Can sellers terminate their temporary lease early?

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01/17/2017 | Author: TAR Legal Staff

Your clients sign a Seller’s Temporary Residential Lease (TAR 1910, TREC 15-5) to remain in their home for 60 days after closing. They pay their full rental amount per the terms in Paragraph 4, Rental, but end up needing to stay in the property only 30 days and want a refund.

However, a seller is not entitled to a refund in this situation. Paragraph 4, Rental, states: “Tenant will not be entitled to a refund of rental if this lease terminates early due to tenant’s default or voluntary surrender of the property.”

Categories: Forms, Legal, Sellers
Tags: legal, sellers, forms, contracts


Rick DeVoss on 01/20/2017

Yes, this is true.

And while we’re at this topic, let’s make a distinction that many people seem to confuse.

An Amendment is something that changes the terms of an existing contract.

An Addendum is a part of a contract that is added on additional pages.

The Temporary Lease is an example of an “addendum”.  (See the list on the contract.)  Once the contract is signed, that addendum becomes a part of it, and is Not a stand-alone lease agreement.

You can “amend” a contract after signing it, if both parties agree.  ~But you cannot “amend” a contract that has already closed…!

So please stop telling your customers that “everything is negotiable”...

David Davis on 01/20/2017

You beat me to the punch.  I said this the other day.  CLOSED means CLOSED!  Finished, final, no more, nothing left to do, over with, done, completed, end, got it?

That TEMPORARY LEASE is part of the purchase contract as amended.  Once that contract has closed, you cannot amend it!  I don’t care if your name is GOD, its OVER!  There is no amending it!

Rick DeVoss on 01/20/2017

As Agents, we need to remember we are not attorneys.

You can “negotiate” issues prior to the signing of a contract.
You cannot negotiate issues AFTER a contract has been agreed to, signed by both parties, and closed by the title company.  ...Perhaps some of you are confusing a regular lease with a Temporary Lease which is a part of a Sales Contract.  ~Once the contract and the addendum are signed & dated, you cannot “re-negotiate” it.  —-It becomes binding on both parties.

After the fact, or after the closing in this example, the two parties would have to hire an attorney if they wish to negotiate a new deal.  Then, and only then, could they draw up a new contract that would supersede the terms of the one you already closed.

A Real Estate Agent can help two parties negotiate a lease all by itself.  ~But, you cannot draw up a document that would modify a closed contract, because TREC hasn’t given you that authority.

The main reason that buyers and sellers don’t understand contracts that they sign, is because Agents don’t take the time to explain the terms to them.  ~Stop using “DocuSign”, and do the job you are being paid for!

Thomas J Wright on 01/20/2017

Almost anything can be negotiated or re-negotiated…  however, to do so requires agreement from all signing parties.

Kendra Norwood on 01/19/2017

Of course everything is negotiable; however, Agents can not continue to negotiate a contract that has closed and funded.  The rent is collected at closing.  If the Buyer wants to credit the Seller back for an early move out they may as a courtesy.  That is strictly something they should do independent of the agent.  Unless the agent is practicing property management they should not get involved.  The contact numbers are part of the temporary lease.  The new landlord has every right to contact their new tenant to negotiate the terms of the lease.  Contracts are legal and binding. The temporary lease is part of the contract and it states their is no credit for early move out.

Oksana Fusarelli on 01/19/2017

Depend on situation-everything is negotiable! Agents must explain terms of this lease to their clients and make sure its understood by both parties- as early as possible, discuss possible situations and negotiate before lease is signed.

David Davis on 01/17/2017

Debbie B Murphy,
Of course it’s right.  Here’s why: The reason it is not negotiable after the fact is because it is a condition of a closed & settled contract.  It was a Temporary Lease that was made part of a purchase agreement by amendment and that purchase agreement has closed and been settled.  There is no going back on it.  If it were not part of the purchase agreement then there could be changes and amendments to the lease.

Debbie B Murphy on 01/17/2017

Doesn’t seem right and should be negotiable

Cary Beach on 01/17/2017

Its very clear in the contract and its their agents responsibility to make sure it is understood by both parties there are no refunds on any unused Rent. Buyers normally make adjustments to accommodate the sellers for the days the seller needed lets all be fair to both parties.  Agents need to make sure these things are fully understood up front!  The buyer may be committed to pay rent on another home based on what the seller needed at the time they agreed to the Temp lease. Just because the seller vacated the home early does not change the buyers commitments they had made to accommodate the sellers with the move from their current home.

Mark McNitt on 01/17/2017

I remind my client (Buyer or Seller) that the terms of the temporary lease cannot be modified UNLESS both sides agree.  I have seen the Sellers ask to be let out of their temporary lease early and ask for a pro-rated refund.  Strictly up to the Buyers if they are OK with this.  Buyer may have made plans for their own temporary accommodation plans and this lease ending early may or may not help them.  Just remind both parties to talk to each other as early as possible. 
Agents need to review these documents and run through the “what ifs” ahead of time to avoid any surprises.

Mark Ates on 01/17/2017

When providing a temp lease, the best solution is to point out the conditions up front so that no issue comes up later.  An email with details, pointing out the conditions provides proof of discussion so that you can quickly cut off requests for refund.

Donna on 01/17/2017

It’s annoying when it’s the buyers (or their agent) putting pressure on the sellers to terminate it early and then not giving a refund when the sellers do agree to go ahead and move out early from the pressure.

Lenny Schwartz on 01/17/2017

in many situations i have found that the buyers readily agree that if the seller can vacate sooner then they agree to refund unused rent… everything is negotiable!

David Davis on 01/17/2017

I often wonder why parties think they can circumvent the process.  They agree to a set of terms, and then want to change those terms after have agreed to them.  Why?

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