Ask Me Help Desk - Can a Tenant avoid a penalty clause by forcing a pay or quit?

Can a tenant avoid a penalty clause by forcing the eviction process?

I am a landlord for a condominium rental in Virginia. The current lease agreement contains a penalty clause if the tenant breaks the lease early, stating that the tenant is required to give 30 days notice, and pay a penalty equal to half a month's rent. It was what we agreed to when we had it signed. (personally, I thought it was rather lenient).

If the tenant wants to break the lease immediately, and wants to avoid the penalty, it's possible, then, for that person to just hold out payment of the lease until I issue a "pay or quit," right? Then, they would have the right to take the quit option, and would not be held to the lease.

I would then have to file suit to pursue the penalties I'd be entitled to, correct? And the half-month's rent wouldn't be one of them, from the looks of what I've read. What I'd be entitled to seems to be the following:
1) payment for the portion of the unpaid rent in which the Tenant had remained in the premises.
2) payment for the portion of lost rent that I had not been able to re-capture through re-letting the space.

Or is it that I would still be able to pursue penalties defined in the lease? There are a couple that I can think of that seem relevant:
3) late payment penalties
4) half-month's worth of rent for breaking the lease early.

So, I guess my real question here is "is the lease agreement that we signed still enforced despite the "pay or quit" notice?

Hello Roy:

Pay or quit doesn't mean that if they choose to quit, that they don't have to pay. They just don't build up any more arrears. So, your lease is valid.

Yes, you were extremely generous by the terms you gave. I'd also get a larger deposit next time, then you won't have to worry about stuff like this.

excon

Yes, that is extremely generous termination clause.

Also, once YOU terminate the lease via a Pay or Quit, then any early termination clause is moot.

But they will owe rent up to the point they vacate.

Quote:

Originally Posted by ScottGem

Yes, that is extremely generous termination clause.

Also, once YOU terminate the lease via a Pay or Quit, then any early termination clause is moot.

But they will owe rent up to the point they vacate.

So, if the tenant's tricky about it, and just plain moves out on the first of the month that they choose to non-pay, they would be on the hook for nothing?

You'd be waiting till the 6th day of the month to issue the pay or quit, then you'd wait till 11th to file the Unlawful Detainer. Get your court date. All this time, the tenant's gone. They're not on the hook for that many days worth of rent?

I figured it would be considered "abandonment," in which case you would still be able to pursue

1) payment for the portion of lost rent that I had not been able to re-capture through re-letting the space.

Right? That is... if you can establish abandonment.

If the tenant moves out and you can prove when they vacated, then you could go after them. But if you terminate the lease by pursuing an eviction you are the one breaking the lease..

Quote:

Originally Posted by ScottGem

If the tenant moves out and you can prove when they vacated, then you could go after them. But if you terminate the lease by pursuing an eviction you are the one breaking the lease..

So, if I want to pursue a default clause, where I hold the tenant responsible for the remainder of the financial obligation, I can't actually simultaneously evict the tenant. Hmm... interesting.

Sounds like you need to re-write the lease on the next tenant.

Quote:

Originally Posted by Fr_Chuck

Sounds like you need to re-write the lease on the next tenant.

Ah, re-reading the default clause, I figured out what I didn't understand earlier. The pay or quit/eviction isn't what you do instead of exercising the default clause, it *is* the exercising of the default clause. Mine looks like this.

Quote:

"If Tenant fails to pay rent when due and the default continues for five (5) days thereafter, Landlord may, at Landlord's option, declare the entire balance of rent payable hereunder to be immediately due and payable and may exercise any and all rights and remedies available to Landlord at law or in equity OR may immediately terminate this Agreement.

There's a big fat OR in there that agrees with you, ScottGem.

So, the pay or quit asks for the remaining X months of rent or get out and surrender the premises. If the tenant is already out, the tenant needs to surrender the premises, i.e.: return keys et. al. I am free to let the place immediately, and hope to re-let the place without losing money. If I can get that to work, no money lost, and minimal effort... all's well.

So then, if it takes a while to re-let, and I lose money, I can still pursue lost income if there is any with a legal claim.

Quote:

If the rental agreement is terminated, the landlord may have a claim for possession and for rent and a separate claim for actual damages for breach of the rental agreement, reasonable attorney's fees as provided in § 55-248.31, and the cost of service of any notice under § 55-225 or § 55-248.31 or process by a sheriff or private process server which cost shall not exceed the amount authorized by § 55-248.31:1, which claims may be enforced, without limitation, by the institution of an action for unlawful entry or detainer. Actual damages for breach of the rental agreement may include a claim for such rent as would have accrued until the expiration of the term thereof or until a tenancy pursuant to a new rental agreement commences, whichever first occurs; provided that nothing herein contained shall diminish the duty of the landlord to mitigate actual damages for breach of the rental agreement. In obtaining post-possession judgments for actual damages as defined herein, the landlord shall not seek a judgment for accelerated rent through the end of the term of the tenancy.

In any unlawful detainer action brought by the landlord, this section shall not be construed to prevent the landlord from being granted by the court a simultaneous judgment for money due and for possession of the premises without a credit for any security deposit. Upon the tenant vacating the premises either voluntarily or by a writ of possession, security deposits shall be credited to the tenants' account by the landlord in accordance with the requirements of § 55-248.15:1.

It's all clear now. Thanks, folks!