RESIDENT TELLS YOU THEY ARE BREAKING LEASE

Your residents have just informed you that they are breaking the lease agreement and moving out. A job transfer, sickness, home purchase or any other reason may be given. They may call you on the phone and then inform you in writing, sending you their new address where they expect you to send the security deposit. They may simply send you a letter telling you their intentions. Most likely you will not agree with the resident’s desires or plans, but you need to decide whether to ignore the letter or respond.

Do You Need To Respond?

There is nothing in the law that requires you to respond to the residents. A letter from residents indicating their intention to break a lease does not have any effect upon the lease agreement or the tenancy. Legally, it is called an anticipatory breach of contract. Will the residents be breaching the contract? Yes, and you do not need to respond. However, when you do not respond, the residents feel they are entitled to break the lease, and they assume your failure to respond indicates acceptance with their intentions. We feel you should respond, but in writing and with specific wording.

The Residents’ Expectations?

What are the residents’ expectations? As we can see in many lease break letters from residents, many feel that a job transfer, sickness or home purchase somehow legally allows them to simply pack up and break the lease. During the sales boom, many real estate salespersons told residents that in the event they purchased a home, the law allowed them to break the lease without penalty. We all know that this just is not the case, but the residents think otherwise. If the residents feel they can break the lease without penalty and send the manager a letter indicating the same and the manager in no way responds to the residents, the residents may feel that everything is fine and that the manager is in complete agreement.

How to Respond

When residents have already broken or will break a lease, the manager must immediately become vigilant and communicate only in writing with the residents. Remember, the residents are attempting to get out of a serious contract, and anything can and will happen. The manager may be caught off guard, the residents may be desperate, and the parties begin a verbal communication which is subject to interpretation and misunderstanding. The act of residents breaking a lease is a legally significant and dangerous situation (from the standpoint of the agent’s potential liability), and nothing should be done unless it is in writing. Too often we see cases in which deals are made, conditions are set, and conversations ensue in which the manager and the residents each end up having a completely different understanding of the situation. This results in conflicting testimony in a later court case. Unfortunately, some people can lie more convincingly than others can tell the truth, so when the residents go to court and claim the manager said they could break the lease, no one has anything in writing other than the residents who have a letter written to the manager indicating they could break the lease. The judge is put in an unfortunate situation in which he or she must decide who to believe. You may be on the losing end that day.

Common Manager Mistakes

Upon learning of a lease break or anticipatory lease break, the manager may tell the residents that if a new resident is obtained, the departing residents will not have to pay any further rent. This immediately creates an expectation on the part of the residents that the manager will mitigate his damages and suddenly get a new resident. Under current market conditions, we all know that finding a new resident may be a lot harder than it was two years ago. The manager may make the mistake of agreeing that the departing residents will find a replacement resident. Often this happens, and the person the breaching residents find does not meet the manager’s criteria and is not accepted, causing the breaching residents to feel that the manager does not want to rent the unit out. Another mistake is to make a payment arrangement with the residents for money owed, but at that time no one really knows what is owed or how long the unit will be vacant. Lastly the manager may find a new resident, but at a lower rent amount. Does this mean the lease breaking residents are now off the hook? All the foregoing mistakes are made by managers, and often they are part and parcel of the verbal agreements with the residents.

The Proper Response

Now that you are convinced that the manager should never respond unless in writing, you need to know what to say. Simply put, the manager should tell the residents that the lease agreement stands, and that the residents’ vacating shall constitute a breach of the lease agreement. Since automatic forfeitures of security deposits, liquidated damages and accelerated rents are not expressly legal, this will not be discussed. The correspondence should be short and simple.

The Residents Have Left. Can You Take Possession?

If you do not agree with the residents’ intention to break the lease by vacating and the residents vacate, how does the manager know if he can take possession? Often residents will wait to see if the manager takes possession. They will have a neighbor watch the property and notify them if the manager is seen going into the unit. Possibly, the rent will be current, and if so, the manager cannot take possession unless the residents have granted possession. If the residents have indeed vacated and the unit is abandoned, meaning the unit has been vacant for 15 days and the rent is unpaid, the manager may take possession. If the residents have told the manager in writing that they will be vacating on a particular date and in fact do so, the manager will most likely have possession of the premises, but should be sure by inspecting the unit and running this by their attorney. By sending the residents a proper response, the manager can accomplish a number of things to help minimize a bad situation and dispel the uncertainty of whether possession is or is not granted.

Sample Response Letter to the Lease breaking Resident

Dear Resident,

We are in receipt of your letter (or phone call) in which you have indicated that you are vacating the premises on (month, day, and year). Please note that under the terms of the lease agreement that you signed your lease and rent obligations continue until the end of the lease term. We will expect you to continue paying the rent and all charges due under the terms of the lease until the earlier of the date we may be able to re-rent the unit, if we decide to do so, or the end of the lease agreement. If we are only able to rent the premises at a lower rental rate than the amount for which you are currently responsible, you will also be liable for that deficiency. Please inform us in writing when you have vacated the premises, and return all keys, garage door openers or any other property belonging to us at that time, so we can avoid filing a possible eviction action. Please note that by vacating prior to the end of your lease agreement, you are in breach of the lease agreement, and we shall exercise all our rights under the lease and Florida law.