Q A tenant signed a one-year lease agreement seven weeks prior to the move-in date. In the beginning of the moving month, the tenant arrived to pick up the key and started looking for different reasons to not move into the unit.
He requested his money back -- one month rent plus damage deposit -- and informed us that he will not be moving in. We had a vacancy for one month and are trying to advertise the property.
What can we deduct from the money we received from tenant? How about charges for showing and advertisement? What is the amount that is allowed for these expenses? Can I deduct mileage, gas and my personal time that I spend during this month looking for a new tenant?
How much time do we have to send this money back to the tenant?
A You are allowed to deduct the amount you are out of pocket as a result of the early termination. Therefore, you are permitted to recoup the lost rent, as well as the cost of advertising and showing the unit.
There is no amount designated as "correct" under Minnesota Law for these amounts, but the amounts actually incurred are always considered the appropriate sum.
Whether you can deduct your personal time and travel expenses is up in the air. The main question is whether these are expenses that a tenant would naturally expect to be incurred. Unless the tenant had some special knowledge that you might incur such costs, I think it is unlikely that a court would consider them reasonable.
You should return any and all amounts, along with a written itemized statement as to any amounts withheld, within 21 days from the termination of the tenancy.
