6 Month Lease Term Early Termination By Tenant

RJPurvis · Jan 23, 2009

Hey Diane,

I trust you are doing well. I have a situation I need some input on regarding one of my tenants:

Facts:

1) Client/tenant and I renewed a one year lease for October 1, 2008 to September 30, 2009
2) At the clients/tenants request we gave him the option to terminate the lease after six months with 30 days notice because he anticipated he may be transferred in the year - we did the one year because he wanted to protect his lease rate - he was a good tenant so I wanted him to stay
3) He gave me notice on January 1, 2009 because he is being transferred earlier than he thought – he paid January rent of course, but two months remain in the lease, Feb and March, 2009
4) I told him he is committed to pay the rent to the end of the six months (ie. end of March 2009) by virtue of our agreement.
5) I have been working hard to rent the suite once I knew he was leaving and in fact should have a signed lease with a new tenant likely tomorrow

My question is:

If I am able to rent the suite during the remaining two months of his term, is he obligated to still pay for the two months that were left in the contract we had? Or do I basically give the checks back to him once I have those months covered by the new tenant?

GarthChapman · Jan 23, 2009

QUOTE (RJPurvis @ Jan 23 2009, 04:51 PM) Hey Diane,

I trust you are doing well. I have a situation I need some input on regarding one of my tenants:

My question is:

If I am able to rent the suite during the remaining two months of his term, is he obligated to still pay for the two months that were left in the contract we had? Or do I basically give the checks back to him once I have those months covered by the new tenant?

I`m not Diane, but will try to give you an answer. Making the assumption your property is in Alberta, you would not be entitled to double-dip by collecting from both your current tenant and the new one. Once the place is rented then the old tenant is off the hook.

Our leases always stipulate a `break fee` for terminating a lease early - usually $500. This covers our costs and aggravation.

RJPurvis · Jan 24, 2009

QUOTE (GarthChapman @ Jan 23 2009, 06:02 PM) I`m not Diane, but will try to give you an answer. Making the assumption your property is in Alberta, you would not be entitled to double-dip by collecting from both your current tenant and the new one. Once the place is rented then the old tenant is off the hook.

Our leases always stipulate a `break fee` for terminating a lease early - usually $500. This covers our costs and aggravation.

Oooopss on the Diane thing I was in a hurry...lol!

Okay Garth that`s what I thought and I will be adding that clause in my new contract!

ZuzanaHaska · Jan 27, 2009

QUOTE (RJPurvis @ Jan 24 2009, 09:25 AM) Oooopss on the Diane thing I was in a hurry...lol!

Okay Garth that`s what I thought and I will be adding that clause in my new contract!

Hi friends,
you may add any clause to the contract, but it will not stand in the Tenant resolution court.
In our leases we clearly specify that if tenant breaks the lease re-rental fee is one month rent. Recent ruling was in favor of the tenant as they deemed re-rental fees as punitive and therefore not enforcible.

Zuzana Haska
Linden Property Management LTD

DaveRhydderch · Jan 27, 2009

QUOTE (ZuzanaHaska @ Jan 27 2009, 10:45 AM) Hi friends,
you may add any clause to the contract, but it will not stand in the Tenant resolution court.
In our leases we clearly specify that if tenant breaks the lease re-rental fee is one month rent. Recent ruling was in favor of the tenant as they deemed re-rental fees as punitive and therefore not enforcible.

Zuzana Haska
Linden Property Management LTD

Thanks Zuzana. Where abouts was this?

And as a rule, I would allow my tenant to walk. I don`t want someone there who doesn`t want to be there. They won`t take care of the place, and in the long run will cost you more $.

GarthChapman · Jan 27, 2009

QUOTE (ZuzanaHaska @ Jan 27 2009, 10:45 AM) Hi friends,
you may add any clause to the contract, but it will not stand in the Tenant resolution court.
In our leases we clearly specify that if tenant breaks the lease re-rental fee is one month rent. Recent ruling was in favor of the tenant as they deemed re-rental fees as punitive and therefore not enforcible.

Zuzana Haska
Linden Property Management LTD

Agreed, one month`s rent is too high, hence our $500 figure. Whether the fee is enforced is up to the discretion of the Judge or Dispute Resolution officer ruling in the case. Build a strong case, present it well and you should be successful - note that Provincial Court Judges are essentially Family Court Judges and tend to favour the tenant, so we always go to Court of Queens Bench where the Judges are more consistent and balanced. I am hearing good things also about the Dispute Resolution process in Alberta, now also available in Calgary and a couple of other centres beyond Edmonton where it began.

rforgiel · Jan 27, 2009

The way my Ontario lawyer phrases it is the tenant is responsible for lost rent & utilities but the landlord must mitigate their damages by finding a tenant as soon as possible. The tenant is also responsible for the costs of finding the tenant. Therefore you can legally claim advertising, running credit checks and you might even sneak in travel. Unfortunately the law does not value your time.

ZuzanaHaska · Jan 27, 2009

QUOTE (GarthChapman @ Jan 27 2009, 11:56 AM) Agreed, one month`s rent is too high, hence our $500 figure. Whether the fee is enforced is up to the discretion of the Judge or Dispute Resolution officer ruling in the case. Build a strong case, present it well and you should be successful - note that Provincial Court Judges are essentially Family Court Judges and tend to favour the tenant, so we always go to Court of Queens Bench where the Judges are more consistent and balanced. I am hearing good things also about the Dispute Resolution process in Alberta, now also available in Calgary and a couple of other centres beyond Edmonton where it began.

Hello again,

the recent case was Dispute Resolution court in Calgary.
I had all paperwork in order, but the officer did not allow the re-rental fee - despite clearly written and acknowledged by tenants- they signed 1 year lease and left just after 3 months. He did not allowed any advertising cost that I had to run in order to re rent the unit.I was told that it is the cost of running the business. They also disallowed the invoice that I presented for patching the nail holes and paint touch ups. This was clearly noticed in my Outgoing Inspection and signed by the tenants. The officer ruled that nails are regular wear and tear. In his opinion we cannot expect tenants to live without pictures on the walls. It was very frustrating, given a choice I would go to Court of Queens Bench. I felt that judge was favoring tenant even if all my evidence was supported by the Residential Tenancies Act.

Zuzana Haska

LizHaywardRealEstate · Jan 29, 2009

I don`t really understand the purpose of a 1 year, 6 month or any length of term for that matter if the contract cannot be enforced? I have just recently been through a civil claims situation with tenants. They agreed to pay the 2.5 months in arrears of a 1 yr contract that they vacated. I however could not collect on an "extra pet" that the tenants brought in. I had a clause that fined an amount to one months rent in the event of a pet. I had pictures of all the dog pee and poop stains. The judge threw it out because (I believe he called it a clause of terror) which violates the Residential Tenancy Agreement. You cannot have fines in your contract. Funny, the only real "terror" that I saw was the result of pathetic tenants and the mess of the dog. Our legislation has no teeth! Try and prove the tenants smoked in the house. Just try and collect on any painting, carpets etc for their damage. The judge awarded in my favor 1/3 of the cost of carpets and painting. Now, it`s collection time...

klewlis · Jan 29, 2009

QUOTE (LizHaywardRealEstate @ Jan 29 2009, 08:53 PM) I don`t really understand the purpose of a 1 year, 6 month or any length of term for that matter if the contract cannot be enforced? I have just recently been through a civil claims situation with tenants. They agreed to pay the 2.5 months in arrears of a 1 yr contract that they vacated. I however could not collect on an "extra pet" that the tenants brought in. I had a clause that fined an amount to one months rent in the event of a pet. I had pictures of all the dog pee and poop stains. The judge threw it out because (I believe he called it a clause of terror) which violates the Residential Tenancy Agreement. You cannot have fines in your contract. Funny, the only real "terror" that I saw was the result of pathetic tenants and the mess of the dog. Our legislation has no teeth! Try and prove the tenants smoked in the house. Just try and collect on any painting, carpets etc for their damage. The judge awarded in my favor 1/3 of the cost of carpets and painting. Now, it`s collection time...

Not only can you not fine for a pet, but you also cannot charge extra rent for a pet or a pet deposit (amazing since so many places DO try to charge a pet deposit--if it puts your total pet+security deposit at more than one month`s rent, it`s illegal). Keep your lease legal and you`ll have more luck enforcing damages. Why *should* the judge rule in your favour if you are putting illegal clauses in your leases?