Q I recently renewed my lease for an additional year, and I noticed a lease termination clause that states that if I break the lease prematurely I have to pay $1,000. I am concerned about this because a job transfer or another move out of necessity never seems to coincide with the expiration of the lease. Whatever happened to the ability to just give a 30-day notice? The lease seems to be totally in favor of the landlord. Isn't the $1,000 fee just another way for greedy landlords to gouge tenants in addition to raising my rent every year? What are the advantages and disadvantages of a lease? Isn't the $1,000 lease termination fee a rip-off?
A Property manager Griswold replies:
There are benefits and drawbacks to using a lease that many tenants and some landlords do not fully appreciate.
In most rental markets, landlords offer tenants a choice of a lease or a month-to-month rental agreement. A lease is usually offered to tenants at a lower rent than a month-to-month rental agreement because tenants are committing to a longer tenancy. The longer a tenant stays, the lower the cost of operating the rental property to the landlord. The excessive turnover of tenants is expensive for landlords not only in dollars and cents, but also in physical wear and tear on the property, plus the diminished reputation of the rental property in the community.
Tenants like having a lease because the landlord cannot change the terms or increase the rent during the lease term. This has been beneficial for tenants who have seen rents escalate significantly in the last few years. It also has given some protection to tenants who have seen landlords eliminate the acceptance of pets in an attempt to upgrade their tenant profile, as they take advantage of the strong market in some areas of the country. Also, tenants with leases have been protected from a variety of other potentially unpleasant changes in terms that could occur if their rental property changed ownership.
The downside of a lease is that the tenant is committing to stay for a minimum period of time even if it is inconvenient. A job transfer, relationship or roommate problems, an opportunity to purchase a home, or even just a better rental opportunity are not legal reasons to unilaterally break a lease. Of course, in most states, a tenant can break the lease but is responsible for the balance of the lease term or until the landlord is able to re-rent the property.
In your case, the landlord offers a liquidated damages clause that effectively gives you a lease with the benefits of a month-to-month rental agreement. You can give a 30-day notice for any reason or no reason and cancel the balance of the lease at your sole discretion. The only requirement is that you need to pay the lease termination fee of $1,000. The landlord is then taking on the additional costs and associated risk of remarketing and re-renting the rental unit. You can leave without taking the risk that you would still owe rent for the entire duration of the remaining lease term. Of course, your landlord must also account for and use your security deposit in accord with the law.
While I am a strong proponent of leases for tenants who are interested in locking in the current terms of their tenancy, I am surprised at the significant number of tenants who do not realize that a lease has certain limitations. Naturally, tenants would like to have the tenant-landlord relationship totally in their best interest -- no long-term commitment but also a fixed rental rate. Overall, my experience is that leases offer many more advantages to most tenants than they do to landlords.
Thus, I suggest that tenants primarily concerned only with potential rent increases can seek the best of all worlds by attempting to negotiate with their landlord for a month-to-month rental agreement and a written rental rate guaranty. The written rental rate guaranty is simply a letter or agreement that the rent will remain fixed for a certain minimum period of time, such as 12 months. Many landlords will agree to this proposal because they most likely do not have any intention of raising the rent more often than annually anyway.
I have been renting a condominium for two years. When I moved in, one of the elements of the lease required that I agree to pay for repainting the entire condominium, as well as for the cleaning of carpets and window blinds, which have fabric on one side. I will be vacating the property within six months because of a job transfer, and I am thinking that the owner should share some of the cost with me for these reasons: When I moved in, the paint was already peeling off the walls in several rooms; the owner admits the last time she painted the condo was 10 years before I moved in.
I have hung pictures in every room and I think it's fair the owner hire a painter to fill the holes, paint the walls, and charge me for that. But I don't think I should pay for re-painting the ceilings. And I don't think I should pay anything to have the window blinds cleaned, because I don't smoke. The blinds are 12 years old and have yellowed, but that is because of their age and not my two-year tenancy. What do you think is fair or legal for the owner to charge me and what should she pay for herself?
Landlords' attorney Smith replies:
The tenant-landlord laws in most states indicate that a tenant's security deposit may be used for damages above ordinary wear and tear and reasonable cleaning expenses. You concede that the property manager will have the right to charge you for spackling and painting on those walls containing your nail holes. The paint on the ceiling is a more troublesome issue. It may be unsightly but it does not typically violate habitability laws. As an aesthetic or cosmetic item, you'll be required to live with that condition.
As to painting and cleaning deductions, I think a proration would be in order. The deductions should be attributable and prorated to your two-year tenancy as relates to the age of the blinds and original paint. Although you didn't smoke, it is reasonable to assume that at least some of the yellowing had to have occurred within your two-year time in possession. Again, prorating would be the rule.
This column on issues confronting tenants and landlords is written by property manager Robert Griswold and San Diego lawyers Steven R. Kellman, director of the Tenant's Legal Center, and Ted Smith, principal in a firm representing landlords. E-mail questions to Griswold at rgriswold.inman@retodayradio.
com. Questions should be brief and cannot be answered individually.
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