Lease Contracts When Resident Finds A Replacement Tenant

Can you all tell me how you all would handle this situation?

A resident's lease extends until June but wants to get out of it now. Obviously, they are under contract and can't just break the lease. But what if they find a replacement resident? (This would not be a sublet, but rather a new lease with a new tenant) Do you ever work with a situation like that?

They would have to be qualified and either ADDED to the lease or start a new one. No sublets here.

We allow a Change of Roommate when the incoming tenant is qualified per our policy. The apartment is taken in 'as is' condition and the security deposit remains with the apartment and is refunded to the incoming tenant upon move out.

So Bill - that means you would allow the person to move out and create a new lease for the incoming resident? (This would effectively cancel the first lease...)

And Laura - Do you ever create a new lease in this situation, or is it always just continuing the original lease?

They assume responsibility for the existing lease and they are offered an option to renew just like the vacating tenant would have been.

Thanks Laura. I'd like to ask a follow up question and get more opinions, if possible!

If the original resident is moving out anyway in June, then there will be a vacancy time associated with that turn. If, however, the resident wants to move out immediately, and they find a replacement resident, they could essentially pay up to the day the new person moves in, which means practically zero days on the turn. Granted, the community would have to still turn the unit, but they would have had to do that anyway in June. So can anybody tell me how this would a negative financial decision?

(Note: Ok, I'll admit that this is my situation. I've been a quite happy renter all my adult life, but I'm trying something different in buying... I kind of feel like a traitor!)

We have allowed this. The new tenant has to be approved and they take over the existing lease. We also expect the new tenant to take the place as is.

We have done this several times and it has worked well for all parties.

@Charles - Thanks for the response. If someone came to you and asked for it to be a new lease, would you be against that? It seems that if you can cut out all vacancy cost from the inevitable turn, it would be worth it. The community is already going to have to turn the unit after I leave, so this option would be more valuable, even if they had to do a make-ready on the apt.

You would have the Resident sign a room mate addition form to add the person to the lease, then run a credit on the new resident to make sure they would qualify. If they do then both parties will sign a room mate release form to delete the original resident off the lease. This will release the original Resident of all rights and will give the deposit and any damages to the new resident. It can still be on the original lease as long as you have all forms signed.

The reason behind our current policy is so that we do not have to turn the unit mid lease which is an extra cost to absorb. If the vacating tenant chooses to break their lease, they are required to pay a buy out fee to help cover the cost of the unexpected turn. If the incoming tenant is qualified and agrees to take the unit as is then we do not have the unexpected turn costs.

I do not think I have ever had a situation where they incoming tenant has requested a new lease. The vacating tenants have always found someone interested in pursuing this arrangement per our policy.

What I have done is process the potential roommate to make sure that this person qualifies and is added as a roommate. I make sure each (potential) household member meets the income requirements ON THEIR OWN. This limits the chances that neither person relies on the income of the other to meet their rent obligation. That said; let's say that the new person IS qualified to move in and is added to the lease. This is not a problem to add the new person. Let's further say that the original person needs to leave for whatever reason; but the new person wants to stay. This is not a problem to remove the original person from the lease, assuming that all parties agree. I have a document that the departing resident must sign that releases him from any interest and responsibility for the unit. If the departing resident paid a deposit; it is left between the two parties to settle that amongst themselves (say there was a $300 deposit, the resident remaining pays that to the departing resident; and is entitled to any amount you owe the resident at the time of the turn).

Allowing this; reduces the number of, and costs incurred by, your turns.

Does anyone have a "Change of Roommate" form that they are willing to share with me? I have this situation fairly often, and it would be helpful.

What if the exiting roommate does not sign off on the change. She has been unresponsive and uncooperative in my situation.

Great question Brent,

We qualify the replacement resident per standard criteria. Once approved, we add the resident to the lease (writing a new lease that starts the day the new resident moves in and ending the date of the original lease).

Once everything is signed, we then process a Roommate Release, with appropriate forms, that absolves the original resident of their financial responsibility. The deposits stay on the account until move-out.

Having multiple residents going into the process can be difficult, as Anonymous posted. Unfortunately, we do not have a solution in place for that. I hesitate to say it, but it may involve civil court between the two residents if one won't sign a release.