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Ask Barrister Your Own Question
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 35824
Experience:  16 years real estate, Realtor. Landlord 26 years
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We bought a house and need to terminate our lease 2 months

Customer Question

Hello,
We bought a house and need to terminate our lease 2 months early. We have found new tenant's to take over the lease per the landlord's request, but he is stating that we need to pay him $100 plus 1 month's rent as a "reletting fee." It is my understanding that he cannot charge rent to both parties or charge a reletting fee that is more than it cost him to procure a new tenant, which in this case is nothing since we listed, showed, and found the new tenants ourselves as he requested. Is this correct? The terms were outlined under section 28, B, 4 of the Texas Association of Realtors lease.
Submitted: 7 months ago.
Category: Real Estate Law
Expert:  Barrister replied 7 months ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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The terms were outlined under section 28, B, 4 of the Texas Association of Realtors lease.

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Were those terms actually filled in on your lease?

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Does the lease specify the amount for a reletting fee or is it blank?

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Does the lease state anywhere the $100 and 1 month's rent?

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thanks

Barrister

Customer: replied 7 months ago.
This is what the lease says:The Dallas tenant's council has informed us that this is not binding as it does not comply with Texas law.(4) At the time Landlord agrees to permit an assignee, subtenant, or replacement tenant to occupy the Property,
Tenant will pay Landlord:
(a) if Tenant procures the assignee, subtenant, or replacement tenant:
(i) $100
(ii) 100% of one’s month rent that the assignee, subtenant, or replacement tenant is to pay.
(b) if Landlord procures the assignee, subtenant, or replacement tenant:
(i) $100
(ii) 200% of one’s month rent that the assignee, subtenant, or replacement tenant is to pay.
(5) Unless expressly stated otherwise in an assignment or sublease, Tenant will not be released from Tenant's
obligations under this lease because of an assignment or sublease. An assignment of this lease or a sublease
of this lease without Landlord's written consent is voidable by Landlord.
Expert:  Barrister replied 7 months ago.

The problem with this is that if you agreed to the "reletting fee" then it isn't considered "rent" so as to violate the law preventing the landlord from being able to charge rent to two different tenants, i.e. "double dipping".

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Reletting fees are authorized in lease agreements written by Texas Apartment Association (TAA). If they were illegal, they wouldn't be in the formal TAA leases. The reletting fee must be a fair amount to cover actual expenses for getting a new tenant on the hook and cannot be unfairly inflated. TAA usually sets this fee at 85 percent of a month's rent.

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Many landlords will offer to let tenants pay them an extra month of rent and let them keep the security deposit and the landlord will let them out of the lease. If the landlord relets the premises the next day then that might not have been a great deal for the tenant. But if there was 10 months left on the lease then it might be worth it to take the deal rather than to take the risk that the landlord would not find another person to rent the place.

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So I would have to disagree with the tenant's council because it was clearly spelled out in the lease, and it was voluntarily agreed to by you as a reletting fee.. Obviously this is just my opinion based on 15 years landlord tenant law, so your results might differ if you were to sue the landlord in court.

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I am very sorry that I don’t have better news, but please understand that I do have an ethical and professional obligation to provide customers with legally correct answers based on my knowledge and experience,even when I know the answer doesn’t make the customer happy...

.

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thanks

Barrister

Customer: replied 7 months ago.
Right that is what we read as well - that reletting fees are allowed but they cannot exceed the amount actually spent to procure another tenant, which in this case is zero. If TAA sets it at 85%, then wouldn't him asking for 100% make it non-binding?
Customer: replied 7 months ago.
Also I'm not sure that TAA applies here, as this is a house and the lease is a Texas Association of Realtors lease. I don't know if they have separate limits or not.
Expert:  Barrister replied 7 months ago.

I think you might have a decent argument that this would overcompensate the landlord if this clause was upheld and it would be unconscionable for the court to enforce it. If the tenant has done all the legwork to get a new subtenant and it hasn't cost the landlord anything, except maybe minimal processing costs, then the arguement could be made that the landlord should never be paid anything in that situation..

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But the only way to see how it will turn out is to get it in front of a judge and see if he will actually listen to arguments or whether he will just look at the contract and say "You signed it voluntarily, so I am not going to get into questions of whether it is fair or not" and just uphold it.

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And I think both agencies, the TAR and TAA just give guidelines, not something legally binding..

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thanks

Barrister