Dallas-Fort Worth Real Estate Investor Club

Tenants are getting a divorce - Questions?

  • 12 Oct 2013 1:25 PM
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    Message # 1410930
    Jason McDougall
    I have a rental property that is now on a month to month lease. The tenants are wanting to get a divorce. The husband wants to sign a new lease and stay in the house, the wife wants to leave. She wants me to give her half of the security deposit. I told her that since the husband is still living there, I can't give her half of the security deposit unless there is a complete move-out and I make needed repairs and deduct damages from the security deposit, then pay her half of what is due. She is telling me that her attorney said that I need to give her half of the security deposit and have the husband that wants to stay pay the remainder of the deposit to bring it back up to the full amount. Any advice? I know that I may need to talk to a real estate attorney, but wanting to know if anybody here has any experience with this? She also isn't giving me 30 days written notice of move-out. Not sure if that matters.
  • 12 Oct 2013 10:53 PM
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    Reply # 1411140 on 1410930
    Michael Mixon
    Jason, I'm in no position to give any LEGAL advice, but I can possibly give you a creative solution so you can avoid needing legal advice.  If you happen to have a vacant property that 
    A) she can afford and 
    B) would be interested in the location
    you could offer to credit her half of the security deposit towards her new security deposit.  She's going to have to live somewhere, and unless she's bumming a couch somewhere, the new place is going to require a security deposit.  In fact that's probably part of the reason she wants the cash.  I'd run this by her, and see if you can help her solve one problem she's facing during this extremely difficult time in her life.

    Depending on what kind of tenant they've been, and how much the original security deposit was, you might consider just letting her have the money, no questions asked.  I don't know their situation, but divorce is one of the worst times in a persons financial lives.  Even more so for many women who have spent many years focusing less on their own income potential and more on providing non-monetary things for her family.  

    If you can afford it, and feel it might be the right thing to do, it would be very kind of you to help this lady out by allowing her some slack on what is likely to be only a couple hundred bucks.  Even if she's not interested in renting from you now, she may need a place in the future, and think of you.  Also consider the word of mouth advertising she might provide you.

    Either way, best of luck.
  • 13 Oct 2013 11:09 AM
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    Reply # 1411322 on 1410930
    Howard Cox
    The return of deposit, if any, should be made payable to all tenants on the lease. The amount is not divisible individually even when the tenants are married. The tenants should/could have created a separate agreement detailing how the funds would be divided between themselves. Texas is a community property state but not all assets of married spouses necessarily have joint ownership. As such, there is no way to determine from which source the funds originated from, joint or individual.

    I doubt that her attorney gave the opinion she has stated. Simply ask her to have her attorney write a simple letter stating this opinion and the applicable statute or precedent providing the basis for it. This will shift the responsibility to your tenant and when she balks you have created the reasoning behind your inability to split the deposit. 

    If she provides you with a 30 day notice of termination of lease I would respond by terminating the lease (with 30 days notice) with all parties and giving the husband the opportunity to execute a new lease for the property if he desires to stay. Return the remainder of the deposit in a check made payable to all tenants.  
  • 13 Oct 2013 9:33 PM
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    Reply # 1411616 on 1410930
    Robin Carriger (Administrator)
    I'm not an attorney, so this is only my opinion; not legal advice.  Assuming her name is on the lease and assuming that the lease contains a clause that says you can use the security deposit to compensate for lost rent if a tenant moves out without giving a 30-day notice in writing, I think the following is true.  The fact that she's moving out without giving the required 30-day, written notice constitutes her breaking the lease.  Since she's breaking the lease, it's my opinion that you should be able to deduct her half of the current month's rent from her half of the security deposit.  If the deposit was equal to the current month's rent, you come out even, and the problem is solved.  If you've increased the rent, she will owe you money; especially if you decide to sign a new lease with her ex, do some repairs, etc.  Whatever happens, please keep us informed on this topic.
  • 13 Oct 2013 9:46 PM
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    Reply # 1411630 on 1410930
    Michael Mixon
    Others would know better than myself, so I'm asking out of curiosity...

    But the wording in the original post leads me to believe that this was a lease for an amount of time, that has now expired and gone month to month.  Assuming that to be true, doesn't the 30 days notice issue no longer serve a purpose?  I was under the impression that once a lease goes month-to-month, it's understood that the tenant may move out at any time, given they are paid up at least to the day they move.

    I could be totally wrong but that's the way I've always understood month-to-month leases.  Absolutely, PLEASE correct me if I'm wrong.
  • 13 Oct 2013 11:28 PM
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    Reply # 1411660 on 1411616
    Howard Cox
    Robin Carriger wrote:

    "you should be able to deduct her half of the current month's rent from her half of the security deposit". 


    There is no half of either rent or deposit. Each co-tenant on the lease is jointly and severally liable to the landlord for the full amount of the lease payment. This concept of each party only responsible for a pro-rata share is non-existent unless the lease specifically states so.

    I wouldn't  let a named tenant off the hook for a portion of the rent. I want the ability to seek payment in full from all parties as one of them may have a greater ability to pay or more to lose if you need to try and recover damages.

    If the lease requires a notice from either party as a condition of termination then the lease continues on a month-to-month basis until such notice(s) have been delivered. If a lease for a period-of-time doesn't require notices then the lease terminates at the end of the designated lease period.
  • 14 Oct 2013 8:59 AM
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    Reply # 1411893 on 1410930
    Robin Carriger (Administrator)

    What you said is correct, Howard, so, in keeping with that "jointly and severally" theme, how about this perspective.  Since the "tenant" is really the combination of the soon-to-be ex-wife and the soon-to-be ex-husband, as long as the rent continues to be paid by that "tenant," the lease has not been broken at all by the "tenant," the "tenant" still lives in the house, and so no deposit refund is due to the "tenant?"  If, as far as the lease is concerned, the "tenant" cannot be split, then the deposit can't be split either until the lease is no longer in effect with the entire "tenant?"

    Another angle is this.  I suppose the landlord and "tenant" could agree to terminate the lease, the deposit could then be refunded as appropriate to the "tenant," and then a new lease with a new deposit could be signed solely with the ex-husband.  After splitting the deposit refund with his ex-wife, that would likely mean that the ex-husband would end up having to come up with more money for his new deposit which he will probably not want to do.  But, if he's willing to do it, the problem would be solved.

    Last modified: 14 Oct 2013 9:00 AM | Robin Carriger (Administrator)
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