If my tenant found other housing before even moving in, do I have to return the rent paid?

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If my tenant found other housing before even moving in, do I have to return the rent paid?

Year lease signed 3 weeks ago; no security deposit received ($550); rent of $550 per month, received $350 ($50 MO/$300 voucher from Salvation Army). Then 2 weeks ago, tenant called to say they found other housing and want their rent returned. Do I have to return it? Placed ads again to find another tenant.

Asked on September 26, 2011 under Real Estate Law, Wisconsin

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you have a fully executed rental agreement with your tenant for one (1) year term for a rental and the tenant now wishes to not move into the unit because he or she found another place to live in, you need to carefully read your written agreement in that its terms and conditions control the obligations owed to you and vice versa concerning the rental in the absence of conflicting state law.

If your tenant refuses to honor his contractual obligation for the one (1) year lease, you are under no obligation to return the rent paid to date but are obligated to return any placed security deposit as soon as possible (next five [4] days).

You have an obligation to mitigate your claimed damages during the next year by seeking a replacement tenant. If the new tenant's monthly rental is more or equal to the amount that was to be paid by the one tenant who never moved in, you have no damages. If the amount is less per month, your damages monthly for the next year would be the difference from what the first tenant agreed to pay and what the replacement tenant agreed to pay.

Good question.


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