Q: We rented a home to a couple who signed a year lease. They now want to walk away from the lease because they bought a house. We were very clear with them that the lease was for one year; they even wrote us a letter stating they knew it was for a year. We used a Minnesota standard lease form, which they both signed and dated. In the lease, it states they can give 60-day notice to terminate the lease. Our renters are now claiming all they have to do to terminate the lease early is give us 60-day notice.
As landlords, we don’t know what to do next. No other renter has done this to us in the 12 years we’ve been renting the home. When factoring in rent, utilities, gas, water and electric, they are leaving us with about $6,000 of unpaid rent and utilities. The renters have cleaned out the home and moved out their belongings. They want me to sign off on cleaning, thinking that it will get them out of any obligation to us. Can they just walk away from this lease with a 60-day notice, or are they bound by the lease?
A: A 60-day-notice clause does not typically mean that at any time during your tenants’ one-year lease they can give you a 60-day notice to end the lease. A 60-day-notice clause usually applies to the situation in which the tenant holds over at the end of the lease, and then requires that the tenant give a 60-day notice before moving out. Many tenants choose to stay living in their rental unit once their one-year lease ends, so their lease then converts to a month-to-month lease. However, without seeing your lease it is difficult to determine if your renters are bound by the terms of the lease. Some leases offer tenants a buyout clause stating if tenants pay a fee and give the landlord a 60-day notice, they are able to terminate their lease early. Other leases offer tenants the opportunity to pay two months’ rent and terminate their lease early if they are purchasing a home; however, the lease needs to contain such a provision. There is no Minnesota law that allows tenants to terminate their lease early if buying a home, so this type of provision needs to be in the written lease or it is not binding. It doesn’t sound like your lease contains a buyout provision or any other provision for early termination of the lease.
Under Minnesota law, the owner or landlord needs to send a letter within 21 days of the date that the tenant has vacated the unit, outlining the reason or reasons why all or part of their security deposit is being retained. The law states that the owner or landlord is allowed to withhold an amount from the security deposit that is reasonably necessary to cover rent owed or other funds owed by the tenants, or to restore the rental property to its condition at the start of the tenancy, excluding ordinary wear and tear. You should send your tenants a letter within 21 days, stating you are keeping all or part of their security deposit in order to make up for the $6,000 they still owe you for the remainder of their lease. If your tenants’ security deposit doesn’t cover the $6,000 they owe you, then you will need to file a claim in conciliation court to collect the remaining amount.
When landlords divorce
Q: We signed a two-year lease with our landlords and are renting a home they own in Richfield. Our landlords recently told us they are getting a divorce and may have to sell the home we are renting. We still have one more year on our lease and are in no position to move. We have three children, a baby on the way, and my husband is in his second year of nursing school. We have always paid our rent on time, if not early, and have taken care of basic maintenance. The homeowners have always been great landlords, but this situation is distressing, and we feel powerless. Are the homeowners legally allowed to break our lease if they have to sell the property before our lease is up?
A: Under Minnesota law, once the owner sells his house, the buyer takes on all the rights and obligations of the property. Generally, the new buyer is purchasing your landlords’ home subject to your lease, so your lease doesn’t end, and the new owner is required by law to honor your lease terms. There is an exception if there is a clause in your lease stating that the sale of the property terminates your lease. Review your lease to make sure there isn’t a clause that terminates your lease once the property is sold. If there isn’t such a clause, the buyer of the property becomes your new landlord. The buyer of the property cannot raise your rent on your existing lease. According to the law, your current landlord must transfer your security deposit to the new owner or return it to you with interest, minus any deductions allowed.
Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to firstname.lastname@example.org, or write to Kelly Klein c/o Star Tribune, 425 Portland Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.