Can I deduct a reasonable amount for my timeand effort for advertising, if my tenants broke their lease?

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Can I deduct a reasonable amount for my timeand effort for advertising, if my tenants broke their lease?

My tenant broke lease at worst time to buy a house at holidays and in slow season. They initially threatened to stop paying rent in January, but they did pay. They’ve since accused us of not trying to the rent the house, but we’ve been aggressively trying and can substantiate that. We are even giving them a 10-day rent abatement for the days we’ve used to get the house move-in ready. We’ve devoted a lot of time, energy and gas to showings and advertising (putting flyers and signs up around town). My lease says I can deduct financial losses for breach of contract from security deposit.

Asked on January 21, 2011 under Real Estate Law, Colorado

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Listen, they breached a contract.  You are sitting in the best seat here in this scenario.  A lease is a binding contract and if they indeed signed it then they are bound by the terms.  You are entitled to the damages written in to the lease that they agreed to (as long as they do not violate the law in your State and and are not against Public Policy) as well as any remedy provided under the law.  Now, the advertising I would be careful about but I would absolutely not abate their rent again.  And I would hold them to the balance of the lease.  You have a suit.  Good luck.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unfortunately, this is not the sort of financial loss you can deduct. In the first place and most importantly, your own time and energy is NEVER something you can recover for. In the second place, even the out-of-pocket costs (e.g. gas) you can't recover, since it's both in your own interest and your duty (the duty to mitigate) to try to find new renters.

What you *can* do is sue your now-former tenants under the lease, for the rent they owe for the balance of the term (from the time they breached the lease to the lease's expiration)--or at least for any period of time up to when you get new renters in. A lease is a contract, after all, and the tenants are obligated to pay the rent due under it. You just have to be able to show that you've been making efforts to mitigate your loss, which you apparently are.


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