As a tenant, I prefer to have overlapping possession whenever possible. I'd rather pay an extra 1/2 month to be able to have a smoother move.
However as a landlord I don't see any reason to give them a break to end their lease mid month. They should pay until the end of August- giving you a minimum of a full month's notice. If you want to be nice to them, you can let them know that if you find somebody willing to pay to move in mid-month you will refund them. However I would not be going out of my way for them.
I've had to give notice on the 2nd or 3rd before; knowing full well that I was now giving 1.9 month's notice.
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