Clients often contact us angry when they have received a call, email or text from their tenants indicating that the tenants intend to move out of the rental property at the end of the month, even though the lease doesn’t expire for 5 more months. Tenants may claim that they lost their job, got married, got divorced or endured host of other reasons preventing them from fulfilling the lease obligations. Unless there is a legally recognized basis, the tenant is liable for the remainder of the lease, subject to a landlord’s duty to re-rent the premises. However, that doesn’t answer the immediate question we always get – what should the landlord do once the tenant notifies them that he is leaving?
The first thing I always ask is whether the tenant’s rent is current. Many tenants, when breaching their lease, attempt to use their deposit as their last months rent. Unless permitted in the lease, this is not appropriate. Also, since it’s not technically the last month of the lease, the deposit shouldn’t be applied anyways. Therefore, if the tenant has not paid the rent, the landlord should immediately give a non-payment of rent notice if the rent is late.
Clients often argue that it’s not worth their time to serve the notice and file the eviction since the tenant is leaving at the end of the month. Such arguments miss two important points. First, an eviction is a quick, inexpensive means of getting a judgment against the tenant which can then be collected on. While you don’t get future rent owed, you do get a judgment for rent for that month. Second, even though he told you he was moving, it’s possible that the tenant will not vacate or deliver the keys to you. If the end of the month comes, and the landlord hasn’t filed an eviction, the tenant could fail to vacate. This would cost the landlord an additional month’s rent. As we always advise clients, a landlord should always serve a five day notice as soon as the tenant is late in rent to protect her interest.
On the other hand, if the tenant is current in the rent, there is nothing that a landlord can do to protect against the potential breach by the tenant. However, that doesn’t mean that the landlord has nothing to do. Upon being notified that the tenant will be vacating, the landlord should begin to market the unit. The landlord should go through the same process that they would regularly to re-rent the premises.
Once the tenant has vacated, then the landlord must fulfill their legal obligations in regards to the security deposit under A.R.S. § 33-1321. The landlord has 14 business days to account for the deposit and show what amounts remain owing by the tenant. In this case, the tenant would be liable for damage to the unit and for rent through the remainder of the lease. However, the landlord has a duty to “mitigate” her damages and make best efforts to re-rent the unit. A landlord has to show that she attempted to rent the property using her normal procedures. If, despite the attempt to rent the property, the property remains vacant, the tenant is liable through the remainder of the lease. If the landlord is able to re-rent the premises, the tenant is only liable for the time the property was vacant. In such cases where the property is re-rented before the original lease expires, the landlord must send a revised security deposit accounting, reflecting the lower amount owed by the tenant. It is based upon this revised accounting that the landlord can sue the tenant for breach of the lease.