When it comes to renting a property, there are various fees and charges involved. One such charge is the re-letting charge. In this article, we will explore what a re-letting charge is and how it can impact tenants and landlords in the rental market.
What is a Re-letting Charge?
A re-letting charge is a fee that landlords may charge tenants if they wish to terminate their lease agreement early. When a tenant ends a lease prematurely, it creates vacancy costs for the landlord such as lost rent until a new tenant can be found. The re-letting charge helps landlords recoup these costs associated with securing a new tenant.
What triggers a re-letting charge?
A re-letting charge is typically triggered when a tenant informs their landlord that they wish to terminate their lease before the agreed upon end date. For example, if a lease is for 12 months but the tenant wants to move out after living there for 6 months.
In this situation, the tenant's early termination of the lease agreement would subject them to paying a re-letting fee according to the terms outlined in the lease. The charge provides compensation to the landlord for taking on the tasks required to fill the vacant rental promptly.
Related: Can Landlord Charge Tax On Rent?
What costs does the re-letting charge cover?
Landlords incur various expenses when re-letting a property to a new tenant after previous occupants leave early. A re-letting fee usually aims to offset these costs such as advertising the availability of the rental, conducting open houses or showings for prospective tenants, completing background checks on applicants, and administrative tasks involved with setting up a new lease agreement.
The charges compensated landlords for the money and time it takes to find a replacement renter.
How much is a typical re-letting charge?
The amount of a re-letting charge can vary significantly in different lease agreements and areas. However, commonly a fee will equate to a percentage of the monthly rent, likely ranging from 25-50% per month for the remainder of the term.
As an example, for a $1,000 monthly rent with six months left on the lease, the fee could be 25% of $6,000 = $1,500.
Alternatively, some leases stipulate a flat fee equal to one month's rent. Landlords establish these costs upfront while drafting rental contracts.
Do re-letting fees differ by state?
Yes, the legality and limits of re-letting fees can depend on state rental laws and regulations. States like Texas are considered more landlord-friendly regarding these charges while California tends toward tenant protections. Under New York law, fees must correlate reasonably to actual costs incurred by landlords re-renting units.
Understanding one's own state statutes is important for both tenants and property owners when early lease termination is being considered.
How can tenants avoid paying a re-letting fee?
Tenants have a few potential options to try avoiding re-letting charges if they need to end their lease prematurely. They can negotiate directly with their landlord, often citing reasons like personal hardship. Subletting the property, if permitted in the lease and state, passes responsibility to a new subtenant.
Another strategy involves reviewing lease terms for specific early termination clauses excusing penalties. However, landlords are not obligated to waive or reduce fees.
What recourse do tenants have for high re-letting fees?
If tenants believe a re-letting charge is unjustifiably high even while complying with the lease terms, they can attempt politely negotiating lower costs with their landlord. However, there is no guarantee the landlord will agree.
Tenants can also ensure the fee aligns with their state's rental laws. If there are doubts, tenants should consult a local housing attorney for guidance to understand their rights. Challenging illegal or unreasonable fees in court is an option of last resort.
How can landlords waive re-letting charges?
Some scenarios where landlords may be willing to waive re-letting charges include sympathetic situations like a tenant facing significant health issues. A history of on-time rent payments and responsible tenancy may also prompt some flexibility.
Market conditions with high demand could give landlords confidence in quickly re-renting without losses. However, landlords are not obligated to forgo the pre-established fees outlined in signed leases. Waivers ultimately rely on their discretion.
Conclusion
In summary, a re-letting charge covers landlord expenses associated with finding a new tenant to replace one breaking a lease agreement early. These fees are intended to offset costs like advertising and open houses. Amounts vary across locations and contracts but commonly equate to a percentage of monthly rent. Tenants can try negotiating waivers but ultimately must consider state regulations and signed lease terms regarding triggering conditions and amounts.
