Tenant has Ended a Tenancy Agreement Before Expiation Date

[jarrettvaughan]

I would like to ask a simple question for properties in BC and Alberta.

If a tenant breaks the lease agreement before the expiration date, what authority or options do I have? Lets assume that they gave proper notice but there are still 4 months left in the contract. I also have no interest in going court.

Can I keep their damage deposit?

What are the laws in BC and Alberta regarding this issues?

What have other investors done in this situation?

 

[Mitch Collins]

Great question, Jarret.

What my wife and I are now doing as a result of having dealt with the exact same issue is now adding a clause into the lease agreement that if a tenant needs to terminate their lease before it has run it`s course, they are subject to a 1/2 month`s penalty.

They are fully aware of this from the beginning, and know it is coming - so doing this typically helps keep people who tell you they want to rent for a year and give notice to move out in 3 months away.

This is legal as well - we called the RTO (In British Columbia) and spoke with a couple representatives on this issue and they all agreed that it is binding on the tenant to pay the penalty for move out.

However, for now your best bet is to just start advertising and get someone else in that suite when they move out. In BC, a tenant can actually leave a termed lease at any time, and if the landlord doesn`t provide `reasonable` actions to re-rent the suite to mitigate rental loss, then the RTO decision would likely side with the tenant if the landlord is seeking compensation for lost rent, etc.

I`ve never actually been to court for that, and don`t ever plan on it. When a tenant give me an early notice, I just roll with the punch and take care of business to find another tenant!

Hope that helps


Mitch

 

[Thomas Beyer]

QUOTE (jarrettvaughan @ Sep 28 2008, 05:42 AM) I would like to ask a simple question for properties in BC and Alberta.

If a tenant breaks the lease agreement before the expiration date, what authority or options do I have? Lets assume that they gave proper notice but there are still 4 months left in the contract. I also have no interest in going court.

Can I keep their damage deposit?

What are the laws in BC and Alberta regarding this issues?

What have other investors done in this situation?
yes you can for sure keep their damage deposit if they break the lease .. and have right to sue for the remainder if you can`t fill the suite .. if you are able to collect or willing to do that is another story, of course !

So, keep the damage deposit, hope they actually pay the last month` rent, and start advertising to new tenants, hopefully for higher rent !

 

[jarrettvaughan]

Thank you very much, you have answered my questions. I appreciate it.

 

[TerryF]

I think it might matter if the deposit is called a Damage Deposit in which case the deposit can only be used for damages. If it called a Security Deposit then it can be used for damage or rent or whatever. Not sure about this though and may depend on what province your property is in....... best call the LTB to get an official opinion.

 

[Thomas Beyer]

QUOTE (TerryF @ Sep 28 2008, 01:49 PM) I think it might matter if the deposit is called a Damage Deposit in which case the deposit can only be used for damages. If it called a Security Deposit then it can be used for damage or rent or whatever. Not sure about this though and may depend on what province your property is in....... best call the LTB to get an official opinion.
same thing ..

 

[Mitch Collins]

BC regulations are pretty strict and annoying to deal with.

PLUS..it seems that there are no 100% cut and dried rules. If there is an issue that ever goes to arbitration, it ends up being the arbitrator`s decision as to what is `fair` to do in that situation.

Pretty hard to deal with that sometimes as a landlord..go for the 1/2 month`s rent penalty clause, this was the only way I have been able to find that would actually be binding in arbitration (according to the RTO).

We`ve learned that a year lease doesn`t really mean anything. If the tenants move out, you CAN apply for arbitration to collect for lost rent, damages, but you`ll lose if you aren`t shown to have immediately taken action to mitigate the loss..what`s the point of a termed lease then?

Good luck!

Mitch

 

[Anonymous]

In BC, I add an addendum to the Residental Tenancy Agreement that states a number of additional rules including...

Breaking lease term – If the Tenant terminates the tenancy before the end of the lease term, the Landlord would not return to the Tenant any portion of the damage/security deposit. This serves as a penalty to cover the costs of re-renting the premises.

Or you could change this to say... Breaking lease term – If the Tenant terminates the tenancy before the end of the lease term, the Tenant must pay one additional month`s rent at $_____. In addition, the Landlord would not return to the Tenant any portion of the damage deposit. This serves as a penalty to cover the costs of re-renting the premises. This is more of a scare tactic because I`m not sure how I would actually collect the additional month`s rent.