Rental contract question

In My Humble Opinion (IMHO)
#1

Standard “you are not my lawyer, don’t trust legal advice from the internet” rules apply.

I own a rental property, and signed a month to month agreement with a tenant. Contract starts on feb 1, ends March 1, but can go month to month if we agree. No money has changed hands yet. We agreed to payment of security deposit this Friday and rent on the day of moving in. It’s written into the contract that way.

Complication, I’ve also had the property on the market to sell and just got a reasonable offer for it. I mentioned this to the tenant up front. I’d like to sell it and was surprised at the rapid movement of selling.

I think I’m obligated to honor the contract for February, and have the tenant move out March 1. Ideally it seems best for both me and the tenant to just scrap the contract and go on our merry ways. But if the tenant wants to continue the contract, I’m obligated to let them in…yes? It’s in my best interest to not have the person move in, and I’d like them to recognize it is best they find another place that is more permanent.

Is there a reasonable way out of this agreement? Does the fact no money has changed hands make a difference?
I think I’m obligated to this one month rent and am willing to do it because of the agreement, but wanted to know if there was an alternative.
This is wisconsin if it matters.

#2

I’m not a lawyer, and of course the answer depends on the actual wording of the contract.

That disclaimer aside, normally if you have signed a contract which lets the tenant have the house for February, then yes, you have to let him live in the house for February if he wants to.

It sounds like you have a month to month lease commencing Feb 1. If you want the tenant out as soon as possible and he doesn’t want to go, a normal such contract would require you to give him notice prior to (or by, depending on the wording) Feb 1 that you are terminating the lease on March 1.

Edited to add:

You say, “but can go month to month if we agree.” Is that really the case, because normally a month to month lease would be, “will go month to month unless one party gives notice of termination.”

#3

You say you told tenant you are trying to sell the property. But you didn’t say if you have told the tenant that you already have a prospective buyer and that the tenant, having moved in on Feb. 1, must leave by Mar. 1.

In Wisconsin, do you have an obligation to give tenant 30 days notice before terminating a month-to-month? If so, you have to tell him by Feb. 1. Essentially as soon as he moves in, you have to give notice that he has just one month. That might be legal, but would be profoundly dirty of you if you were to do that. Much better if you tell him immediately.

For all you know, he may choose to cancel the agreement immediately rather than move in for just one month (even though he may be miffed). I’m sure I would. This may be true even after he pays you the security deposit. He will surely be vastly more miffed if you wait until he moves in on Feb. 1 to tell him.

Since you (apparently, as best I could guess according to CA law) could perfectly legally give him 30-day notice on Feb. 1 (or Jan. 31?) (or a day or two earlier, given that Feb. has only 28 days), you could not be legally faulted if you tell him now.

None of which answers the direct question you asked: Can you renege on the agreement altogether now? I have no idea of that. It could be that if you do that, he would have a case to demand some compensation from you (maybe?) Perhaps you could be a bit proactive and offer him some settlement before he even asks. Or wait to see if he demands something.

At worst, he might demand to move in as agreed and move out in one month. But I’d be surprised if that happens. I think your best option, even if your contract is already carved in stone, is to tell him now that you want to cancel it, and hope that he agrees (however grudgingly) with that.

You can tell that IANAL (and never regretted it). I’m sure that the above suggestion bears no earthly resemblance to anything any lawyer would ever suggest.

#4

I don’t think money changing hands has anything to do with it. I think all that’s important is whether or not the contract is signed, and it sounds like it is.

I would suggest that you let him know what’s going on and tell him that if he can find something before Feb 1, you’ll break the contract since you’ll be kicking him out at the end of the month anyways.

You might also suggest, since it’ll benefit both of you, that you’ll prorate his Feb rent if he doesn’t stay the entire month. The sooner he’s out, the sooner you can get the place ready and if he doesn’t feel the pressure to stay there right to the very end it might be easier for him to get into a new place and not worry about overlapping rent.

Is he currently renting in a place that he has to leave at the end of January?

Also, Senegoid mentioned some kind of compensation for him, and I’d agree that’s in order. I’d be pretty effin annoyed if someone did that to me. At the very least, give him back any/all fees he’s paid to you that aren’t related to rent (application/background checks etc) since he’s going to have to pay that all over again in a few days to start the process over. Also, if this is a house/duplex, and you know any other landlords that are looking for tenants, you might try to set him up with them (assuming he seems like a good tenant).

#5

First, the contract states…such tenancy shall be terminable upon thirty days written notice by served by either party.
I’ve just sent the email stating that they will have to move out by march 1st per the contract.

Before they looked at the propery I told them I was looking to sell it and that was the reason behind the month to month contract. It is also why I insisted the contract be for one month ending on march 1.

Yes, I would be at least annoyed and even pissed if I were the tenant and I make no claim to being the proverbial good guy in this case. However, I think I made it pretty clear that the property would possibly sell and they would have to move out.

I didn’t have a prospective buyer until a couple of days after the rental agreement was signed. If I knew I was going to get an offer on the property, I would not have signed for renting it.

I’ve suggested they find an alternative place, but am willing to uphold my agreement for 1 month, if they insist.

#6

If no money has changed hands, there has been no consideration.

A contract requires 4 things: Offer, Acceptance, Consideration, Legal intent.

No consideration, no contract and no problem.

But I think you went ahead and took his money.

Cheers, Singanas 1-23-14

#7

There is absolutely no obligation in contract law that consideration be in the form of money. And the idea that a contract cannot be enforced unless money has changed hands would cripple commerce.

What if the rental contract were slightly different? The tenant promises to pay rent at the end of the month instead of the beginning. Then when the end of the month comes around can the tenant say “Too bad. I’m not paying you any money. There was no consideration, so we didn’t have a valid contract”?

What if you agree with your credit card company that you will pay the bill 30 days after they mail it. The 30 days rolls around and you don’t pay. Do you get away with it because no money had previously changed hands and therefore your contract was unenforceable?

The tenant assuming the obligation to make a rent payment and the landlord assuming the obligation to provide an apartment is a perfectly valid exchange of consideration.

#8

Send a certified/registered/whatever (signature required) letter stating the same thing, to cover your rear in case e-mail doesn’t count.

#9

I believe OP is spot on, that if tenant wants February tenancy then he has no choice but to allow that, but does not have to agree to any lease beyond March 1.

You could always offer the guy a couple hundred bucks to walk away.

#10

What’s the proposed closing date on the sale? Does the buyer want the property as a residence, or as a rental property? If the latter, maybe they want to acquire the lease as part of the transaction, in which case the matter would be between the tenant and the new landlord. Just a thought.

#11

You could also say “Look, you’re legally obligated to pay me for February whether you move in or not, but since there’s no chance you’ll be able to stay past February 28th I’ll be a nice guy and let you out of your lease entirely.”

I don’t see how Sigene is in a disadvantaged position or has any reason to pay the guy off. The lease is vexing for both of them, if the tenant would rather not waste a month’s rent or a lot of effort moving.

#12

This disadvantage is that the OP has property that he hopes to have in good condition on March 1, or as least as good condition as it was on February 1, and an angry tenant who is out the door anyhow can do a fair amount of damage in 30 days. Even if this is a sane and not particularly vengeful person, they can still do stuff like, say, not notice when their furniture scratches up the floors on the way in, and again on the way out. Yes I see there’s a damage deposit but the owner still has to deal with the repairs, and for me (as a 1-unit landlord) it would be worth a few hundred to just not have to risk the hassle of fixing something. Especially in this case, I got lucky with a quick sale and my tenant, who hasn’t done anything wrong so far, is SOL because of it.

#13

In addition, the law frowns on self-help when it comes to residential evictions. When March 1 comes around, you can’t just change the locks, force the tenant out at gun point, and dump their stuff into the street. If a ticked off tenant doesn’t want to cooperate, they can drag out the eviction process. Some places you can get a prompt court hearing, some places the courts are backlogged and if the tenant chooses to contest the eviction proceeding, it can take time. And the sheriffs’ offices in some places might also have a backlog of evictions as well as policies about evicting in cold weather, etc.

#14

I am a lawyer and we have very clear laws about this exact situation in Australia (how much notice you must give a tenant before they are required to vacate the property). I will not bore you with the legislation (because it is irrelevant to the US) but perhaps you should look into whether you have similar laws.

#15

(IAAL&IANYL) You can’t really make a general statement because housing laws vary widely. If you let me know what state you’re in I can point you to your Lawyer Referral Service; they typically offer 1/2 hour of time at a low flat rate ($25-$40) and that should be more than enough for your needs.

ETA: or if you don’t want to share that info, google [state] or [city, state] Lawyer Referral Service. Only use a LRS affiliated with a Bar Association.