RELEASING A RESIDENT FROM THE LEASE
There will inevitably come a time when the resident wishes to be released from the lease, or you desire that the resident vacates the premises, and all the parties are in agreement. This is an ideal situation in property management, as there is no need or desire for litigation, and everyone goes their separate ways. The resident may be the one who wants to be released for a myriad of reasons, such as a job transfer, sickness, and inability to afford the rent, house purchase, problem with the neighbors or anything else. While these may not be legal reasons to break a lease, in certain situations it behooves the manager to agree and release the resident. In other cases, the manager wants the resident to vacate. Possibly there are problems with the resident, behavior issues, the apartment community will be going under a complete rehab project, or maybe the manager of a single family home needs the resident to vacate due to a foreclosure or a sale of the home. Whatever the reason, a release of the resident can and should be accomplished through the use of a written agreement. Never is anything done verbally. Whenever a resident is being released, the manager needs to make sure that the manager is being released as well, and that every single base is covered.
Surprises are only fun if they are surprise parties, and even then, maybe not! In property management surprises usually end up with one or more angry parties and the potential for litigation. Added to that, the law states that any ambiguity in a document can be construed against the manager, so already the manager has one strike against them. The residents could think that they are going to receive the security deposit back upon vacating, as this is what the owner said, but after they vacate, the manager finds major damage and keeps the deposit. Now we have a problem. The manager may have told the residents that they will receive a particular sum if they vacate and then pays the residents. The residents get the money and do not vacate. These are the typical scenarios that occur when everything is not put in writing in the proper document.
The Release agreement needs to clearly state if the resident has indeed vacated or the date the resident will vacate. If the date that the resident will vacate changes after the Release is signed, this needs to be done in writing with an addendum to the Release signed by all parties. Verbal extensions are what get the manager in trouble every time.
If the resident has any of the manager’s personal property such as gate cards, clickers, keys etc, this should all be returned when possession of the premises is granted on the vacating date. When the manager realizes that keys have not been returned or a $50 clicker or garage door opener has not been returned and then charges the resident, sparks fly, and the resident then claims that these items were indeed returned, and a dispute results. Neglecting to make sure everything has been returned immediately causes problems.
Damages to the Premises
Unless otherwise agreed to, the manager never wants to give up his right to charge the residents for damages that the resident caused which exceed ordinary wear and tear. If the release does not address this, the manager could end up having to return the entire deposit, even after he discovers that the resident has caused severe damage to the unit. Damages are never fully assessed until the resident has vacated with all personal items having been removed; the manager should not give up his right to these types of charges. Although we do not recommend walkthroughs with the resident at the move out, we don’t want the manager retaining his right to make a claim on the deposit a deal killer for the manager, so good judgment under the particular circumstances needs to be exercised. A resident may not want to sign a release if there is any doubt on the return of the security deposit.
Does the Manager Have to Send the Notice of Intention to Impose Claim on Security Deposit?
While the Release may state that the resident receives the full security deposit back minus any damages at move out, or agrees to forfeit the deposit if this is part of the deal, the question remains whether the manager must follow FS 83.49, which provides that the manager must send out a Notice of Intention to Impose Claim on Security Deposit. We recommend that the manager comply with FS 83.49 and send the Notice of Intention to Impose Claim out, if the any of the security deposit is being kept by the manager. We are not sure if the Release can override the law or if the resident can waive FS 83.49, and there is no reason for you become the test case in court.
Attorney’s Fees and Costs
The Release should have a statement that all parties are bearing their own attorney’s fees and costs. It is possibly that an attorney was in the picture at some time, and if the manager or resident ended up getting an unexpected bill and then tried to recoup this from the other party, someone is going to be angry.
The Release Language
In the body of a typical release lies the legalese where each party agrees to release the other, their agents, employees, manages, owners, assigns etc, etc from all manner of suits or claims in the past, present and future. This is important wording. The goal in the Release is to end it all and have no chance of future litigation or disputes. If the terms and conditions of the Release are followed, it is OVER. That is the PURPOSE of a Release.
Who Signs the Release and Who is Released?
ALL residents should sign of course, and the manager or the manager’s agent. Your goal is to accomplish a release of ALL parties involved in the transaction, and this includes a third party manager, the owners, employees and anyone else involved. You do not want a situation in which the resident releases the manager, and the resident then decides to sue the third party manager or an employee who was somehow involved.
Who Keeps the Original Release?
Just like the manager keeps the original lease and all the originals in the file, the manager should keep the original Release and give the resident a copy. We are not in favor of duplicate originals being executed, as one or both parties could alter the document, and you will end up in court.
Transfer of Money
In many Release agreements there is some transfer of money. The manager may be paying the resident extra just to leave, or is returning a last month’s rent or security deposit immediately. The resident may be paying the manager a particular sum as part of the deal. The timing of the money transfer must be clearly spelled out and the form of payment listed, whether it is cash, money order, check or certified check. The resident should never receive a dime unless he is completely out of the premises and has granted you clear possession, which should be confirmed by an inspection.
Questions still? Good. You should never go it alone, even when the deal appears simple. We have seen deals go bad very fast, and it is always advisable to have your attorney take a look at the agreement. Your attorney is trained to see what isn’t in the document.
- The Curable Noncompliance Examined PART 1
- THE CURABLE NONCOMPLIANCE EXAMINED PART 2
- THE WRIT OF POSSESSION – WHAT IT IS
- THE WRIT OF POSSESSION AND THE FULL UNIT
- WORK ORDER COMPANY POLICY AND THE LAW