Over the years GWM has seen several different early lease termination situations. They range across the spectrum in terms of ease and accommodation to all-out war between Landlord and Tenant, but one thing is for certain; without a legal reason for breaking the lease, there is going to have to be some sort of compromise or settlement between Landlord and Tenant if penalties are to be avoided.
In truth a Landlord may hold a Tenant financially responsible for re-marketing the property, leasing commissions, and lost rent. In reality, the Landlord would rather negotiate a flat fee settlement that is positive for both parties.
There are two typical settlements that we see that seem to leave both Landlord and Tenant walking away in a win-win situation.
The first settlement is when the Tenant pays a flat marketing fee (usually $200 -$300) and the Landlord begins to Market the property for rent. The Tenants assist with showings and when a suitable prospect is found, the property is leased. It is not a sublease, so the Tenants simply vacate the premises (following lease guidelines for moving-out) and their obligations are finished. The Tenant does a lot of the leg work with showings, etc…, but they are very much in control of how quickly the property rents.
The second settlement is where the Tenant moves out at the end of a calendar month. They agree to pay the next month’s rent, as well as leave the property in the condition outlined under the lease move-out terms. In addition to paying the rent, the Tenants also agree to forfeit their security deposit if the Landlord is unable to lease the property within 30 days. The benefit for the Tenant is that they are not responsible for showings, marketing or when or how much the Landlord is able to lease the property. The Tenants may lose their security deposit but they can forget about any future obligations with the property.
Of course, there are Tenants who try to “leave” their security deposit behind as they move out without notifying anyone. Often the properties are not left in good condition and the Tenant usually takes the attitude of “come try to find me and sue me.” But in reality, they will end up owing a lot more and if they ever have ever have a desire to lease a decent property, get a government job, by a car with a good interest rate, or buy their own home, they may regret that “middle of the night” move-out. Landlords are usually able to add marketing fees, penalties, unsubstantiated move-out repairs and charges, and without having to wait much more than a month get a judgment rendered on the Tenant’s credit. Then they just sit back and wait, sometimes having to re-file the judgment once or twice every 3-5 years. 50% of those Tenants with Judgments end of paying the entire judgment off within 5 years…people grow up and find they can’t run from their record.