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A person has signed a 12-month lease for an apartment through July. In June, they...
A person has signed a 12-month lease for an apartment through July. In June, they decide to move out early, vacate the apartment, and fail to make the final lease payment. The property owner accuses them of breach of contract. Is that a valid accusation?
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It certainly is a valid accusation. The property owner, however, would have to leave the apartment vacant through the month of July in order to have any hope of collecting that month's rent. Then he would have the problem of locating the tenants, and he would have a bigger problem in making them pay if they refused to do so. The tenants should have been well aware that they owed the landlord for July, and if they didn't pay it voluntarily that should be a good indication that they have no intention of paying it.
In order to collect, the owner might very well have to sue them. This involves hiring a lawyer, and a lawyer could cost more than the amount of the month's rent. Also, there are long delays in getting such suits on the legal calendar. The landlord might decide he would be better off trying to find a new tenant who would move in on the first of July. In some places this would be easy because of a rental shortage. In other places it might be difficult. It would depend on the location.
Nowadays, landlords are protecting themselves from just such problems as you outline in your question. Typically, a lease on an apartment or a house will require the first and last month's payment in advance plus a security deposit. If your property owner had insisted on such a lease agreement, he would already be in possession of the last month's rent and he might even withhold the security deposit.
It is easy enough to accuse the tenants of a breach of contract, but the problem is collecting the money. Going to a lawyer to try to collect a small sum of money, let us say $1,000, is impractical. The lawyer typically writes a threatening letter to the defaulting tenants. If they ignore the letter and the landlord wants to pursue the matter, then the lawyer must file suit. He might have to wait years for the case to come to trial. If he won, as he probably would by default, then all he would get would be a judgment, and he would still have the problem of collecting. The lawyer would not help him collect. He could go to a collection agency, which would charge a percentage of the judgment if they collected. But in the meanwhile, the former tenants might have moved to a different city.
The landlord can file a judgment lien against them with the county, but if they are only renters and not property owners, the lien is ineffectual. What the property owner would get out of his experience would be the lesson that he should protect himself against future defaults by using a lease form which specifies that the tenants must pay the first and last month's rent in advance plus a security deposit for cleaning and damage.
He should also run a thorough credit check on prospective tenants, because there are, unfortunately, a certain percentage of tenants who move in and then stop paying the rent. Then he has to serve an eviction notice, probably requiring the services of a lawyer, and may ultimately have to have the sheriff evict the tenants. If there are bad feelings, they may leave the apartment in deplorable condition.
An alternative to hiring a lawyer would be to take the matter to small claims court. In that case the landlord would be acting as his own lawyer. He would have to serve the tenants with a summons, if he could find them. He might have to spend a whole day sitting in small claims court waiting for his case to be heard. If he won, as he would because the tenants wouldn't show up, he would only get a judgment and then have to collect on the judgment.
Posted by billdelaney on April 29, 2013 at 9:59 AM (Answer #1)
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