By Jessica Bornman
Couples break up. Marriages end in divorce. It is unfortunate for both the tenants and the landlord, but the tenants signed a legal contract, and both tenants are individually liable. How should landlords proceed, to minimize the potential for lost rent, damaged rental properties or lawsuits?
First and foremost, reiterate the legal obligation to both tenants. The vacating tenant should be held responsible for rent owed and any property damage prior to moving out, regardless of when the lease term was scheduled to end.
A landlord should never conspire with one member of the couple and take any action such as changing locks, removing anyone from the lease agreement without both parties’ legal authorization or becoming involved in domestic disputes (the police can handle these). Landlords and property managers must proceed with caution to avoid legal entanglement.
If one tenant wishes to remain in the leased premises, the landlord is well advised to evaluate the credit-worthiness of the remaining tenant prior to deciding whether or not to renew the lease agreement with them alone. If the remaining tenant’s income is insufficient, landlords are well advised to require a cosigner or consider discontinuing the lease agreement and finding a new tenant.
Real estate investing and property management are businesses, and running a tight business means being particularly vigilant when emotions threaten to interfere with decision-making or revenue. When tenant couples break up, the risks of rent default or intentional property damage grow much higher. Most landlords will need to decide between signing a release of liability (with one or both tenants) and being prepared to pursue one or both tenants in rent court, should they default or damage the property. If both tenants vacate before the lease term has ended, landlords may have legal grounds for pursuing them in court for lost rent (refer to local/state laws regarding early termination).
The security deposit may also become a point of contention, both between the tenants and between the landlord and tenants, so it should be addressed in any written release and signed by all parties (and perhaps notarized). If the landlord does return all or part of the security deposit, they are advised to return the funds to whomever originally wrote the security deposit check, and leave the division of assets to the tenants’ attorneys. When in doubt, landlords and property managers should always contact their attorney and stay informed of state laws.