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The Lease Was Signed, And The Tenant Ran Off?

I spoke with a friend who had a lease renewal signed with his tenant. It is a property out of state and he just received some interesting news today. Due to financial reasons, the tenant claimed she was unable to continue with the renewal lease she had just signed up a week ago. The tenant has given notice to break out of the lease by the next month and this is the lease that was just signed last month. If she had known she has financial problems, then why did she even bother signing the lease renewal? This does not seem to make sense at all and it sounds quite suspicious.

The renewal lease was for a 3 year term on a salon space in a commercial building. All the signatures were on the final draft of the lease renewal. Here is the interesting piece to it. The property manager who is managing the unit indicates that he heard "through the grape vines" that the tenant was looking at another place down the street. However, she probably found it one week too late since she had just signed the lease renewal for 3 more years. It all seemed more to be a case of the tenant wanting to excuse herself from the lease to go elsewhere.

The tenant sent an email to the property manager indicating that she wanted out of the lease. The name of the tenant on the lease is an LLC and not her personal name since she is operating under the business name.
How many options does the owner of the building have? Can they pursue this and get a judgment and go after the tenant personally to recoup the loss damages since she plans on vacating the unit by the end of the next month? What would you do if you were in this situation or do you know of someone who has gone through this?

For situations where the tenant has terminated the lease in this fashion, for most valid leases, the tenants are liable for the expenses accrued by the owner during the time period that the building remains vacant. In the meantime, do some investigation and find out the real reason why the tenant has suddenly decided to terminate the lease. Let the tenant know that they can break the lease, but they are responsible for the rent until new tenants are found and start paying rent. Furthermore, since it appears evident that the tenant is set on moving out no matter what the consequences, then immediately begin marketing the property again.

It is at times like this where having a security deposit collected comes in handy since you can deduct the expenses incurred by the owner from the security deposit. If it gets to the point, then proceed with filing a small claims case or a lawsuit against the tenant to recover the costs of the lost rents. When entering into any contracts, all parties are aware there are strict rules to adhere to and when either party does not live up to their side of the agreement, then there are consequences.

Article Source: http://www.noviceinvesting.com/Article

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