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WHAT STEPS A LESSOR MUST TAKE WHEN TENANTS PREMATURELY TERMINATE A LEASE

Posted by David Katz | Jan 12, 2019 | 0 Comments

A. DEPENDING ON THE CIRCUMSTANCES, A LESSOR MUST TAKE SEVERAL STEPS UNDER ITS LEASE IN ORDER TO EFFECTIVELY RESERVE ITS RIGHTS WHEN A TENANT DECIDES TO LEAVE EARLY.

Very recently, I was approached by a small lessor who has rental units in Watertown and Cambridge, Massachusetts. My client had received a notice of termination from two tenants who decided at mid-lease that they were going to buy a single family home in a wealthy suburb of Boston. My client was distraught at this change of events as it took him over 7 months to find suitable tenants and now those tenants had decided to abandon the rental unit in the middle of the lease term.  Of course, he wanted to know what his rights were in this situation. As in any case of this kind, an analysis of your rights as a lessor must start with an analysis of the particular terms of your lease and, at the same time, having a good understanding of applicable Massachusetts landlord/tenant law. In this case, my client had a Greater Boston Real Estate Board lease which clearly spelled out the rights and liabilities of both of the parties. Although there was no legal way to stop the tenants in this case from leaving, my goal was to get my client in the best position possible to later bring suit to recover all of his damages, including reasonable attorney's fees. 

1. The obligation to pay rent through the end of the lease term. In a two page letter to the tenants, I covered a number of areas but I began by reaffirming the terms of the tenancy by reminding the tenants that they were obligated to pay a certain amount of fixed rent up through and including the end of the lease term. As well, I instructed the tenants that my client would utilize all "reasonable efforts" to mitigate his damages and that my client would hold them liable for all damages and any extra costs associated with their premature departure.

2Security Deposit. In this case, the tenants gave my client the express permission to utilize their security deposit toward the last month's rent. Of course, my client took the security deposit and applied the same accordingly. Notwithstanding this permission, my client still tendered the required interest on the security deposit for the 6 months that it was held in their bank. The maintenance of the security deposit was in all regards compliant with the requirements of Massachusetts law. Even in this case, where the tenants abandoned prematurely and provided permission to use the security deposit toward the last month's rent, a lessor is still required to pay interest for that period of time on the security deposit. Put another way, abandoning the rental unit did not take my client off the hook for his responsibility to tender interest on the security deposit. By doing so, he avoided any potential claim for multiple damages and reasonable attorney's fees by the tenants for failure to comply with the terms of the security deposit statute. The Massachusetts Security Deposit statute is like quicksand. One wrong move and you are sunk.

3Non-waiver of any of the terms of the lease. Despite tendering the interest on the security deposit and accepting the security deposit toward a last month's rent, I made it very clear to the tenants that my client was reserving all of its rights to further damages and that none of my client's actions could be interpreted as a waiver of any of his rights under the lease. And, moreover, we were quick to spell out that the taking of the security deposit did not convert the abandonment by the tenants into a surrender (which is a situation where a tenant leaves with the permission of the lessor). Moreover, under a certain provision of the lease, my client did not waive any rights because he accepted the return of the keys. As a lessor, it is imperative that your conduct in handling a departing tenant must be consistent and clear at all times.

4Delivery of Keys.  A notice was provided to the tenants to return their keys on or by the last day of the month or that costs would be duly imposed upon them.

5. Damage to the unit. It turned out that there was damage to the rental unit. In our letter, we addressed this issue and reserved our rights to seek damages against the tenants if there was damage to the unit above and beyond normal wear and tear. A damage report was then furnished to the tenants by or within 30 days of their vacating the Premises. 

6. All provisions of the lease remain in force and effect. Notwithstanding the early termination by the tenants, we instructed the tenants, in no uncertain terms, that all of the provisions of the lease were in full force and effect until the last day of the tenants' tenancy. 

As a lessor, never let a tenant who decides to leave early get the upper hand. You must make sure, as my client did in this case, that you immediately take all of the necessary steps to protect and preserve your rights to seek future legal action. At the Katz Law Group, we know how to assist lessors in these very situations. We have been successful in doing so for over 35 years. Please feel free to call us at 508-480-8202.

About the Author

David Katz

Attorney David S.Katz is the founder and managing partner of the Katz Law Group, P.C., located in Marlborough, Massachusetts...

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