security deposit, and you are not allowed to collect a security deposit for more than the value of one month's rent.

i do it all the time as i have had too many tenants up and leave.

sue me

no one has ever said you are not allowed to do that.

[MaLwa]

^^^ Ditto, i Charge an arm and a leg as a deposit these days.

[alloroc]

Originally posted by Moe Man


i do it all the time as i have had too many tenants up and leave.

sue me

no one has ever said you are not allowed to do that.

Sounds like a good idea, the last tenents we had pretty much trashed the place and refused to pay the last months rent. Both the police and the tenant advisory board said there was little we could do.

The odds really are stacked in the tenants favor, almost unfairly IMO.

[S4maniac]

Did you give them an eviction notice? Are you clear the 14 days?

If you have done the above, you can go to the courts and get a Seizure Order. Take the Seizure Order to a Sheriff and if the tenant lets them in the house, they can seize everything in sight. They can also seize a vehicle if its on the property (not on the street).

Once seized, the property cannot be moved or sold until the bill is paid. The bill is whatever damages you are claiming.

Now, if you didn't give them an eviction notice, you can't do any of the above.

[ricosuave]

here is a tip - stop calling it a damage deposit and start calling it a security deposit.

and FYI the security deposit amount cannot be more than the monthly rent by law

[Moe Man]

Originally posted by ricosuave
here is a tip - stop calling it a damage deposit and start calling it a security deposit.

and FYI the security deposit amount cannot be more than the monthly rent by law

last months rent is just that......rent not a security deposit.

therefor your "LAW" doesnt apply.

sue me

[ricosuave]

^ are you an idiot, or what? what does your comments have to do with anything?