As a tenant, you may have heard about the term relet fee. As the name implies, it is a fee charged by the landlord or property management company in the event of a tenant breaking their lease or vacating the rental unit before the end of the lease term. In this article, we will discuss everything you need to know about relet fee, including its definition, when it is charged, how much it usually costs, and more.
What Is A Relet Fee?
A relet fee is a fee that a landlord or property management company charges to the current tenant who vacates a rental unit before the end of the lease term. This fee is typically collected in addition to any other fees related to early termination of the lease agreement.
When Is A Relet Fee Charged?
A relet fee is charged when the tenant decides to break their lease early and move out before the end of the lease term. In such a scenario, the landlord or property management company is obligated to find a new tenant to occupy the rental unit as soon as possible. The relet fee is charged to the current tenant as compensation for the expenses incurred by the landlord in finding and vetting a new tenant. The fee is justified as it covers the cost of advertising the rental property, showing it to prospective tenants, running background checks on potential tenants, and drafting a new lease agreement.
How Much Is A Relet Fee?
The amount charged for a relet fee varies depending on the terms of the lease agreement and the landlord or property management company’s policies. The fee is usually calculated as a percentage of the monthly rental charges or a flat rate. The typical range for a relet fee is between 50% and 100% of one month’s rent. So, if the monthly rent for a rental unit is $1000, the relet fee would be between $500 and $1000. However, it is important to note that in some cases, the landlord may choose not to charge a relet fee or waive it entirely, especially if the current tenant has a good rental history.
Relet Fee Vs. Security Deposit
It is important to differentiate between a relet fee and a security deposit, as they are not the same thing. A security deposit is an amount of money that the tenant pays at the beginning of the lease term as a security against any damages the tenant may cause to the rental unit. The security deposit is usually equal to one or two months’ rent and is refundable at the end of the lease term if no damages have been caused by the tenant. A relet fee, on the other hand, is a non-refundable fee charged to the tenant for breaking their lease and leaving the rental unit before the end of the lease term.
Why Do Landlords Charge Relet Fees?
Landlords or property management companies charge relet fees to cover the cost of finding a new tenant in the event of the current tenant breaking their lease early. It is a legitimate way for landlords to recoup the cost of marketing the rental property to find a new tenant, as well as the administrative fee of processing a new lease agreement. Without the relet fee, landlords would have to absorb these expenses themselves or pass them on to other tenants within the same property. A relet fee also incentivizes tenants to complete the term of the lease as it makes breaking the lease an expensive option. The fee ensures that tenants are aware of the financial obligations that come with breaking a lease term, which helps to reduce tenant turnover and vacancies in the property.
In conclusion, a relet fee is a fee that a tenant must pay to their landlord or property management company when breaking their lease early or vacating the property before the end of the lease term. The fee covers the cost of marketing the rental property, processing a new tenant, and drafting a new lease agreement. Although the amount charged for a relet fee varies, it is usually a percentage of the monthly rental charges or a flat rate. Tenant should be aware of their contractual obligation before breaking their leases.