At least some on the Eastside are being slapped with big fees for breaking apartment leases — even when the landlord can turn around and immediately re-rent the unit.
When Dilipkumar Dondapati’s contract for a software-engineering project ended, and he was offered a new job in California, he gave notice on the Kendall Ridge apartment he had rented for seven years in the Crossroads area of Bellevue.
The apartment-management company reminded him that his yearly lease required an early-move-out fee equal to two months rent, or $3,500 for breaking his contract.
Faced with such a steep penalty, and with five months remaining on the lease, Dondapati said he informed the manager before the end of the month that he and his family would stay after all.
But the company told him that his unit had been re-rented. He would have to leave as planned and would still owe the early-termination fee.
Contract technology workers in the region are being hit with big fees for breaking apartment leases — even in a hot rental market where landlords can turn around and quickly rent to someone else. The foreign-born workers often don’t complain, their friends say, worried that they’ll jeopardize their immigration status or hurt their chances of renting anywhere else. Other tech renters say they feel they have no recourse once they’ve signed a lease if they’re dissatisfied with the condition of the unit or the customer service offered by the apartment management.
The state Attorney General’s Office opened 91 complaints in 2017 involving residential landlord-tenant issues and property-managment companies, said spokeswoman Brionna Aho. But she added that the office’s Consumer Protection Division can’t investigate the complaints under the state’s Landlord Tenant Act but must refer people to other resources, most of which are available only for low-income renters
That leaves higher-income renters weighing whether it’s worth it to pay a lawyer to try to resolve a lease dispute or walk away from what may seem like an unfair penalty.
Dondapati, a native of India and in the U.S. on a highly skilled worker visa, was reluctant to challenge the early-move-out fee at Kendall Ridge. He said the apartment manager told him that the debt would be turned over to a collection agency and lower his credit score.
He said he finished a project in Seattle on a Friday night and had to be in California for the new job on Monday.
“I didn’t have time to fight with them,” Dondapati said.
His boss in Bellevue was less reticent. Pavan Mukhara, president of the software services company AES, called the apartment manager and asked if the fee could be negotiated. He argued that the management company hadn’t lost any revenue or incurred any apparent costs to advertise or show the unit. He was told that because the lease was not with him, they couldn’t discuss it.
Mukhara said the situation isn’t unique.
“I’ve been hearing about this from so many people. It makes my blood boil. It’s daylight robbery,” Mukhara said.
Other former tenants have voiced similar complaints on Google. Volodymyr Trubachov said Kendall Ridge “charged me an arm and leg when I moved out of these smelly old apartments.”
Tarum Kuman said, “I had a very bad experience staying there … Will charge you like anything when you move out.”
The apartment’s property-management company, Thrive, did not respond to requests for comment.
Attorneys who specialize in real estate said that while the current rental market is feverish in the Puget Sound region, that isn’t always the case, and the early-move-out fees are meant to provide a guarantee to both the tenant and the apartment owner of what reasonable costs to re-rent the unit may be.
“In 2010, as a landlord, you could have a vacancy and not be able to fill it for six months. There’s some benefit to the tenant in knowing the maximum amount that will be owed,” said Chris Benis, a Seattle real-estate attorney with an emphasis on property management.
Dondapati’s lease, for example, says that the fee is for “our time, effort and expense in finding and processing a replacement. These damages are uncertain and difficult to ascertain, particularly those relating to inconvenience, paperwork, advertising, showing apartments, utilities for showing, checking prospects, office overhead, marketing costs and locator-service fees. You agree that the reletting charge is a reasonable estimate of such damages and that the charge is due whether or not our reletting attempts succeed.”
Benis said that Washington has an abandonment law that says if a renter moves out early or abandons the property, the tenant is liable for the lesser amount of either the rent due for the remainder of the lease, or all rent accrued during the period reasonably necessary to re-rent the premises, plus actual costs incurred by the landlord to re-rent the property.
Benis said the early-move-out clause in leases is intended to establish in advance what the remedy is and generally supersedes the state abandonment clause. But, he said, “the fee still has to be fair and reasonable. It has to be a reasonable estimate of what the damages actually are.”
A renter would have to hire an attorney and go to court to argue that the move-out fee is unreasonable, he said, and many people don’t want — or can’t afford — to spend the time or money.
Sean Martin, external affairs director for the Rental Housing Association of Washington, said early-move-out fees are how “landlords are made whole when a tenant breaks a lease.”
His association represents about 5,400 small-apartment owners in the state, not big complexes such as Kendall Ridge, which is composed of 352 units in 16 buildings, according to county property records.
Martin said a common remedy for small-apartment owners when a tenant breaks a lease is to not return the security deposit, an amount that’s more likely to be in the hundreds of dollars, not thousands.
Martin added that if there is clear profit-making in the fees, “that’s not fair and equitable.”
Locked out at Soma Towers
But other attorneys see less nuance.
Mark Chattin, director of the Legal Action Center, which represents low-income clients facing eviction or loss of housing subsidies, said a contract is a legally binding agreement.
“If you terminate the lease early, you are liable for the months remaining,” Chattin said, adding that he had limited sympathy for high-income tenants facing what he called “legitimate fees.”
Fernando Mendez, president of the Seattle tech marketing firm Audienz, had only lived in the Soma Towers apartments in downtown Bellevue for seven months when he became fed up with what he said was poor customer service.
Both his nanny and his cleaning woman were denied entrance at different times. He was told he could buzz them in, but he was typically at work. He said management also told him they could pick up a fob at the front desk, but had to return it by 6:30 p.m. That was also difficult because he was sometimes still at work until early evening, and the nanny couldn’t leave the children alone.
The apartment management, in an email exchange, suggested he could add the nanny and the cleaning woman to his lease. That, he said, “felt drastic.”
The final straw, he said, came when he was locked out of his apartment overnight. The call box to gain entry didn’t have his name listed. Another tenant let him into the building, but his fob wouldn’t work in the elevator. Building security didn’t answer when he called. Mendez said he had to spend the night with a friend.
“This is a classic trap,” Mendez said. “Relatively nice facilities to get you to sign the contract, then awful service and abuses once you’re locked.”
Phone calls and an email to Su Development, which owns Soma Towers, were not returned.
Mendez, a native of Venezuela, has hired an attorney and refused to pay the early-move-out fee of $5,200. He argues that the apartment-management company breached his contract when it didn’t provide access to his guests.
He said the company turned his name over to a collection agency and the unpaid debt has already lowered his credit score.