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  1. #1
    Join Date
    Apr 2012
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    Default Can I Keep Security Deposit when Lease is Broken

    My question involves landlord-tenant law in the State of: Alabama
    My tenant signed a 15 month lease and after 1 month is breaking the lease because he is buying new home. We mitigated and found new tenant with a difference in rent of $1800.00 which he has paid. Our lease states if he breaks the lease he loses the security deposit. We also have a re-listing fee of $1000.00. He hired an attorney who informed us we must give his security deposit back within 35 days of move out less any home damages. He also informed us that any damages we feel are recoverable under the Alabama Landlord Tenant Act should be submitted for review. We feel we are due the security deposit and the re-listing fee. Any help would be very appreciated!!

  2. #2
    Join Date
    Feb 2010
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    Default Re: Can I Keep Security Deposit when Lease is Broken

    you are due to be made "whole"....so list the losses you had incurred...I don't know what you mean by "we mitigated"--any paperwork involved with that? Your post-lease breaking mitigation may usurp your lease terms. And your automatic loss of deposit may run afowl of your state law...so chk this out.

  3. #3
    Join Date
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    Default Re: Can I Keep Security Deposit when Lease is Broken

    Alabama's law on secuity deposits provides as follows:
    Quote Quoting Alamaba Code, Sec. 35-9A-201. Security deposits; prepaid rent.
    (a) A landlord may not demand or receive money as security, in an amount in excess of one month's periodic rent, except for pets, changes to the premises, or increased liability risks to the landlord or premises, for tenant's obligations under a rental agreement.

    (b) Upon termination of the tenancy, money held by the landlord as security may be applied to the payment of accrued rent and the amount of damages that the landlord has suffered by reason of the tenant's noncompliance with Section 35-9A-301 all as itemized by the landlord in a written notice delivered to the tenant together with the amount due 35 days after termination of the tenancy and delivery of possession.

    (c) If the landlord does not refund the entire deposit, the landlord, within the 35-day period, shall provide the tenant an itemized list of amounts withheld.

    (d) Upon vacating the premises, the tenant shall provide to the landlord a valid forwarding address, in writing, to which the deposit or itemized accounting, or both, may be mailed. If the tenant fails to provide a valid forwarding address, the landlord shall mail, by first class mail, the deposit or itemized accounting, or both, to the last known address of the tenant or, if none, to the tenant at the address of the property. Any deposit unclaimed by the tenant as well as any check outstanding shall be forfeited by the tenant after a period of 180 days.

    (e) The landlord's mailing by first class mail to the address provided in writing by the tenant, within 35 days of the refund or itemized accounting, or both, is sufficient compliance with this chapter.

    (f) If the landlord fails to mail a timely refund or accounting within the 35-day period, the landlord shall pay the tenant double the amount of the tenant's original deposit.

    (g) This section does not preclude the landlord or tenant from recovering other damages to which the landlord or tenant may be entitled.

    (h) The holder of the landlord's interest in the premises at the time of the termination of the tenancy is bound by this section.
    Quote Quoting Griff1980
    View Post
    We mitigated and found new tenant with a difference in rent of $1800.00 which he has paid.
    So your actual damages are $1,800, and your tenant has agreed to make sure you're covered for 100% of your actual damages.
    Quote Quoting Griff1980
    Our lease states if he breaks the lease he loses the security deposit.
    It makes sense to use an attorney-drafted lease, and there are many sources of commercially prepared leases that are periodically attorney-vetted such that you can be reasonably assured that they'll hold up under the laws of your state. It sounds like you're cooking things up yourself and thus tripping over the statutory rules.

    If you want to have a provision in your lease where you and the tenant agree, up-front, that the tenant can buy his way out of the lease for certain consideration (e.g., two months rent or three months rent) that will generally hold up, but you can run into real trouble trying to recharacterize a security deposit as forfeit when the statute provides when it must be refunded and there's no statutory allowance for withholding it as a penalty. Allowing a tenant to buy his way out does open up the potential that you'll incur a loss after the agreed-upon buyout period, and if you make the buyout terms too onerous you'll be back where you started, but if you're reasonable with the terms you can make this type of situation a lot easier to resolve.
    Quote Quoting Griff1980
    We also have a re-listing fee of $1000.00.
    What does that mean? Are you stating that you paid somebody $1,000 to list the home for rent, which seems pretty exhorbitant, or are you stating that you tossed in another arbitrary figure on top of your attempt to claim the security deposit? It sounds like the latter. Liquidated damages clauses are meant to approximate actual damages, and generally won't be enforced if they appear ot be penalties. The actual amount of money you spent relisting the home was what?

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