I rented out a house in King County, WA. The tenant signed one year lease on the WA state standard lease form.

Seven months into the lease, the tenant informed us that she was going to move out in two months. It happened at one of the inconveninent month. I had a baby and my husband was on the business trip most of the time. We scrambled to find a new tenant. In the end there is no gap in between.

The tenant who broke the lease now asked us to refund her security deposit. Her reason is that we found the tenant and there is no gap between two leases. She kept the house clean during the showing. She had to move two days out to accommodate the new tenant.

Since you didn't have any financial losses as a result of her moving out early you are required to return her security deposit. You may only deduct the costs for any necessary repairs that were not caused by ordinary wear and tear.

I don't see any reason why she shouldn't get her security deposit back. As you say, she kept the house clean; you weren't inconvenienced by her early move, and you had a new tenant in record time.?

Not sure what you have to do legally, I supposed because she broke the terms of the lease you could keep it but if she gave you lots of notice, you agreed to try to find a new tenant and did and all is well in the end, why not give it back to her? I was in a similar situation and once the new tenant paid the security deposit my landlord gave me mine back (I paid for the ad to find a new tenant and did the showings). If there were costs associated with finding a new tenant you could keep that.

At this point you need to return the deposit. The purpose of a security deposit is primarily to protect the landlord against damages to the property. A secondary purpose is cover unpaid rental. Since you suffered no monetary loss there is no reason to withhold the deposit.

For future reference however, unless your lease has an early termination clause, you did not have to ler her out of the lease. When she informed you that she was breaking the lease, your response should have been;

I'm sorry but you signed a lease that doesn't expire until x date. Since you are giving me 2 months notice, I will try to find a new tenant, but you will be responsible for any rental until they take over or until the lease expires whichever comes first. I am, however, willing to allow you to buyout the lease for 2 months rent.

You would then have to make a REASONABLE effort to rent the premises (instead of having to "scramble"). Or you would have the cushion of the buyout amount.

Scott, didn't mean to imply she should keep the deposit, if you read past the first sentence of my post you'd see that was not what I was suggesting. All I meant was she could have refused to let her out of the lease and kept it, but she was kind enough to work with her and I think she should continue the kindness and give back the deposit (which she is required to do at this point according to your post). I commented because I had been in a similar situation once, I'll leave it to the experts next time.

Thank you all for the response. Maybe I should have added a little more detail:

1. In King County, Jun. - Aug. are high seasons with higher demand and higher rental price. We originally targeted with renew the lease in Aug. But the early termination forced us to list the rental in April, which is rainy and with low demand.

2. We set up a reasonable price, hence during the first and second weeks, there were two family would like to rent house at our target price, but they wanted to move in at the beginning of May. The tenant refused to change the move out date, even thou she closed at the end of April. We even offered hotel stay for a week, so the new tenant could move in as they wish. But the tenant refused. In the end, we have to rent it out $100 lower than the target price. It is very probable that we can rent for higher price, if we list in Aug.

Question:

1. Can we take $1200 from the security to cover the rental loss?

2. The tenant did move out early before the end of the month, and the new tenant moved in right away. Do we have to pro-rate the rent and refund to the tenant.

Thanks again for your response.

I'll deal with the easier question first. Yes you should pro-rate the rental. You really can't charge for time they weren't there once you let them out of the lease.

Now for the harder question. No you can't take the $1200 out of the security. This is not legal use of the security. However, you certainly can sue the tenant for the presumed losses if you can document them. If you can show that you lost higher paying tenants because of the current tenant's actions then you have a cause of action against them. Take them to small claims court.

What you might try is placing the security in an escrow account pending the results of the litigation. Not sure how that would fly, but it might give you a better chance to collect if you win.