Lease termination - what are my obligations to the Realty Company?

May 28, 2017 3:18 PM

[MA Apartment Rental] My lease was through Aug 30. Notified property manager of intention to break lease with 60 days notice, and found a new tenant to take over lease with intention to re-sign for 3-5 years. Realty Company is asking us to pay broker's fee (1/2 months rent) and continue to pay rent until they received first month's rent from new tenant - but June is now technically our last month and they collected first, last, and security 5 years ago during lease signing. What do I have to pay?

Our Rental property managers/realty company seems sketchy. Please help us not get screwed over.

We notified our realty company on May 1 of our intention to vacate June 30, and found them a new tenant whom they approved and will be moving in July 1 with intention to resign for 2018-19. Two questions about our situation:

1. Because we're breaking lease, they are requiring that we pay 1/2 months' rent in a the form of a broker's fee (which is stated in the lease as "reasonable broker's commission for the re-letting of the leased premises" when lessee defaults on the lease, but does not specify amount. What it does specify is it serves as "indemnification against any loss and damage sustained by reason of any termination caused by the default of or breach by the Lessee.") I tried to make the case that we did all the work finding someone to replace us so shouldn't have to pay the fee but their response was: "There is more to the application process than just finding a potential tenant. There is time spent by our office corresponding with the applicant, providing the application documents, obtaining a credit report, reference checks, preparing the lease documentation and meeting with the tenant to sign the lease." They would have had to do that on their own in September if we had stayed through the lease (it was advertised as a no-fee apartment five years ago) so why do we have to pay this now? Do I have a leg to stand on in fighting this?

2. They collected first, last, and security when I signed the least 5 years ago. Can they require that we pay our last month's rent *again* (which would be June 1-30 rent) with the intention to reimburse us once the new tenant moves in? Or should I go with my gut and refuse to pay considering this upcoming month is our last month of rental.

Other sketchy details: In 5 years I have never received notification of interest statement on either security deposit or last months' rent, which as far as I understand is required by MA law, and they also charged an application fee to both myself and the new tenant which afaik is not allowed in MA.

I cannot wait to be free of this company! Thanks in advance for the help.

posted by danapiper to Law & Government (11 answers total)

Pay the half month's rent. It's what I like to call Fuck You Money(tm). That's the money you pay to be free of them. It's OK if you secretly hope they choke on it.

For everything else, IN WRITING cite relevant landlord/tenant law stating your position, include a COPY of your lease with the relevant clauses and money amounts highlighted and send it all via certified mail. In the same letter, cite interest requirements as per Massachusetts state law, and name the amount of money they owe you. Obviously, do not pay June rent, as they already have it.

Have they signed the lease with the new tenant and does the new tenant have their copy? I would not send this firm letter stating your boundaries and the law until the new tenant has their own copy of the signed lease because the management company could screw you over by denying the new tenancy. But otherwise, fuck them. Take pictures of everything once your stuff is moved out, clean the place. Deliver the keys and get a receipt for the keys.

Good luck.
posted by jbenben at 3:38 PM on May 28, 2017 [3 favorites]

Best answer: Are they asking you to pay the broker's fee TO THEM or to a real estate agent? They're not allowed to charge a broker's fee, period, because they are the landlords in the transaction, not the real estate broker. I mean you can pay it if you want and you think it will be easier, but it seems pretty obviously scammy. Check out the statute: http://www.mass.gov/ocabr/licensee/dpl-boards/re/regulations/rules-and-regs/254-cmr-700.html

Oh also, though, do not count on getting your security deposit back without a fight.
posted by mskyle at 9:44 PM on May 28, 2017 [3 favorites]

This is definitely scammy. If I found myself in your position I would fume about it for a few days, then calmly remind them that I already paid my last month's rent, tell them to take their Fuck You Money (which they don't deserve, but...) out of my deposit, then call them daily upon moving out until I got the other half back. If they refused, I would point out the aforementioned ways they appear to be breaking the law and decide that I want my full deposit back.
posted by STFUDonnie at 10:18 PM on May 28, 2017 [3 favorites]

mskyle is correct and I am wrong. Don't pay the money, instead include the relevant statute in your certified letter telling them it is against the law for them to charge this fee on top of all the other stuff they are trying to pull.

I know it's tempting to get really upset, but remain business-like if you can.
posted by jbenben at 11:03 PM on May 28, 2017 [1 favorite]

You already paid last month's rent? Pay them nothing. Inform them that you already paid last month's rent and broker fees are their responsibility by law. If they still don't get their first payment from the new tenant after June 30, then they can bug you, but I'd think you shouldn't owe them anymore money. How big was your security deposit? They can always try to steal from that anyway. I've forfeited deposits when they weren't too big just to make breaking the lease easier.
posted by AppleTurnover at 11:33 PM on May 28, 2017 [1 favorite]

Response by poster: We have no contact with the landlord, all dealings are through this property management / realty company so it is not the landlord asking us to pay the fee, it is the realty company themselves.

Thanks for all the advice! I won't be paying them any more money and will mentally prepare for a fight over the security deposit.
posted by danapiper at 4:08 AM on May 29, 2017 [1 favorite]

Best answer: I won't be paying them any more money and will mentally prepare for a fight over the security deposit.

Don't mentally prepare; physically prepare with video footage in daylight of your vacated apartment. Run every tap, turn on an off every appliance, and take identifiable stills of the floors and walls and ceilings in each room.
posted by DarlingBri at 4:21 AM on May 29, 2017 [5 favorites]

Best answer: Don't mentally prepare; physically prepare with video footage in daylight of your vacated apartment.

Include that day's newspaper in your footage so that you have proof of when the video/photos were taken.
posted by belladonna at 6:56 AM on May 29, 2017 [3 favorites]

Best answer: As the landlord's agent, the management company IS essentially the landlord, and they can not charge the broker's fee.

Did you sign anything agreeing to pay this fee? They might be able to submit the fee to a debt collection agency OR take the fee from your deposit, but if the law is clear all you have to do it cite the relevant statutes in writing to legally dispute any debt or legally demand your full deposit back from the management company - whichever is relevant. Collecting a fee as the landlord's agent is the same as being the landlord + they are already paid to be the landlord's agent and perform all tasks required for managing the property, they can't double charge and it is why that law exists. If that fails, going to small claims court is easy, and also an option if they wrongly withhold your deposit to pay the fee.

Hey! They are a realty company? Can you do me a favor when this is all over and you have all your money back?

Keep all letters and emails concerning this "brokers fee" and submit them in the form of a complaint to your state real estate licensing board, cc'ing your state's attorney general's office. Please do this. The RE Licensing Board will definitely review their license, the state's attorney general may investigate. You have no way of knowing if you are the first or the 50th person to report this (should be) licensed business, licensing comes with all sorts of rules and laws they must follow, please please report them and supply documentation when it's all over.

You ultimately have the upper hand. Hope this helps.
posted by jbenben at 7:43 AM on May 29, 2017 [8 favorites]

Response by poster: The brokers fee was only that provision in the lease (which we signed) but the amount was not specified and was noted as an option. From a link earlier it looks like they have to specify the amount somewhere for it to be considered legit according to MA law? We did sign an agency disclosure form which clearly states "no fee" in it for monthly rent. But as this is not them trying to apply a fee to monthly rent not sure it is helpful.

We have lease in hand and can move in to the new place any time we want so security of living arrangement is not an issue.
posted by danapiper at 1:54 PM on May 30, 2017

Response by poster: An update

We both agreed by email that the deposit would be returned within 30 days of returning the key. I made sure to photo and video document everything when we moved out and beyond dropping the key and forwarding address had no further communication with former landlord. I was gearing up for a fight on day 27 when still no deposit, but then I received deposit check, plus interest on deposit AND 5% interest on last month's rent (since interest rate wasn't specified in the lease it defaults to 5% per MA law). No further mention of brokers fee going on 3 months now. We are friendly with the person who moved in to our old place and she mentioned that the lease now specifies an amount of brokers fee for any changes in the lease off-cycle so I think the realtor may have realized I was right...?

Calling that one a win! Thanks all for the confidence boost to stand my ground.
posted by danapiper at 5:38 PM on August 21, 2017 [1 favorite]