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Author: apacherose Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308367  
Subject: Son leaving Apt. lease early Date: 12/1/2013 11:57 AM
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Due to spending his earned income, savings, Roth IRA & maxing out 4 credit cards with debt, my son is moving back home to Start-Over. I confess it was disheartening to learn that he had tapped into his savings & Roth IRA.

My son was one of 3 tenants who signed a year's lease that will end in April 2014. So he is leaving on unpleasant terms. His 2 co-tenants feel that he should pay 1/3 of rent/electric bill/cable combo. My son & I feel that he is only responsible for 1/3 of the basic rent...since he will not be living there to benefit from cable OR to contribute to electrical usage.

A bad scenario that I wish had never occurred, but it did. I suspect that his 2 co-tenants(girlfriend & boyfriend couple) took advantage of his friendship, since his share of the $654 rent was $420?? No calculations to explain this $420 was provided by co-tenants, nor did he request any.

Tomorrow, my son will be stopping by the rental office to obtain a copy of the lease agreement & to inquire of their suggestions/policy, etc. In the meantime, your suggestions/input regarding lease solutions & where-to-begin with his paying-off credit card debts would be gratefully appreciated.

Apache Mom
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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307514 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 1:23 PM
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Due to spending his earned income, savings, Roth IRA & maxing out 4 credit cards with debt, my son is moving back home to Start-Over. I confess it was disheartening to learn that he had tapped into his savings & Roth IRA.

Does he have money to pay the IRS penalties for taking money out of the IRA before he's 59 1/2? If not, that needs to be his first priority from a money perspective - he needs to have the money to pay the IRS before April 15.

I suspect that his 2 co-tenants(girlfriend & boyfriend couple) took advantage of his friendship, since his share of the $654 rent was $420?? No calculations to explain this $420 was provided by co-tenants, nor did he request any.

If the rent alone (excluding cable & electricity) really is $654, and he was really paying $420 PLUS 1/3 of cable and electricity, I would say that your son is very good at allowing people to take advantage of him. However, my guess is that the rent PLUS cable and electricity is probably around $840, and because the couple was using 1 of 2 bedrooms, they were paying half and he was paying the other half.

In that case, I would say he still let himself be taken advantage of, because all 3 of them were using the electricity, cable and common areas (kitchen, living room, etc.) and he should have negotiated a better deal with his co-tenants.

Since nobody can be taken advantage of unless they allow themselves to be, your son needs to understand that the choice he made to not ask for any explanations of what he was paying for was what put him in this position.

My son was one of 3 tenants who signed a year's lease that will end in April 2014. So he is leaving on unpleasant terms.
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Tomorrow, my son will be stopping by the rental office to obtain a copy of the lease agreement & to inquire of their suggestions/policy, etc.


Wait - you said your son signed the lease. Why doesn't he have a copy of it already?

I would suggest that the first thing that your son needs to do is to look up the tenant landlord laws in his state, and understand what the state says his responsibility is in this situation. Some states will just defer to the lease, while others may have laws/guidance for these types of issues. If it's just dependent on the lease, then I would strongly suggest that he JUST get a copy of the lease from the office, and NOT ask them about suggestions/policies, etc. UNTIL he reads the lease. The apartment office isn't there to get in the middle of disputes between roommates - just to manage the apartments per the signed agreement. Additionally, since your son seems to put himself into positions where he can be taken advantage of, asking for suggestions at the apartment office without actually understanding what he's responsible for PER THE LEASE may end up with him being taken advantage of again - the people managing the apartments may suggest to him that he pay more than he is legally responsible for so that they can be more assured of getting their payment in full.

When he reads the lease, he needs to determine what the LEASE says he is legally responsible for and make sure that's in agreement with what the state law says. If the lease is only for the apartment, excluding cable and electricity, then he's responsible for that part of the apartment rent unless he is allowed to find someone to take over his part of the lease, and is able to do that.

If the electricity and cable are included in the lease, then he may be responsible for those, too, depending on what the lease says.

If the electricity and cable are not included in the lease, then he needs to understand whose name the accounts are in. If the accounts are fully in his name, then he's responsible for the accounts until they are closed. In that case, he needs to get the account agreements that he signed, and see if he is required to keep the accounts until a particular date, or if he can cancel the accounts. If he can cancel, then he can tell his roommates he is cancelling, and that they need to open their own account. If he can't cancel, then he may need to pay those bills, too. If the cable account is any more than basic service, then he could decrease his cost by changing it to basic service.

If the accounts are partially in his name, then he also needs to get copies of the account agreements that he signed for those accounts, and determine what he can do about removing his name and/or cancelling service.

Once he finds out what he's legally responsible for, he needs to find out if he can sublease those responsibilities. If so, he needs to work on that right away - not depending on his roommates to do so.

AJ

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Author: cabinsmama Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307515 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 2:08 PM
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First, feel free to ignore any part of this that doesn't apply to your situation. I'm speaking as someone who's been in your position with adult kids.

Thoughts:

There is no "Start Over." There is a continuation of the same issues, problems, strengths, in a new location and with a different set of obligations. Your son won't get a clean slate by moving out. He needs to understand that whatever he does or has done is going to have consequences, good or bad.

I second the advice to not ask the rental office for suggestions on how to proceed. They will mostly likely tell him whatever is to their advantage. There's lots of reasons to request a copy of his lease. He doesn't have to give them an explanation.

Most likely this household bought cable, etc. packages based on his income being in the mix and they've structured their spending around his share always being there. This is probably going to torpedo the friendship, so he needs to be ready for that. If the accounts aren't his, he can walk away, but he should expect some anger.

This is JMHO, but having had a kid who was the tenant left behind, your son should make sure his room and part of the common areas are as clean as possible. Documenting that might be a good idea, in case the remaining tenants blame any damage, etc. on him.

He needs to make sure he leaves apartment and mailbox keys behind.



That's a lot of funds to go through when your shelter costs are $420 a month. I hope he's got a good plan to change spending, etc. and that he's being very open with you about how he got into financial trouble and how he's going to get out.

cm,
BTDT

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307516 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 2:39 PM
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He should get a copy of the lease. In some states, the leaving tenant might have to pay a fee for breaking the lease, in other states the leaving tenant might be responsible for the rent unless the management fills the spot but management must prove they were actively attempting to fill the spot, and in some states the remaining tenants would be stuck with the full rent if one roommate moves out.

I hope none of the utilities are in his name - if they are, he needs to get them put into the others names before he moves out or have them turned off.

Unless utilities are included as part of rent and not separate bills, he shouldn't pay for any utilities after he moves out because he's not using them and would be fine if they were turned off.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307518 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 3:15 PM
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AJ, cabinsmama and Metrochick have already covered the apartment lease problem, so I'll be the first to start wading into the debt problem. Others will come along who will offer more (and probably better) advice. I'll start with the most important question.

What did your son spend all that money on?

I don't know what his work situation is; if he's on hourly wage, regular salary, straight commission, or some combination of the above. I'm going to work from an assumption that his regular paycheck is enough to pay for the rent, utilities, meals, and other basic necessities. (If it isn't, and he's been paying the rent with cash advances and his Roth, that's a different problem and he needs to find a better paying job, and if the problem is that he no longer has a job and has been eking out his unemployment with savings, then that too is a different problem).

So, where did the money go? He needs to figure out the answer and resolve that problem before he can really start work on paying everything back and remaking his financial life. Eating out? Concert tickets? Vacations? Loans to pals who never paid him back? Car? Clothes? Girlfriend?

And how long has this been going on? Since he left college? While he was in college?

He needs to learn to live within a budget before he can start to pay off his bills. Otherwise he's going to continue to have problems. I hope he's willing to examine that part of his life and figure out his spending problem. It's important that he do this now. It won't be fun, and we all realize that, but he's got to figure out where the hole is before he can fix the leak.

There may be some rough moments from the board. Hang in there.

Nancy

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307519 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 4:08 PM
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Separate out the cable/internet/phone contract. It is quite likely that they jointly agreed to a contract, and there will be early termination fees. It would be reasonable for him to pay the termination fee, and they start a new contract. It also would remove his name and liability from the account.

If his name is on the electric bill, then he needs to have it removed. He agreed to paying 1/3 of the electric bill. I have mixed feeling about his responsibilities. If it is electric heat, most the expense would be the same regardless of whether there are two or three people in the apartment.

He needs to give written notice that he won't be continuing the lease or responsible if it converts to month by month rent. It doesn't remove his responsibility for lease payments through April. Since his name is on the lease, he could be held responsible for the entire amount. He needs to be very careful about making certain that the lease payments are made. Any payments he makes for the lease should be made directly to the leasing company.

This could get very very nasty. His name is on the lease, and his responsibility doesn't end with moving out. I don't see how moving home before April is going to save a great deal of money.

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307520 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 6:01 PM
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I agree with the above posts regarding rent and utility accounts--your son should get his name off those accounts immediately. I also agree with the warnings not to mention to the landlord that he is thinking of moving out. Nothing good--and plenty of bad things--can come of it. If he somehow lost his copy, he should simply mention that it was misplaced and ask for a new copy.


Chances are that your son and his roommates have a verbal agreement in how they split the rent, and that this agreement is not part of the written lease. The landlord wants the full amount on the due date and won't much care who it comes from. So it is very likely that if your son moves out, the couple who stays behind would face eviction if they fail to make the full monthly rent payment. It's not like they can write a check for a fraction of the rent and expect to stay there while the landlord goes after your son for the balance.

What's going to happen is this:

(A) either they'll make the full payment and come after your son in small claims court, or

(B) maybe they'll just figure it's not worth it and call him a bunch of four-letter words, or

(C) worst case, they'll fail to pay and get evicted, and then the landlord will come after everyone and your son would be responsible for a third of the total judgement amount plus legal fees.

Again, neither the judge nor the landlord will care about a private verbal agreement which is not a part of the lease. Your son would never be legally responsible for more than a third of the total lease amount. The smart and honorable thing would be for your son to offer to pay his roommates a third of the rent ($218) through April 2014. He ought to be able to manage that if he is still working and living at home.* He should not be responsible for any cable or utilities after leaving, especially if his name is not on the accounts.

Last, if your son is moving in with you, demand to see his the last year's worth of statements for the credit cards he ran up, plus his bank statements. They should be available online in PDF form. He should give you the online account passwords. You need to see where the money went (Bars? Fast food? Concerts? Cash advances [ie., drugs]? Online gambling?), and address the problem in a long face-to-face conversation before he moves in with you. Something is definitely up.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307522 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 6:53 PM
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Interesting situation.


Utilities:

He should pay utilities prorated to the day he moves out. Nothing more. If the remaining tenants don't want to pay for the cable TV ---let them shut it off.


What are the plans of the remaining two tenants? If they are going to continue the lease, they have a legal obligation to find another tenant to share the space with them.

I might negotiate a settlement with the co-tenants. Offer them, oh, $500 to settle all the remaining issues and disputes, including the utilities. They would then get to keep any additional rent payments they would get by renting out the space. I'd get a signed agreement to that effect signed by both co-tenants and make the $500 payment to the landlord to be sure that money is going toward rent and not into the pockets of the co-tenants.

In short --- negotiate an agreement and settlement of these issues with the co-tenants and/or landlord as needed.

Frankly, your son sounds like he is a lousy at bargaining.


Seattle Pioneer

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307523 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/1/2013 7:37 PM
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What are the plans of the remaining two tenants? If they are going to continue the lease, they have a legal obligation to find another tenant to share the space with them.


No, they don't. They have an obligation to pay the rent, along with the son. The landlord won't care if a bedroom is empty


I might negotiate a settlement with the co-tenants. Offer them, oh, $500 to settle all the remaining issues and disputes, including the utilities. They would then get to keep any additional rent payments they would get by renting out the space. I'd get a signed agreement to that effect signed by both co-tenants and make the $500 payment to the landlord to be sure that money is going toward rent and not into the pockets of the co-tenants.




I was going to suggest offering a settlement (see my asterisk which went nowhere), but then I figured, why encourage the son to to try get out of his obligations? He's already bad enough with money as it is.

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307524 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 3:27 AM
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feedmeNOWhuman,

You wrote, (C) worst case, they'll fail to pay and get evicted, and then the landlord will come after everyone and your son would be responsible for a third of the total judgement amount plus legal fees.

Again, neither the judge nor the landlord will care about a private verbal agreement which is not a part of the lease. Your son would never be legally responsible for more than a third of the total lease amount.


In my experience this is not true. Rental contracts (I suspect in most states) routinely seem to require joint and several liability of the named tenants. This means the landlord is free to go after everyone on the lease and he doesn't have to care if it all has to come out of one person's pocket.

- Joel

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307525 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 9:01 AM
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You and your son may want to keep the Golden Rule in mind.

As a landlord, this kind of situation is often a nightmare and is why I try to avoid renting to unrelated people.

How old is this son ? Why are you rescuing him ?

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307526 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 11:39 AM
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Offer them, oh, $500 to settle all the remaining issues and disputes, including the utilities. They would then get to keep any additional rent payments they would get by renting out the space.

Offering a settlement may only take him in deeper. His legal obligation is to the landlord. His unreliable roommates could just take the money and still not pay the rent or run up utilities in his name.

He has signed at least one contract. He needs to deal with his legal obligations regarding the contract(s). He can try to blame the roommates, but in the end he is responsible for his actions.

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Author: LOTROQueen Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307527 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 12:08 PM
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Due to spending his earned income, savings, Roth IRA & maxing out 4 credit cards with debt, my son is moving back home to Start-Over. I confess it was disheartening to learn that he had tapped into his savings & Roth IRA.

Does he have money to pay the IRS penalties for taking money out of the IRA before he's 59 1/2? If not, that needs to be his first priority from a money perspective - he needs to have the money to pay the IRS before April 15.

I thought you could withdraw your contributions to a Roth IRA anytime? It's just any earnings that have to wait until 59 1/2.

And if he doesn't have money to pay the IRS on 5/15, he still needs to file a tax return showing what he owes. Any payment plan set up that way will be far more lenient than failing to file his tax return on time (or file an extension).

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307528 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 12:34 PM
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Does he have money to pay the IRS penalties for taking money out of the IRA before he's 59 1/2? If not, that needs to be his first priority from a money perspective - he needs to have the money to pay the IRS before April 15.

Since the amount owed will be small, if necessary he can arrange a payment plan with the IRS. Their interest rates are reasonable, and they must accept payment plans for amounts under $10,000.

I thought you could withdraw your contributions to a Roth IRA anytime? It's just any earnings that have to wait until 59 1/2.

Contributions can be withdrawn at any time. Roll-overs require aging. It depends on the history of the funds in the ROTH IRA.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307529 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 12:50 PM
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I thought you could withdraw your contributions to a Roth IRA anytime? It's just any earnings that have to wait until 59 1/2.

Yes, contributions can be withdrawn at any time, so if only contributions were withdrawn, there would be no penalty owed. However, the original post said "spending his.....Roth IRA" which indicated to me that the entire account was spent, including any earnings.

Additionally, if there were losses in the Roth IRA, rather than earnings, and the entire amount was withdrawn, the OP's son could actually have a potential deduction.

And if he doesn't have money to pay the IRS on 4/15, he still needs to file a tax return showing what he owes. Any payment plan set up that way will be far more lenient than failing to file his tax return on time (or file an extension).

Yes, although he would still be subject to additional penalties and interest if he fails to pay by 4/15.

AJ

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Author: MetroChick Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307531 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 2:12 PM
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In my experience this is not true. Rental contracts (I suspect in most states) routinely seem to require joint and several liability of the named tenants. This means the landlord is free to go after everyone on the lease and he doesn't have to care if it all has to come out of one person's pocket.

I've rented in NJ, NC, and VA, and it really depends on the state's laws and the lease agreement.

In NC, my lease agreement had a fee I could pay if I wanted/needed out early.

In VA if I broke my lease, the landlord had to actively market the property, and then could only come after me for any rent amount due to the place sitting empty before he was able to refill it. But there are some shared apartment leases where the vacating roommate would pay a large fee to legally break the lease, remaining roommates would not have to re-fill the bedroom nor pay the other portion of the share until the lease is up and renewed.

In NJ, the remaining roommates would have to cover the full rent or find another roommate if they stayed in the apartment.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307532 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 4:36 PM
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<<What are the plans of the remaining two tenants? If they are going to continue the lease, they have a legal obligation to find another tenant to share the space with them.


No, they don't. They have an obligation to pay the rent, along with the son. The landlord won't care if a bedroom is empty >>



It's a principle of contract law that a person has an obligation to mitigate their damages.

In cases involving tenants who move out, that means that the remaining roommates or the landlord have an obligation to seek another tenant to minimize any losses created by someone moving out before a lease expires.

If they fail to do that, they will probably lose their ability to collect damages for someone who leaves early.

Think about it ---

Suppose someone signs a lease for a year and moves out after a month. Should a landlord be able to keep the place vacant and charge the tenant for a twelve months rent?

The answer is --- no. the landlord has an obligation to re rent the apartment as quickly as he reasonably can, and the obligation of the tenant to pay rent under the lease goes away when a new tenant starts paying rent.


Seattle Pioneer

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307533 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 6:30 PM
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AJ has given good advice about him finding out exactly what his lease obligations and utility obligations are. Until he has that information, he is in no position to know what his obligations are. If you haven't done so, you might also inquire if he has any written agreement with his roommates (probably not, but would still ask).

If he does, in fact, have an obligation under the lease, he may want to pay his share on a monthly basis rather than paying a lump sum now. The problem with settling off with his roommates for a lump sum now is that if they subsequently default on the lease the landlord may come after him and won't really care that he paid the roommates already.

As far as where to begin paying off the credit card debt, I have a few comments.

One - Does your son want your help on this and will he accept any advice from you? I have 3 young adult kids. One of them will take no advice from me whatsoever. In fact, trying to give it is counter-productive.

Two - Even if the answer to the above is yes, it will be much better for your son in the long run if he mostly works to solve this problem himself. So, the ideal would be for him to be asking these questions, rather than you. That doesn't mean you can't give advice, but it would still be better for him to be posting here.

Three - The basics of how to pay off credit card debt are not that difficult. Make a budget. Make at least minimum payments on all credit cards. Throw extra money to the highest rate card. When it is paid off, take whatever was being paid on it and snowball it to make payments on the next highest rate card.

In making a budget, I would suggest that you charge him room and board. You can certainly give him a little bit of a deal on this. You might even privately decide to give back some of it to him to get him started when he ultimately moves out. But, it sets up entirely the wrong dynamic to let him come home and live rent free. It may be you have already thought of this, but I did want to mention that this should be part of the budget.

Obviously the above general stuff could be changed depending on the details of how much he owes.

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307534 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 7:57 PM
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Suppose someone signs a lease for a year and moves out after a month. Should a landlord be able to keep the place vacant and charge the tenant for a twelve months rent?

The answer is --- no. the landlord has an obligation to re rent the apartment as quickly as he reasonably can, and the obligation of the tenant to pay rent under the lease goes away when a new tenant starts paying rent.


Seattle Pioneer


but the tenant may be required to pay all expenses associated with finding a new tenant and responsible for the time the property is vacant.

If there are damages or the rent isn't paid, then the landlord can sue for total payment from any of the tenants. The landlord isn't bound by agreements between tenants.

Overall, it is a mess.

You have repeated stated that people should be responsible for the contracts they sign. He needs to explore his options and carefully extract himself from the situation. He needs to make certain that he resolves his legal responsibilities. They are 2/3rds of the way through the lease. Given the fees that can be charged for breaking a lease, it may be cheaper to let the lease run it term.

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Author: Retrograde Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307535 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 8:02 PM
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Suppose someone signs a lease for a year and moves out after a month. Should a landlord be able to keep the place vacant and charge the tenant for a twelve months rent?

It depends on what is written in the lease and what the local/state law says. I have seen people be held responsible -- by law -- for a full remaining lease.* In that case, fortunately, the new employer paid the lease release costs.

So until the tenant has a copy of the lease and has reviewed his local/state rental laws, then all of the advice people are giving for this is purely speculation and may not apply to the specific situation.

*I have since seeing this always had a 60-day notice clause put in my leases such that if I have to move due to job reasons (transfer, new job) that I can give a 60 day notice and be released from a lease. Some landlords balk at this but for me it is not optional. I have had to invoke it once and did so with no problem; that was in a state where the departing tenant is responsible for the entire term of the lease and the landlord did not have a responsibility to re-let the place.

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307536 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 10:14 PM
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SeattlePioneer,

You wrote, It's a principle of contract law that a person has an obligation to mitigate their damages.

You're actually getting into a bit of a grey area here. What are the reasonable actions required to mitigate damages? It will depend on a number of factors ... and a court will often not require the best judgement on the part of the injured party. At least that's been my understanding.

Also, Suppose someone signs a lease for a year and moves out after a month. Should a landlord be able to keep the place vacant and charge the tenant for a twelve months rent?

The answer is --- no. the landlord has an obligation to re rent the apartment as quickly as he reasonably can, and the obligation of the tenant to pay rent under the lease goes away when a new tenant starts paying rent.


It seems to me that there are several questions here that the court would need to review - assuming it got that far:

1. When did the landlord learn the property would be vacated?
2. How much did / would it cost for the landlord to market the property again?
3. What was a reasonable amount of time to rent a comparable property during the time involved?
4. Could the court even establish a comparable market for a rental of a single room? (I don't think you could do that in most states.)
5. What constraints does the state put on rental agreements that might influence the requirement to mitigate damages?

It certainly seems reasonable in your example for a landlord to attempt to re-rent a completely vacated property, given a normal rental market and a completely vacant apartment. But if you just shorten the vacancy from 11 months to say 2 months, would it be unreasonable for the landlord to claim he couldn't replace the tenant in that time?

Trying to fill a single ROOM in an apartment is likely to be more problematic. Sure, you can probably do it quickly if your near a college and the timing is right; but apacherose's son is leaving mid-school year. Such timing is probably going to make a room tough to fill. On average people are probably moving out - not looking for rooms.

Then again depending on the state laws and how the contract is worded, the landlord may not even have the OPTION of replacing apacherose's son as long as the other tenants are present. Since they possessed the property jointly, the presence of the remaining tenants probably makes it impossible for the landlord to unilaterally change the terms in any effort to mitigate his damages. Likely his only option would be to sue for eviction and damages when the rent isn't getting paid.

And if his local rental market is bad mid-school year, he may not even be motivated to evict while receiving partial payments because his total damages might be less by allowing the existing tenants remain ... depending on what they wind up paying him.

Now ... if you're addressing the obligations of the other roommates? As a practical matter, do you really think they're all that concerned right now about the fine details of contract law? They're college students after all.

- Joel

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307537 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/2/2013 11:59 PM
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In my experience this is not true.


What's not true?


Rental contracts (I suspect in most states) routinely seem to require joint and several liability of the named tenants. This means the landlord is free to go after everyone on the lease and he doesn't have to care if it all has to come out of one person's pocket.



That's exactly what I said. If the landlord only went after one person, or if the judge held only one person liable, it would be a different story. But the way you phrased it, you agree with me 100%.

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307538 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 12:01 AM
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His unreliable roommates could just take the money and still not pay the rent or run up utilities in his name.




They could have been doing that already, so what's your point?

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307539 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 12:05 AM
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It's a principle of contract law that a person has an obligation to mitigate their damages.

In cases involving tenants who move out, that means that the remaining roommates or the landlord have an obligation to seek another tenant to minimize any losses created by someone moving out before a lease expires.




What losses? The landlord still expects the rent due in full.



Suppose someone signs a lease for a year and moves out after a month. Should a landlord be able to keep the place vacant and charge the tenant for a twelve months rent?

The answer is --- no. the landlord has an obligation to re rent the apartment as quickly as he reasonably can, and the obligation of the tenant to pay rent under the lease goes away when a new tenant starts paying rent.



This example is irrelevant, because the apartment will not be vacant.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307540 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 1:34 AM
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feedmeNOWhuman: You previously wrote, "(C) worst case, they'll fail to pay and get evicted, and then the landlord will come after everyone and your son would be responsible for a third of the total judgement amount plus legal fees."

"In my experience this is not true."

<<<"What's not true?">>>

That the worst case is responsibility for only 1/3 of the total judgement.

The worst case is that OP's son is liable for the total judgement and is left to try and collect from the otehr roommates.

And the prior author does not agree with you 100%. her agrees as to joint and several liability, but not as to your worst case example.

Regards, JAFO

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307541 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 1:28 PM
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The worst case is that OP's son is liable for the total judgement and is left to try and collect from the otehr roommates.




That wouldn't happen unless the other roommates skipped town, which we know won't happen because they'll continue living there.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307542 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 1:50 PM
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That wouldn't happen unless the other roommates skipped town, which we know won't happen because they'll continue living there.

We know this how ?

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307543 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 2:47 PM
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That wouldn't happen unless the other roommates skipped town, which we know won't happen because they'll continue living there.
Yes, it absolutely can happen. They are jointly and severally liable. They can go after any of them for the total amount owed. there is no contractual agreement with the LANDLORD that each owes a third.

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307548 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 5:07 PM
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That wouldn't happen unless the other roommates skipped town, which we know won't happen because they'll continue living there.
-----
We know this how ?




That was a given in the first post. If you have new information that indicates they are deadbeats are who likely to split town, then it would be a different story. If they are college students, they wouldn't be hard to track down at any rate--any competent bill collector can find a college student.

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Author: feedmeNOWhuman Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307549 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 5:18 PM
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They are jointly and severally liable. They can go after any of them for the total amount owed. there is no contractual agreement with the LANDLORD that each owes a third.



And who is the landlord likely to go after if the rent quits showing up, the missing guy or the two who are still living there? Hint: they take the easy route.


I agree that what matters in court is what's written in the lease, but who gets dragged in there is largely a matter of whoever's easiest to find (by a process server) and most likely to yield money. The couple who still lives there is more likely to have extractable money than the broke guy who split.


I'll grant you, I only worked as a bill collector for 5 years and only went to court two dozen times (winning every single one of them, and garnishing wages when necessary), and so if you have more experience in these matters I'm all ears.

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307550 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 5:32 PM
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feedmeNOWhuman,

You wrote, That was a given in the first post. If you have new information that indicates they are deadbeats are who likely to split town, then it would be a different story. If they are college students, they wouldn't be hard to track down at any rate--any competent bill collector can find a college student.

Any competent bill collector will also try to collect the entire bill from each party to the rental agreement.

Also the fact that you can find someone doesn't guarantee you can collect from them - it's just the first step.

- Joel

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 307551 of 308367
Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 5:43 PM
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That was a given in the first post. If you have new information that indicates they are deadbeats are who likely to split town, then it would be a different story.

I have no information about them other than what the mother of the guy who can't manage his money told us.

I will tell you that when I had problems with unrelated people, I gave them a one time only option to break the lease and get them all out.

I will bow to your superior knowledge and quit posting.

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Subject: Re: Son leaving Apt. lease early Date: 12/3/2013 5:52 PM
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Any competent bill collector will also try to collect the entire bill from each party to the rental agreement.


Well, they tend to go where the likelihood of success is the highest. You can't take someone to court who can't be found, because they have to be served first.


Also the fact that you can find someone doesn't guarantee you can collect from them - it's just the first step.




I agree, but it's a crucial first step.

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