Thinking about ending your lease early? Then you might have heard your landlord mention something about a reletting fee. The question is, what is a reletting charge exactly? In the simplest terms, it’s a fee used by landlords and property managers to cover the costs of re-renting a property after a premature lease termination. But, what does this exactly entail? Continue reading to find out!
Key Takeaways
- A reletting charge pays for the cost of re-renting a unit after early move-out, not as a penalty.
- Landlords usually charge a reletting fee when tenants break a lease early and don’t secure an approved replacement.
- Reletting charges cover marketing and screening costs, not unpaid rent, damages, or cleaning.
What Does a Reletting Charge Mean in a Lease?
Drawing from our experience as property managers San Antonio landlords trust, we understand that finding a reletting charge on your lease can be a bit confusing. So, let’s get things straight.
First, the reletting charge on a lease is designed to protect landlords from early lease terminations. This is because, while breaking your lease is generally allowed, it puts landlords in a difficult position where they have to deal with an unexpected vacancy. And, if this happens at a time when it’s not the peak rental season, landlords and property managers may have trouble finding your replacement.
What the reletting charge does is that it compensates landlords for the administrative costs, time, and effort that it takes to address the consequences of your leaving. Typically, you’ll find the reletting charge in a lease set at a flat rate or a percentage of your monthly rent (around 80% to 100%).
When Do Landlords Charge a Reletting Fee
One thing that you need to know is that a reletting fee can be charged on a case-by-case basis. Specifically, Texas regulations provide conditions under which a reletting fee for early lease termination is applicable or not.
First, let’s talk about when landlords charge a reletting fee. Most commonly, you’re expected to pay a reletting fee if you wish to break your lease before the end date. Similarly, if you request your landlord to find a replacement to take over your lease, you’ll also be charged a reletting fee.
But what if you opt to find a replacement instead? That is a viable alternative that offers you an opportunity to avoid the reletting charge. However, failure to find and secure an approved replacement for your lease means that you still need to pay the reletting fee, despite all of that effort.
Another possible scenario is abandonment. In the case that you abandon the property, your landlord can still charge you a reletting fee to cover the costs of re-renting it in your absence.
However, as we’ve mentioned earlier, there are conditions where the charge for reletting the property is either waived or simply inadmissible. This includes lease terminations due to military active duty (following the Servicemembers Civil Relief Act) as well as protections from family violence, sexual assault, and stalking.
At the same time, a reletting fee is not enforceable if it’s not specially indicated on the lease. So, your landlord can’t just spring it up when you decide to terminate your lease early. On top of that, Texas regulations state that landlords must provide a reasonable effort in finding your replacement (Texas Property Code 91.006). Failure to do so can render the reletting fee inadmissible.
What Does a Reletting Charge Cover?
More than knowing what is a reletting charge in real estate, you might also be wondering what exactly this fee covers. Basically, the reletting fee is used to bear the cost of finding your replacement – from marketing to overhead. Let’s take a closer look.
First, there’s marketing. The moment you let your landlord know that you’re terminating your lease early, they need to put their rental property back on the market. This includes listing the property on leasing websites, updating photos of the property, and other publicity materials. On top of this, the reletting fee also covers the expenses involved in property showings and open houses.
Aside from marketing, the reletting fee also helps in covering the cost of reviewing rental applications, running background checks, verifying credit history, and the like. Past this step, landlords and property managers use the referral charge to pay for staff salaries and other overhead costs.
On the contrary, landlords and property managers can’t use the reletting fee to pay for unpaid rent, repair property damages beyond normal wear and tear, or even cleaning.
Reletting vs Subletting vs Assignment
In order to better understand what is a reletting charge and how it works, it’s important that you learn the different options available if you want to terminate your lease early. Specifically, we’re going to look at reletting, subletting, and assignment agreements and how these work. Here’s a quick review:
Reletting happens when you break a lease early, and the landlord or property manager handles the process of finding your replacement. On the other hand, subletting occurs when you leave but find someone to live in the unit temporarily under your lease. Then, a lease assignment is a setup where you terminate your contract, but before doing so, you find a replacement tenant.
When you sublet or assign your lease, there’s a chance that you can avoid paying the reletting fee if you succeed in finding a tenant that your landlord approves.
A Disclaimer
We’re only providing general information in this article for educational purposes only. While we aim for accuracy and reliability, the information shared is not meant to be relied on as legal, tax, financial, or specific regulatory advice. We strongly recommend that you always consult with a licensed attorney, CPA, or other qualified professional in your specific jurisdiction for advice tailored to your unique circumstances, as reading this blog does not establish a client or advisory relationship with BMG.
How Bay Property Management Can Help
In the end, a reletting charge pays for how much it costs to re-rent a unit after you move out early. It’s a fee many tenants will find if they choose to break their lease.
Looking to move out soon? Getting a home with a professional property management company, like us at BMG, can help make this process so much simpler. Our experts can match you with a home that meets your needs and budget. We’ll be with you every step of the way! Interested? Contact us today and let’s get started.