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What is a reasonable termination fee (PA) - Landlord Forum thread 355990








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What is a reasonable termination fee (PA) by mdk0420 on February 1, 2018 @23:15

                              
I have been working on fine tuning different things with the lease that I got with my first rental. I've been doing a pretty good job with it, but I know the security deposit is a very touchy subject and can cost a lot if handled wrong. So I want to try and come up with what could be a reasonable early termination fee.

The main question: What is a reasonable termination fee or other penalty for breach of lease in PA?

I'm not sure how early termination fees are applied. State law is pretty specific with what a breach of lease is. This breach of lease. So if the breach of lease is caused by the tenant, or the lease is terminated in result of the tenants actions of breaking the lease, would asking for 2 months rent be ok? Or should I ask for a flat fee rather then based on rent?

I was thinking something along the lines of $500 OR the time it takes to re rent the unit, including all advertising, re leasing fees (if using a management company), and still being responsible for the rent until the unit gets rented, whichever is greater. Would this work? Also I would require a 30 day notice.

I think $500 is a reasonable fee. I hear a lot of people issue 2 month fees. But I don't know if that would work in PA. I think the tenant should be responsible for all the fees associated with a management properties fees for re renting the home, or if a management company isn't use then the time it takes and the money it costs for a landlord to get it re rented. That is fair correct?

Just trying to figure out the best way to do this. I want to make it as clear as possible on the lease what will happen if the tenant tries to leave. Right now my lease has an acceleration clause, but that type of clause is sometimes out of line. If a tenant leaves 1 month after they started a year contract, I find it ridiculous to charge them for 11 more months without them living there. And I believe most courts would probably agree with that. Since you would have the business practice of trying to re rent it, and if you re rent it how can you charge someone rent, while receiving rent from someone else.

So please voice your opinions on how to best handle this termination fee. I don't like the acceleration clause and would rather stipulate this more directly and fairly. Giving the tenant a way out, but not without taking a lost since they aren't honoring the lease.
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Re: What is a reasonable termination fee (PA) by mdk0420 on February 2, 2018 @00:45 [ Reply ]
Here are the two phrases I wrote. Let me know what you think. I made one specifically for terminating the lease early, that way it is in no way a breach of contract and rather just an out option for the tenant. The second phrase is for a breach of contract and is worded a little more harshly, but in the end they are both basically the same thing.

"5. Early Termination: Tenant is required to give a 30 day written notice to Landlord requesting to terminate the lease early. Tenant will be held responsible for up to two months of rent or until the unit is rented to a new Tenant. Tenant will be charged with all costs associated with renting the home to a new Tenant including but not limited to, advertising and management company fees. Tenantsí security deposit may be withheld to cover these damages in addition to any other damages outlined in this lease. Landlord will in good faith, attempt to rent the unit to mitigate costs associated with vacancy."

"6. Consequences of Breach by Tenant: If Tenant, by any act or omission, or by the act or omission of any of Tenantís family or invitees, licensees, and/or guests, violates any of the terms or conditions of this Lease or any other documents made a part hereof by reference or attachment, Tenant shall be considered in breach of this Lease (breach by one tenant shall be considered breach by all tenants where Tenant is more than one person).

In compliance with Pennsylvania Code 250.501:

A landlord may notify, in writing, the tenant to remove from the leased premises at the expiration of the time specified in the notice under the following circumstances, namely:

1. Upon the termination of a term for the tenant
2. Upon forfeiture of the lease for breach of its conditions
3. Upon the failure of the tenant, upon demand, to satisfy any rent reserved and due.

In case of the expiration of a term or of a forfeiture for breach of the conditions of the lease where the lease is for any term of one year or less or for an indeterminate time, the notice shall specify that the tenant shall remove within fifteen days from the date of service thereof, and when the lease is for more than one year, then within thirty days from the date of service thereof. In case of failure of the tenant, upon demand, to satisfy any rent reserved and due, the notice shall specify that the tenant shall remove within ten days from the date of the service thereof.

Tenant expressly agrees and understands that upon a tenantsí breach of lease or Landlordís termination of this lease due to a breach, an amount of 2 monthsí rent will be due immediately. Landlord may hold the portion of Tenantís security deposit remaining after reasonable cleaning and repairs as a partial offset to satisfaction of the damages.
Initial: ________________________________________"

Thoughts? Nothing sounds unreasonable? Within state laws? Thanks :)

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