If my new tenants broke their lease, what rights do I have to keep deposits, charging a termination fee or charging rent untilhouse is re-rented?

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If my new tenants broke their lease, what rights do I have to keep deposits, charging a termination fee or charging rent untilhouse is re-rented?

We rented our home on with a 1 year lease. We had lease papers signed and received deposits including first, last, security, and pet deposits. On the move-in day for the tenants called to say they had a falling out and wanted out of the lease before they had even moved in. We have been posting on on-line and have even dropped the rental price and security deposit but haven’t found renters yet. It has been 30 days. What money can we legally keep (I thought we could keep 1st months rent and that we could keep a termination fee of up to 1 1/2 times the rent).

Asked on September 28, 2011 under Real Estate Law, Oregon

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you have written lease for the unit that your tenants are not going to fulfill their obligations on, you need to carefully read it in that its terms control the obligations owed to you by the tenants and vice versa in the absence of conflicting state law.

If they never moved it, you have no right to keep their security deposit. This needs to be immediately returned as well the the pet deposit. Be careful about the termination fee to keep. Potentially if you keep that fee, you might not be able to sue the tenants for the period of time that the unit remains vacant while you are seeking to find a new tenant for this one (1) year period. If you do find a replacement tenant who pays less than what your current tenants agreed to pay, your damages would be the difference of this amount for the balance of the one (1) year you mention.

Good luck.


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