What is a Voluntary Move Out Agreement?
A voluntary move out agreement is a mutual agreement between an owner and a tenant that allows the tenant to move out of the rental property voluntarily. In other words, the tenant can move out sooner than the end of their current lease period or their month-to-month rental period. This move out has a very specific outcome in mind: the hope that the tenant will leave in a manner that will allow the owner to minimize their damages and to find a new tenant sooner rather than later.
To be effective, the move out agreement must have very specific terms, including a date by which the tenant must vacate the premises—a date at which point the rental agreement will terminate. Typically , the owner and tenant will also have an agreement regarding the rental payment for the period of time in which the tenant will be occupying the rental property before it is vacated.
Some people have erroneously suggested that a move out agreement may only be used when things are peaceful and there is a consensus that the tenant has to or wants to move out of the rental property. However, there is nothing in the law that would suggest that a move out agreement is limited to certain peaceful situations.
Instead, they can be used in a variety of circumstances. Examples might include:
Regardless of the reason, an owner can utilize a voluntary move out agreement to allow a tenant to voluntarily leave the rental property at a date certain.
Crucial Elements of a Voluntary Move Out Agreement
A voluntary move out agreement is a legal framework meant to ensure a smooth transition for both the employer and employee upon termination of employment. Key components include: Specific terms of departure. A voluntary move out agreement specifies the exact date on or by which the employee will separate from the company, including methods of separation (e.g., job elimination or inducement, resignation, etc.) and time specific post-employment activities. Compensation details. The agreement should enumerate any compensation eligibility issues, including severance payment amounts and timing. Compliance with benefit plans. A voluntary move out agreement should specifically state that it supersedes any other agreements with respect to plan benefits and that any agreements are automatically amended to comply with the terms of an involuntary layoff plan. Potential liability claim releases. The agreement should state that the employee waives any and all potential claims against the employer and releases the employer from liability for any and all claims that the employee may have against the employer. Compliance with post-employment covenants. The voluntary move out agreement should advise the employee of any existing non-compete, non-solicit, confidentiality, or other restrictive covenants. The agreement should also state that the employee will be in breach of such agreements by working for a competing employer, in competition with the employer. Legal considerations. The voluntary move out agreement should provide the employee with the opportunity to consult with an attorney, allow a 21-day consideration period, and a seven-day revocation period. Waivers and blanks. Clear and conspicuous notations of applicable waivers pursuant to the Older Workers Benefit Protection Act (OWBPA) are required for a waiver of ADEA age discrimination claims.
Advantages of Voluntary Move Out Agreements for Landlords and Tenants
Voluntary move out agreements provide a win-win for both landlords and tenants. For landlords, these voluntary agreements get them moving in the right direction to regain possession of the property and get their space re-rented.
For tenants, voluntary move out agreements have advantages as well. Tenants may not want to deal with an eviction process that can be costly and time consuming, both in terms of money and time spent away from work.
Since landlords and tenants reach a voluntary move out agreement before an eviction is initiated, both parties can clearly communicate the expectations on both sides. Landlords can express concerns they have about their property and tenants can express the expectations they have for obtaining their security deposit back.
Voluntary move out agreements also reduce conflict. Rather than being served an eviction notice in front of a judge in the court house, landlords and tenants are voluntarily exiting on a mutually agreed upon date.
How to Create a Voluntary Move Out Agreement
In most cases, the owner of a rental unit uses the move-out agreement as a written record of the terms of an agreement with their tenant. If the tenant and owner agree on additional terms, the parties should consider preparing a move out agreement.
Here are some steps for drafting a move out agreement to help both the tenant and owner understand the terms of the rental relationship. In addition, the move out agreement may be used in a court of law as evidence of what the parties agreed to regarding the end of the lease and any additional terms.
- Identify each party involved in the lease. A voluntary move out agreement is between more than just an owner (landlord) and a tenant (like many traditional rental contracts). As such, each party’s identification should include their respective roles (e.g., Manager, Employee, Owner) within the agreement.
- Define the agreement. The move out agreement should state the entire agreement between the owner and tenant. If there are any stay provisions or exceptions from the agreement, they should be specified.
- Set a date. Each party should specify a date for which the agreement begins and ends. Further, a party should be specific if they want the agreement to extend to other periods of time (e.g., month to month).
- Set terms for damage to the property. Some owners will require tenants to maintain the property and indemnify them from any damage. If the tenant must pay for damages, the amount and types of damages should be explicitly stated in the agreement. In addition, the equal liability of each party for damages should be clear in the agreement.
- Define specific rights and responsibilities of each party. Each party should carefully consider what rights they intend to retain for themselves and what rights they are willing to allow the other party. They should then specify these rights in the agreement. In addition to assessing their individual rights, parties should consider whether they believe that the remaining provisions were reasonable.
- Prepare and sign the addendum. Once the parties negotiate the terms, an addendum should be prepared and signed. Each party should keep a copy of the addendum in case it becomes necessary to enforce the agreement in court or in any other dispute resolution method.
- Evaluate whether to seek counsel. Both parties should consider whether they want legal counsel to prepare the voluntary move out agreement. This is especially true because rental units and workspaces are often subject to more laws than a typical transaction. Additionally, if one or both party’s interests become adversely affected, they may have legal claims for breach of contract or similar claims that may not be entirely covered by the agreement.
Common Pitfalls to Avoid with Voluntary Move Out Agreements
Many landlords jump into a voluntary move out agreement without fully understanding what they are clarifying or relinquishing as part of the arrangement. While some of the most common mistakes do not get you in trouble with the judge or mislead the parties, it can still be problematic because you have failed to comply with Virginia law and unintentionally released the tenant from paying rent. One of the most commonly used provisions is to list all of the dates that rent will be due through the expiration of the lease and require the tenant to pay it all up front at the time that the tenant voluntarily vacates the rental residence. The goal is for the landlord to collect on all money owed and avoid a later lawsuit. While this scenario is often enticing to a landlord, and causes the tenant to pay more rent than they would have at the regular scheduled times, it violates Virginia law. Virginia law states that "If a rental agreement fixes a definite term of months or longer and provides for the payment of rent at the beginning of each term, a tenant has the right to pay the full amount of the rent due under the lease or rental agreement upon the first day of the first month of such term …" See 55-248.16:2(B). Thus, if the move out agreement terminates the lease and the landlord requires the entire rent through the end of the lease to be paid at the time of the move out, the landlord is giving up the legally required right of the tenant to pay rent at the beginning of each monthly rental term . One way to balance is to prorate the monthly rent for the days remaining in the month following the last date that rent was paid. Another alternative is to simply allow the tenant the agreed upon grace period to stay in possession of the rental unit. A second mistake is the failure to require the tenant to provide:
Without these pieces of information, the agreement is unenforceable by all parties. Even if you are not requiring the tenant to pay any funds at the time of the agreement, you should still have a substitute address requirement, as it is often the primary address used for purposes of the return of the security deposit. A third mistake is to misstate the amount of rent that is due. Sometimes this is caused by math errors, sometimes it is because the tenant recently made an extra payment to catch up or to apply that extra payment to a specific month, and other times it is because the landlord is simply being generous and forgiving of some of the unpaid rent. If the rent was actually due, and even if it was shown due after the tenant moved out, the deposit should be applied to the delinquent rent, not forgiven altogether. Finally, if you are going to forgive all or a portion of the rent, or apply any portion of the deposit towards an alleged lease violation, be certain that you qualify the reasons for doing so. Otherwise, it runs the risk of looking like the landlord is simply forgiving back rent which the $30 per day plus use and occupancy is often awarded. This again can affect whether the tenant must pay you the full amount of rent owed when the tenant files a warrant for their unlawful detainer.
Legal Considerations and Enforcement
Voluntary move out agreements are generally enforceable, but judicial enforcement is fact-specific. The primary concern is whether the agreement truly was voluntary or whether one side was under duress. This concern is based on the basic contract law principle that all contracts require a meeting of the minds to be enforceable. A tenant will have a strong case for vacatur if she can show that she was under duress when she signed the agreement. There are two underlying policies in the law that should inform judges’ determinations about whether to enforce voluntary vacate agreements. The first is that the law seeks to deter landlords from engaging in abusive illegal conduct that causes tenants to leave. The second is that the law avoids sanctioning wrongful conduct by tenants, such as maliciously abandoning units to avoid liability for rent. Which policy applies in a particular case may depend on the underlying circumstances.
Section 8 tenants should not be forced to sign a voluntary move out agreement if the unit is being substantially rehabbed. If the landlord demonstrates that it cannot create a substantial rehabilitation plan that does not displace the tenant or that it would cost further than the tenant’s voucher is worth to subsidize substantial rehabilitation with the tenant in the unit, there likely would be a valid claim for independent relocation assistance in state court or alternatively, an affirmative defense in eviction court. Although voluntary relocation is encouraged for regular tenants and market rate renters, the policies favoring tenants not to be displaced for a landlord’s substantial rehabilitation do not change merely because a unit is occupied by a tenant holding a Section 8 voucher.
Both the City of Chicago and the State of Illinois encourage voluntary move out agreements by paying for moving and storage costs in certain circumstances. Attorneys representing tenants should familiarize themselves with the Criminal Justice Authority’s movers’ voucher program and the Illinois Department of Human Services’ moving assistance benefits.
In addition to the right to reenter a property, a tenant can seek other affirmative equitable relief appropriate in the case, after a finding that the agreement was not entered into voluntarily. This can include monetary damages for out of pocket costs to enter and retrieve property. Depending on the scope and permanency of the rehabilitation, there may also be claims for intentional infliction of emotional distress and interference with economic advantage.
Equitable relief is often provided in a very fact-specific way to give effect to the intent of the parties and the needs of the party seeking relief. For example, while Section 8 housing is designed to be kept affordable for tenants, the City and Illinois state law clearly cannot indemnify the tenant for losses incurred from the displacement. In some cases, tenants lack access to the financial means to recover for out of pocket costs needed to recover property. Affidavits will often be necessary to support the demand for damages.
Frequently Asked Questions About Voluntary Move Out Agreements
A few questions we get from clients about voluntary move out agreements:
Do I have to pay any kind of fee or penalty to the landlord if both parties agree to a voluntary move out?
Not under Pennsylvania law. Tenants and landlords are free to enter into any voluntary agreement between themselves to terminate the lease that they desire. This is distinct from mutual rescission of a lease, which must be done by court order, statute or local ordinance under Pennsylvania law.
What if there is a security deposit as part of the voluntary move out?
That question depends on the understanding of the parties. The landlord should return any security deposit immediately in accordance with the terms of the lease. Where the parties make an agreement for the tenant to pay any past due rent, the landlord may keep the security deposit.
Will the landlord still credit the voluntary move out against the lease record for purposes of future rental applications?
Within the real estate industry, most landlords will still consider the lease term met if a voluntary move out takes place . This is probably true because the applicant has been in custody, and thus on the lease record, right up until the time of the voluntary move out. In this case, the landlord has experienced an early, unscheduled change of occupancy. It would be viewed the same as a tenant who moved out early for another job.
If the tenant is evicted and then they end up moving out "voluntarily" to avoid being locked out, do they get the eviction erased from their record?
In our experience, the tenant will end up with an eviction record. However, the tenant may be able to explain to a property manager that they were facing a final judgment and eviction schedule with a sheriff’s sale date when they voluntarily removed themselves from the property. In this situation, the police department does not consider the tenant an "evicted tenant" for the purposes of appearing on the crime watch list.