Finding great tenants for your rental properties can be challenging. Even when you’ve done your best to vet them, things don’t work out. Sometimes, tenants want to break their lease early and not adhere to the relevant terms in the contract. When this happens, it is called wrongful quitting. Read on to learn what to do when you have a tenant who wants to leave their rental property early and do not pay rent or a fee for breaking the lease.
The Situation
Recently, we received a call from someone needing help regarding a tenant who asked to leave with 5-day notice two months into their one-year lease. The tenant had full expectations of not paying rent and terminating the lease. The tenant is obligated to pay the remaining term of the lease but they didn’t plan to. If the tenant is absent for 20 or more days without written notice to landlord, they are considered to have wrongfully quit.
When the tenant vacates wrongfully, the landlord is entitled to the daily rent for the term it takes to re-rent the property, plus a reasonable commission, plus the difference between the prior rent agreed to in the rental agreement and the new fair market rent for the incoming tenant.
The Options
One course of action is taking the tenant to small claims court. A reason not to do this is that there is a $5000 cap. This is likely not useful if your rental amount is higher than that or will be more than that over the course of the months that the tenant is not paying.
Another option is civil court, but most of the money will go to the attorney. Even if you were awarded money by the judge, you still might not get money from the tenant.
What You Should Do
Hopefully, you have the security deposit. As the landlord, you have discretion for how to use it and can choose to put it towards the rent that the tenants will not be paying. Note, tenants cannot use the security deposit for rent. Do not return the security deposit to the tenant. You need to put the rental on the market right away to find a new tenant to fill the vacancy.
For help with your Hawaii rental property or to learn more about our concierge property management services, call our office to schedule a private consultation at (808) 593-9826 or email concierge@caronb.com
