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LocalHero

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Posts: 22
Reply with quote  #1 
One of my tenants renewed her lease for 6 months which would carry her to the end of February.  She just asked me if I could find someone to take over her lease as she is intending to move in with a friend.  She's a good tenant and has made it clear that she intends to continue paying the rent until we find someone appropriate. 

I'm aware that this is likely to take some of my time and energy and it seems some sort of fee would be in order but I don't know what.   This is not typically a good time to rent a place out with the holidays approaching and I have always been picky about my tenants so I often end up meeting/interviewing several before the right one comes along.   That said, I keep the places up nice and the rent reasonable so I rarely lose a month between leases and often have tenants who stay multiple years.  

The rent is currently $1300/mo and I collect first mo, last mo and security deposit up front.  So what are thoughts on an appropriate amount to charge for finding a new tenant to take over the existing lease?

Thanks!
LLinVA

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Posts: 550
Reply with quote  #2 

I don't think you should. You might not even be allowed to. Definitely charge rent until you do, but I wouldn't hit her for more than that. State law may prohibit it, and even if that's not the case, if it's not in the lease, you will have almost no chance defending it.

Just be thankful she's being so cooperative. I think now is better to find a tenant than February...

LocalHero

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Posts: 22
Reply with quote  #3 
Hmmm, It seems to me that she's asking to break her lease so the lease terms would be open to renegotiation.  I appreciate her being cooperative, but I expect it as well, just as I am being.  It's also one reason I collect first, last and security dep... I no longer have folks breaking the lease or telling me that the security dep IS the last month's rent when their last month comes up.

That said, I'm only asking what I think to be reasonable.  I self manage my properties but I'm sure a property manager would charge a fee in such a case. (they charge fees for everything).  I would be fine with setting a maximum fee amount, but charging less or even nothing if it turns out to be easy to find a replacement tenant.   I'm afraid it won't be at this time though.  My experience has been that it's easier as spring approaches than now.  

I get it though... your vote would be to charge nothing.  

Thanks,
John
LLinVA

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Posts: 550
Reply with quote  #4 

Does the lease say anything about early termination?

I'm just looking at it this way, she can leave in February when it's definitely harder to fill, or she can leave now when you'll have an easier time filling it. Maybe it's not as easy as renting in May, but it's easier than February.

I'm not sure early termination would constitute renegotiating the lease. If the lease doesn't say anything about early termination and your state law doesn't answer the question, then I could see arguing that in exchange for allowing an otherwise prohibited early termination, you'll take a fee. I just don't see the point in a situation where you get rent for as long as it takes and she's giving you the best possible option this could ever go. 

LocalHero

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Posts: 22
Reply with quote  #5 
I use the standard SC Assoc Of Realtors lease. It doesn't specifically mention "termination fee" but the language reads:

REMEDY AFTER TERMINATION: If the rental agreement is terminated, the Landlord has a right to possession, for rent, and a separate claim for actual damages for breach of the rental agreement, reasonable attorney's fees, collection costs, and court costs.

I don't see anything in that that suggests I could charge a "fee" above expenses, and you may be right that I don't have the legal standing to charge a fee in SC.  Getting reimbursed for any expenses does seem clear. 

I've rented units at all times of year and in my experience, a lease starting on March 1st is easier to fill than one starting Nov 1st.  It may be different in your market..  That said, you can always get lucky with the right tenant looking at just the right time.  There's no absolute rule and it's often just synchronicity.   

The point of a fee seems obvious from my view.  By breaking the lease, she's causing me extra time, effort and likely expense that I wouldn't have if she didn't break the lease. From what I've gleaned via google search, it seems that an early termination fee is pretty standard in apartment complexes and that it's often one month's rent.  I'm sure they use their own lease agreement that spells this out though.    I suspect they do that because they know they really aren't going to pursue a tenant in court over a broken lease and this gives them clear right to keep their deposit.

I've never charged an early termination fee before and I always work with my tenants as much as possible but it does seem like a reasonable fee to me.  If I end up fielding lots of phone calls and showing the property to, and interviewing a lot of applicants, I'll have a serious amount of time into it.  
Edit: If I were using a PM, I'm sure there would be a charge for finding a new tenant.  Why would a charge when doing that job myself not be just as reasonable?

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