Tenant gave notice-now not leaving

We are in MN.

We had a 2 year lease agreement with the renters. It was until August of 2009. On July 1st of this year they gave us a letter stating that due to unforseen circumstances (lack of work) they would need to break the lease and would "vacate the premises no later than July 31, 2008."

We offered to reduce the rent and allow them to stay and put the house on the market. They declined. We told them that we would try to get it rented by August 1st but that if we didn't we would keep the security deposit for payment in August. We posted it on Craigslist and showed it to about 6 prospective renters throughout July. Only two of those 6 filled out applications. One family (who could have rented it in Aug) we declined because in talking to their current landlord they were slow payers and were currently 3 months behind. That left the other couple who could not rent until September 1st. We told that couple that we were really trying for August 1st but would let them know. Nothing else worked out for August 1st.

Well, it is now August 15th and the previous tenant still has belongings there and is taking his time moving out. He is also still doing laundry at the house. He is claiming that if we give him the security deposit he will leave but otherwise he feels that he has paid rent for August. I completely disagree! Am I wrong? He stated they would vacate by July 31st and now he just isn't going to.

The people that are moving in September 1st would like to store some things in the garage and plant some plants and put up their swingset in the yard. The guy who says that he still has a right to be there said he doesn't want them on the property unless they are paying rent??!!

Please can someone let me know who is right in this situation? Do we have the right to tell him he has to leave NOW or not? He said he would be out and (I feel) is just angry that we used the security deposit to pay the mortgage this month. Thanks in advance!

If he has not paid rent, serve a Pay or Quit notice to him. If he fails to pay up or leave completely before the notice expires, then file for eviction based on non-payment of rent. Inform the new couple that they cannot store items or have access to the premises until this tenant is out. (Their items would be at risk.) Let them know there may be some delay in getting him out.

You may want to consult an eviction attorney too. You may be able to forgo the above notice based on their written notice to vacate. Since they have failed to vacate as stated, you may be able to proceed directly to eviction on the basis of holding over. Do not speak to the tenant and have no further contact with him while this is in dispute. He will not be getting his deposit back since he has failed to pay rent for the month.

Once out, send a statement within the time limit for your state showing that you deducted unpaid rent, damages, advertising, agent fees if you use one to find a new tenant, and any unpaid utilities that you, as owner, will be held accountable for. Let him know he has 30 days to pay any amount in excess of the deposit. Then take him to small claims to get a judgement for any other monies he owes.