Examining an Agreement to Vacate
An Agreement to Vacate is a document between a landlord and a tenant/resident that sets forth an agreement for the departure of the tenant/resident from the rental premises. It is not unusual for it to be prepared sometime in advance of the actual departure date. This document serves a purpose similar to a settlement agreement between an employer and employee that provides for the termination of the employment relationship. Sometimes, the rental arrangement becomes strained because of problems with the duration or the intent of the residency at the time the tenant entered into the rental arrangement. Although the lessor may request the resident to vacate the premises the resident may dispute the necessity to vacate. Consequently, in order for the resident to formally dispute the necessity to vacate, the resident may embark upon the process required for a formal eviction. At some point during that process, however , the parties may reach an agreement. The agreement might provide that upon the payment of a specified sum of money or the taking of some action other than the payment of money that the tenant will vacate no sooner than some date certain. An agreement to vacate that memorializes that understanding not only confirms the voluntary execution of the document by the tenant and the landlord, but may also set forth the understandings of the parties as to payments to be made, which can result in the dismissal of the eviction.
It is also very typical in rental arrangements for all parties to agree as to the duration of the tenancy and when it will come to an end. There are times, however, when pursuit of a lease or rental agreement is delayed. This might be because the rental agreement has been broken and a new rental agreement is imposed upon the other party or the old rental agreement has expired and the parties make a decision to enter into another rental agreement. Or, the tenancy of the premises may have expired. In that circumstance, the party that remains in possession may sign an Agreement to Vacate that provides for the dates by which the tenant will vacate the premises.
Essential Components of the Agreement
Commonly, a written agreement authorizing an occupant to vacate premises will contain, at its minimum, some or all of the following components:
- Agreement Name. A settlement, relinquishment, or release of claim.
- Property Identification. The address and location of the premises to be vacated.
- Parties. Its signatories, including all owners or agents with control of the premises, as well as all members of the occupants’ household over the age of 18.
- Eviction of Occupants. A provision indicating the date on which the occupants must vacate the premises, followed by most of the key elements found in an eviction notice giving a tenant a time period to vacate. These include a provision detailing the condition the occupants should return the premises to the landlord -such as professionally cleaned, or simply in "move-in" condition. It must also indicate that re-keying costs may be withheld from the tenants security deposit. The document also may note that if a tenant remains on the property, he or she becomes liable for eviction costs as a stipulated damages term rather than seeking a judgment and then executing on it, as well as the right to recover attorney fees as well. Finally, it will inform the tenants that if they breach the agreement, the owner may proceed with eviction without further notice to the occupants.
- Waiver. A statement that the landlord and owner waive their right to move forward with a claim for possession if the tenant vacates the premises on a certain date, and that the owner agrees not to take any other action against the tenant following the expiration of the notice, which obligates the landlord to release a judgment to the tenant (should that be the resolution of the matter). It also may indicate that if the tenant pays all rent due and vacates the premises by a specific date, the owner agrees to send the tenant a settlement check within a set time period – i.e., thirty days – in the amount of the tenant’s security deposit.
Legal Insights
In many circumstances, a tenant will not vacate the premises on the date the lease expires. A landlord will often contact a tenant to gain a better understanding of when and if the tenant will vacate the property. Upon doing so, the landlord may be presented with false hopes as the tenant offers deceitful promises of a specific move-out date but fails to honor that commitment. Sometimes a tenant vacates the property on a later date but damages the premises in the process.
In order to avoid conflict later on, it is best practice to have a signed agreement between both the landlord and tenant in the event either party violates the terms of the lease. Without this agreement, a court will not force any agreement between the landlord and tenant as there are no legal obligations of either party to adhere to. Several legal issues could arise in this context. First, it may be unclear if the tenant paid rent for the month which was subsequently prorated. Second, although the original lease was terminated, the addendum may be enough to satisfy the statute of frauds. Lastly, the landlord may not recover all of its damages if it was not an intended third-party beneficiary.
Avoiding a nasty confrontation between the tenant and landlord is possible if both parties have a written agreement. In the absence of an agreement, the landlord would be required to enforce an eviction proceeding through the court and potentially not be awarded all of its damages.
The tenant may sue for breach of contract if the landlord enforces the agreement. This is most likely to happen if the landlord is trying to enforce the agreement strictly and the tenant believes it does not need to do so. For example, if the tenant left the premises prior to the scheduled move out date and the landlord did not claim all of its damages then laid out in the agreement. As a result, the tenant would have a valid argument that it did not intend to leave the premises until the scheduled date and its damages were only what existed on that date.
If a tenant breaches an agreement to vacate, the landlord must be careful to record a timely and accurate record of the tenants’ property. Texas Property Code Section 70.107 lays out the 15 day requirement for a landlord to hold the property "for a sufficient time to permit the tenant to claim the property." Furthermore, if either party breaches the contract, the innocent party shall be entitled to receive its damages. Given this, it is important to specify the types and amounts of damages a landlord could receive. If the parties cannot agree on the amount of damages the landlord suffered, there is a strong likelihood a judge may step in to award an arbitrary amount. Thus, without including proper language, a landlord may not recover for every type of damage (i.e., damages caused by a third party breaking and entering the premises) and may not be awarded for all of the damages it suffered (i.e., cost of hiring a damages expert).
How to Craft an Effective Agreement
The specific steps necessary in order to create a legally binding agreement to vacate will vary based on the local laws and the type of tenancy. However, general best practices for creating agreements to vacate are as follows:
- Communicating the Intent to Get the Tenant to Vacate Premises. This is often done by sending a notice to vacate to the tenant through email, regular mail, or certified mail. The notice should state that the lease is being terminated and the tenant must vacate the premises. Most landlords will allow for a period of time for the tenant to vacate. During this time, it is important to continue monitoring the premises for damage or other problems.
- Getting the Agreement in Writing. In order for the agreement to vacate to be enforceable in court, it should be put in written form and signed by the parties involved. The written format will often protect the landlord against a claim by the tenant that he or she was given a verbal extension, time, or otherwise not required to leave the property. To ensure that this clause is encoded properly, the following language should be used: "It is agreed that each promise to be performed by either party under this agreement is independent of each other promise to be performed. This agreement contains the entire agreement between the parties, and may not be modified or amended except in writing, and signed by both parties."
- Make Getting the Agreement Signed a Priority. When the tenant signs the agreement, it shows that it was mutually understood what the tenant was responsible for doing prior to vacating the property. When the agreement is signed, it shows that the both parties were in full understanding of the terms and timing of the agreement. It is always best to have the agreement notarized.
- Consider Seeking Legal Assistance. The tenant may ask for a modification to the lease and even ask that he or she be allowed to move out without notice. If a verbal agreement is made by the landlord, the tenant does not have to worry about being evicted from the property. The landlord has a right to refuse this request, but sometimes it becomes necessary to partially or fully discharge the tenant from the lease. In these instances, legal assistance can help in negotiating the situation.
Common Errors in Agreements
Mistake #1: Failing to Reach Agreement on Clear and Defined Terms
Once you’re equipped with the right knowledge, you can get to work hammering out the terms of your mutual agreement. A common point of contention among landlords and tenants is how rental payments will be handled in the final month of occupancy. Usually, a tenant’s last rent payment will come due halfway through its final month – no matter when the tenant’s term ends. The law gives landlords the right to prorate the portion of rent for that period, which they’ll be entitled to withhold from a security deposit if necessary. In exchange, landlords should offer to tell tenants explicitly which stuff in their rental will be wiped out as part of the agreement. "This is the type of information that could save a tenant some real headaches later on , " says Cartwright. "Not to mention a whole world of expense and legal wrangling."
Mistake #2: Not Using Written Agreements
One of the most common mistakes that landlords and tenants make is allowing too many terms of a lease agreement play out verbally instead of in writing. Verbal agreements can be difficult to prove later on, so for your own sake, try to get all of the key terms of your agreement down on paper. "Written lease amendments provide the surest means of enforcement and ensure that all parties know what’s expected of them, so get your amendments down on paper!" advises Cartwright. "And, along the lines, if a lease requires signatures from both you and your landlord, always get written consent."
Case Studies and Examples
A case study involving a family-owned business demonstrates not only the complexity of an agreement to vacate but the importance of detail in how you structure agreements. A family successfully owned and operated a restaurant for three generations. Like a lot of owner/operators, they neglected to exercise the option contained in their lease to purchase the property, purportedly because the previous landlord had promised to extend the option. When the landlord’s broker informed them that the landlord was marketing the property and gave them a deadline to exercise the option, they chose to do nothing. But the landlord had forgotten to market the property, so the family missed the rescission date.
The landlord finally signed a contract to sell the property to another buyer. However, as soon as they learned about the unexpected sale, they exercised their option. The landlord responded with an agreement that allowed the family to stay in the unit if they vacated by Christmas (some six weeks later) and pay all rents and related charges, which were current at the time.
The family fulfilled the conditions of the agreement to vacate, but when December 23 rolled around, a dispute arose about whether they had vacated the premises. The landlord’s lawyer advised that his client would be taking possession as scheduled. But there was a mix-up and the property manager went to the wrong location. So, it became publicly known that no one had taken possession.
The family received a letter that day, on December 23, to the effect that the landlord was reserving all its rights. The family wrote back contending that they had clear title and should be given an additional 21-days to obtain counsel. The landlord lawyer responded the next day. This time, it was allegedly written by two lawyers of record, and it said he would "be forced to take possession." However, the landlord had not yet taken possession. So the landlord submitted a second letter (the next day on December 24) confirming that it had not taken possession, but if they did, the landlord would have the right to relocate them at its cost to a comparable location. Therefore, the tenant had no right to re-enter the premises after vacating or to remove any fixtures.
The family wrote back claiming the landlord’s letter was a repudiation of the agreement to vacate and re-enter the premises. But two days later, December 26, the landlord lawyer wrote to say he was "getting very worried" that his client’s contract with the third party buyer required it to give the family a 30-day notice to vacate. He threatened that the family must vacate immediately and cease to prosecute any lawsuit "regarding which the landlord’s motion to dismiss is now pending."
On Tuesday, December 27, the landlord lawyer sent yet another letter, this time carefully outlining what would happen in court if the family did not vacate the premises by noon. But the family did not vacate. In some cases, it is necessary to agree to an eviction date, like here, but you can expect further litigation if you are not represented by counsel.
Questions & Answers
Since both tenants and landlords are often involved in drafting and signing vacant possession agreements, we thought there might be a few frequently asked questions that could be helpful for both sides.
What is the difference between an agreement to hold over and an agreement to vacate premises? An agreement to hold over is one in which a tenant and a landlord agree to extend the term of the lease, whereas an agreement to vacate premises is one in which a tenant and a landlord agree to terminate the lease.
What if the tenant vacates the rental property but has not removed all its furniture? An agreement to vacate premises from a rental property legally ends the lease, however if items remain in the rental property, such as furniture or appliances, the landlord is allowed to keep the items until the tenant has paid for any reasonable costs the landlord incurred because of holding on to the items.
My lease states that it can be terminated only by mutual agreement in writing, but I did not sign the empty premises agreement. Is this binding? No , it is not binding because you did not sign it.
I was never given a copy of the agreement to vacate premises. Does it matter? A tenant is entitled to have a copy of any written agreement that he or she signs. If you do not receive a copy after you sign it, you should request one to be sure you have a copy of the terms you have agreed to.
I agreed on the agreement to vacate premises that I would remove my belongings, yet weeks later they are still here. How do I get back possession of my belongings? You should ask your tenant if he or she will voluntarily return the items to you. If he or she does not return them within a reasonable period of time after being asked, you may be required to give the tenant reasonable notice of your intention to dispose of the items found on the rental premises. You may consider serving your tenant with a notice to allow time to retrieve the goods and to advise your tenant of your right to dispose of the goods if your tenant does not retrieve them. If the tenant fails to reclaim the goods within a reasonable period of time, you may be entitled to keep the goods or to dispose of them.