My Tenant is Breaking a 1-Year Lease agreement….
Some Questions & Answers
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Q1
I received a notice from our HOA saying a tenant had a BBQ in the common area which needed moving. I let the tenant know by phone. He ignored calls and now we have HOA fines. Does Arizona law require me to give tenant written notice?
A1
Whether a written notice is required may primarily depend on what your lease agreement says. State law will usually require that the notice be written if the landlord proceeds with a court action based on the notice unless the tenant acknowledges receiving your messages.
Just as important is the issue of whether the tenant was aware of the rule that was broken. Although most generic agreements don’t cover the HOA issue, for any rental property covered by a HOA the tenant should be provided a copy of the HOA documentation, including Bylaws and Rules/Regulations prior to signing of the lease and the lease agreement should include a clause stating that the tenant has read the documentation, agrees to abide by the terms of the documentation, and will be liable for any penalties assessed against the landlord due to violations by the tenant.
If the tenant has not been provided such documentation, a judge may refuse to penalize a tenant for failure to abide by the terms of that documentation, particularly if there is no proof that he was told of the violation and given the period required by law to correct the problem.
Written notice should always be provided along with proof of mailing or personal service for any matter related to any default on the lease or other issue of importance to the landlord, especially any matters that the landlord may want to pursue in court. Unless personally served, the notice should be sent with a “Certificate of Mailing” which gives the landlord proof of having mailed something to the tenant without the tenant knowing of the proof and refusing delivery, as can be done for “Certified Mail.” Use of both proofs is even better.
Oral notices are difficult to prove in court if the tenant claims to have not received the notice. Oral notices are particularly problematical when a landlord leaves a message on the tenant’s voice mail, as the landlord cannot even prove that the message was sent, let alone was received by the tenant. Mailed notices for which there is proof of sending do not usually require proof of receipt because, whether true or not, the U.S. Mail is considered infallible.
Similarly, emailed notices do not have universal court acceptance. While there are ways to prove an email was sent that might be acceptable to some judges, few judges may assign the same presumption of receipt for a sent email as for a sent piece of U.S. Mail.
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Q2
My tenant is breaking a 1-year lease agreement, moving out 4 months prior to end of lease. What are my legal rights for remaining months on the lease and the security deposit?
A2
In general, absent anything unusual in the lease agreement and absent any indication given to the tenant that you are allowing him/her to leave early, you would have the right to hold the tenant to the terms of the lease agreement. This means that you can charge rent for the remaining term of the lease in addition to any damages.
However, many states require that the landlord make reasonable effort to find a replacement tenant as soon as possible, with the definition of “reasonable” depending on a number of things such as the local rental market, the time required to get the unit ready for marketing related to the condition in which the tenant left the unit, and, if the matter goes to court, the opinion of the judge. You can usually also charge the tenant for a portion of any marketing costs and/or leasing commissions paid, with the charge being adjusted for the period remaining on the tenant’s lease after you have begun collecting rent from a new tenant. If the matter went to court many judges would not allow you to collect rent from both the old and new tenants for the same period of time, although the laws of a few states allow the landlord to do so.
Be sure to provide an accounting of the amount of the security deposit not being returned (=deposit less unpaid rent + damages + other costs) within the time required by the law of your state.
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Q3
Can a landlord ask for a pet deposit in addition to 1-1/2 month’s rent security deposit in NJ?
A3
Although you should read the law yourself, my understanding of NJ law is as follows:
It appears that NJ law allows for pet deposits, but the security deposit, including the pet deposit, cannot exceed one and a half times the monthly rent. Furthermore, if the rent is increased, the most additional security deposit money that a landlord can get in any one year is 10 percent of the current total deposit no matter if the rent is raised by more than 10 percent. Landlords should also understand that the word “deposit” means that the funds are refundable if all conditions of the lease are fulfilled.
Although some are of the opinion that one can get around the maximum deposit allowed by simply calling it a “pet fee” rather than a “pet deposit” and clearly state that it is a non-fundable fee, I doubt that this is so. Many states specify that all funds received beyond the first month’s rent are included within the maximum security deposit and, although I haven’t read the statute itself regarding that issue, I would expect that the maximum security deposit in NJ likely includes most items called fees. Furthermore, it is possible that a court would so hold even if the issue is not covered by statute.
It is my understanding that the landlord can charge additional rent for pets, but it would be better to simply charge a higher rent than to have a separate pet rent so as to avoid the issue as well as allow for a higher security deposit without worrying about whether the maximum security deposit must be calculated based on the regular rent without considering a pet rent.
Be sure to remember that no pet fee or pet rent can be charged someone who is in the protected class of disabled under fair housing laws and has an assistance animal.
It is always advisable to utilize an adequate “pet agreement,” either as a stand alone document that is referenced in and made part of the lease agreement or included within the lease agreement itself.
Finally, you should also check with your city or township, as sometimes they have additional rules regarding leases and security deposits. This is particularly true for rental units that are under any type of rent control.