Life happens: your employer relocates you, you find a house of your dreams and you need to act fast in order to buy it in this competitive real estate market, people get divorced, things happen. Some of these changes may be exciting, but you are in a lease and not sure what your responsibilities may be under the lease and how to minimize your financial losses.
Let’s start with the basics. A lease is a contract obligating you to pay for the full term of it regardless of the fact that you are making monthly payments. If you decide to terminate the lease early, you still owe the landlord through the end of the contract.
However, in most states (Colorado included) landlords cannot simply sit back and wait for the lease to run out while they collect money from you or sue you for rent on the remainder of the lease. Landlords in the state of Colorado are obligated to mitigate damages. In other words, they must use reasonable effort to re-rent the home in order to release you from the obligation.
But what exactly does it mean? Landlord needs to start advertising and showing the place, they do not have a responsibility to throw heroic efforts at it, but reasonable. They can start advertising at the current market rent, which you can easily determine by looking at some comparable rentals or calling a Denver property management company. They do not have to take a very reduced amount or approve any tenant that comes through the door. They have a right to be choosy as they were with you. But they can’t just sit back and watch your lease run out.
Luckily, in Denver’s competitive rental market, it should not be very difficult to find a replacement tenant. Here are the steps to take to minimize your losses:
- Read your lease, specifically the portion about early termination. You may still be responsible to pay for advertising, showings, leasing commission, re-keying, etc even if the replacement tenant is found quickly.
- Give the landlord as much notice as possible. If you tell them that you have to move and they can start advertising 45-60 days before you need to move, chances are, the home will get re-rented and you won’t be responsible for future rent.
- Be cooperative with the showings and keep the house in good showable condition. It is in your best interest to find a new tenant.
- Try to understand and be cooperative with the landlord, after all it is you who is backing out of the obligation.
- Make sure the ads are on line, keep a record of it and all communication with your landlord.
If you do all of the above and you feel like the landlord is not doing a fair job looking for a new tenant, you might not owe the rent. If the home is not being advertised or shown, if the landlord is advertising it at a considerably higher amount than the market can support, or prohibiting pets when you had one, you might want to have a conversation. Some landlords, who are managing the rental themselves, may not be aware of their responsibility to mitigate, so a nice email or letter might get the process going.
We do not practice law at Evolve Real Estate and Property Management, but we deal with these situations often enough to offer you some insight. If you need, non-legal advice on your tenant rights, we are always willing to answer your questions. Just give us a call; we know Denver property management like the back of our hands.