What Do I Do When the Renter Backs Out?

Published by julia | Filed under Buyer / Seller Tips, Listings, Real Estate

If the mortgage is just too high and a homeowner does not want the home to fall into foreclosure, the rental option may seem like the next best thing. What happens; however, when the new renters refuse to pay the rent or leave the home without notice or means to pay the remaining months on the rental contract or lease?

The Lease – The Key to Salvation

The first line of defense is the lease. When the home owner and the renter signed the lease, a legally binding contract was entered. The renter is liable for the duration of the time on the lease in most cases, but not in all cases. Some leases will have a clause which allows the renter or the home owner to back out of the lease with 30 days notice. If the renter stops paying, or leaves the home without notice, the home owner may be owed some of the total lease amount, but maybe not all. The end result will have to be fought out in a court of law which could cost more than the lease balance.

If the lease is iron clad and the renter backed out without proper notice, leaving the home vacant and the homeowner without the payments promised, the court action could prove more valuable financially to the home owner. The renter can be sued for the remaining months on the lease and damages, attorney’s fees and more.

Steps to Regaining Control Over the Lease

Some landlords, or home owners, choose to negotiate with the renters if there is a just reason for the vacation of the property. If the renters are having financial problems or are unable to pay a month’s rent or two, the landlord may choose to reduce the rent for a small period of time or give the renter a chance to work off the difference by making upgrades to the home. These are rare situations, but the landlord may want to look into these options before seeking financial retribution in a court of law. If the court finds in the favor of the renter, the landlord will be out all monies, including the court costs and may risk losing the home if the renter was covering the mortgage payment.

Not every situation is the same and a landlord that jumps to conclusions can often be the landlord left without a tenant. If a renter breaks the lease, first try to contact the renter for the reasons behind the vacation. If the renter cannot be contacted, legal action may be the only option.