Prospective Tenant Signed Lease & Wanted to Cancel Before Move In

[tnguyen]

My friend just had a prospective tenant signed the 1 yr lease for July 1st 2017 and now tenant wants to cancel it, because my friend's rental unit is a pet free unit. A prospective tenant said that his relative has the medical issue and can't take care of his dog. This dog is from his passed father and doesn't want to give to any strangers. A prospective tenant is asking for the deposit back. As many of us and I have not seen this situation happens so often, so if anyone has experience or opinions, please help

 

[Martin1968]

Have had that on a few occasions. I usually give a full refund, but to be fair, on all occasions I had 3 to 4 weeks to find a new renter in good rental markets.
In your friends case, it's June 8th so he has about 3 weeks left.
He could charge a little for time and advertising. Not uncommon. You can discuss with tenant.
If a tenant would cancel just a week to 10 days before tenancy starts, I would keep it to offset possible lost rent. (Never had that situation)

 

[Thomas Beyer]

Assuming you have a deposit of one month rent then I'd charge that AT LEAST, unless you can easily re-rent without advertising.

They are now in breach of an agreement, and if you breach it there are consequences. You can also demand multiple months of rent payment until place is rented in a slow market.

Tough to collect though but worthy a mention to tenant.

You own an asset worth hundreds of thousands of $s. Do not let other screw you around because it is convenient for them. What is convenient for you ?

btw: what province is this as it matters.

 

[tnguyen]

Assuming you have a deposit of one month rent then I'd charge that AT LEAST, unless you can easily re-rent without advertising.

They are now in breach of an agreement, and if you breach it there are consequences. You can also demand multiple months of rent payment until place is rented in a slow market. Tough to collect though but worthy a mention to tenant. You own an asset worth hundreds of thousands of $s. Do not let other screw you around because it is convenient for them. What is convenient for you ?

btw: what province is this as it matters.

I strongly agreed with Thomas. If they've done it before, then they think every landlords are the same. They only deposited for 1/2 of total 1 month rent. It is in Abbotsford, BC area. My friend called RTB, who said that the deposit is turned into Security deposit when prospective tenant signed the agreement. Now, my friend has 15 days to return it. If he wants to keep the deposit then he has to file the dispute resolution form. Is that right?

 

[Martin1968]

Its not so much wether you agree with anyone, it's more about how difficult you want it to become and how much time you have to spend on this. You were asking for advice and opinions. They can differ as you may appreciate. But both replies agreed that it would very much depend on how the market is and how fast you would be able to re-rent.

If your friend is able to rent it on July 1, again collects the security deposit from a new tenant (half month rent in BC) and starts collecting rent, he is not at a loss.

and that's how it will be looked at if either your friend, or your tenants that cancelled would take any action regarding this issue.
ONLY if your friend can't rent it July 1 and can prove this with all necessary paperwork/proof you might/will be entitled to keeping the security deposit. As far as collecting any other rents, well there is small claims court, and again you will have to have it all documented with necessary proof in order to demand anything, and in case you would be entitled to more, you would still need to collect it from that tenant. (When granted, you would still be responsible for trying to collect)

I understand your friend is upset, But as much as you don't want to be "screwed" (and don't get me wrong, no landlord would like that) my question would be, Is this worth your time and frustration?
That's what he has to figure out for himself.

 

[darkness05]

I am not sure if this applies to this situation - but what if their friend had paid a PM to get the unit rented? And now has to pay again to get it re-rented?

Would that financial loss not be the responsibility of the tenant?

 

[adriano]

In my agreements , if the tenant changes there mind then they lose the money. I also have a liquidated damages clause where they agree to pay for breaking the lease. In instances like this I have kept the money as I have lost possible tenants because I took it off the market. Now if you can re rent it then you would be obligated to return the deposit. Hopefully you have your paperwork in order and you should be okay if they demand the money. But without seeing the paperwork maybe a crap shoot.

 

[Martin1968]

@darkness05

Any cost you would have had, wether it's a PM or cost you occurred yourself you are entitled to deduct.
About breaking leases, there is very little you can do about tenants walking out of their contracts.
You get to keep the security deposit and hope for minimal losses.
As stated in another post you could make work of it when it's a slow market and have trouble re-renting. If you are prepared to do the extra work. Might be worth it in that case. Other then that best thing is to move on.

 

[Tina Myrvang]

I strongly agreed with Thomas. If they've done it before, then they think every landlords are the same. They only deposited for 1/2 of total 1 month rent. It is in Abbotsford, BC area. My friend called RTB, who said that the deposit is turned into Security deposit when prospective tenant signed the agreement. Now, my friend has 15 days to return it. If he wants to keep the deposit then he has to file the dispute resolution form. Is that right?

That is correct.
http://www2.gov.bc.ca/gov/content/h...tenancies/ending-a-tenancy/returning-deposits