Breaking a lease can have significant legal repercussions, as a lease agreement is a binding contract. Yet sometimes, it’s just not feasible to stay in the current rental property any longer and an early lease termination is the only logical solution.
There are ways to get out of an apartment lease or other rental contract. Understanding what happens if you break a lease will help you minimize costly ramifications that may occur if you need to get out of a lease early.
How to Break a Lease Early
These five steps will help you avoid legal consequences if you decide you need to break your lease contract before the lease term is up.
1. Review Your Rental Lease Agreement
One of the first actions you should take when ending a lease early is carefully reading through your rental agreement.
Be on the lookout for answers to these critical questions:
- Does your rental agreement have an early termination clause?
- Has there been a breach of contract by your landlord or property manager that would justify breaking the lease? (Ex: Entering without prior written notice, no maintenance, health and safety code violations even in common areas)
- Will you lose your security deposit?
- Are you required to find your replacement tenant?
- Can you sublet (look to your rental agreement for words like “sublet,” “sublease,” “early release,” or “relet”)?
- Will you need to pay the remaining rent for the entire lease period?
The answers to these questions will determine whether or not it’s possible to break your lease with minimal hassle and provide you with a stronger exit strategy.
If you have a month-to-month lease, you have likely pre-paid your monthly rent so getting out of this type of lease early poses more challenges than breaking a standard lease.
2. Talk to Your Landlord or Property Manager
Communication is critical when talking with a landlord about an early lease termination. Take the following advice to heart when preparing to make your request to your landlord:
Be Open and Honest
When speaking to your landlord, state that breaking your lease is unplanned and a last resort. The best scenario is that your landlord will let you break the lease early if it’s easy to find a tenant to replace you.
Despite your rent payments making up a portion of their livelihood, if you honestly explain your situation to your landlord, he or she may sympathize and let you out of the lease early even if the terms of the lease are strict.
Remember that in many states, victims of domestic violence or other forms of criminal activity inside the dwelling unit are allowed to terminate a lease early without penalty (you may have to provide your landlord with a police report to prove you are a victim of domestic violence).
Give Plenty of Advance Notice
Once you decide you need to move out, let your landlord know with a notice of intent to vacate. Giving your landlord as much notice as possible will make their life easier because it gives them more time to find your replacement after you move out.
Providing enough notice could influence whether or not you and your landlord arrive at an agreeable resolution.
3. Consider Reletting or Subletting
If you’re having trouble negotiating a clean break with your landlord, consider finding a new renter to either relet or sublet the property.
Finding a replacement on your own is a great way to alleviate your landlord’s fears about losing money when you move out.
Here are the differences between the two options:
- Reletting: Reletting is when you or your landlord find a new renter. The new renter will sign an entirely new rental agreement with your landlord, which then voids your original rental agreement and releases you from legal obligations.
- Subletting or Subleasing: Similar to reletting, subletting is when you find a new renter but there is no new rental agreement between the new renter and landlord. The new renter signs a sublease agreement with you and pays rent to you directly. Your name remains on the original rental agreement. This makes you legally responsible for anything that happens to the property, including if the new renter is late paying rent. Because your original lease is still active, you aren’t technically terminating a lease if you sublet and you won’t get your security deposit back until the end of your lease term. Not all landlords allow subletting. Check your rental agreement or ask your landlord before identifying a new renter.
Additionally, you may want to consider leasing the rooms in your rental unit to cover any rent you cannot make. Instead of breaking a lease because you can’t afford the monthly rent, use our Room Rental Agreement to rent the rooms in your dwelling (with your landlord’s permission).
It’s still your landlord’s property, so making sure he or she approves of the new tenant is extremely important.
4. Use a Lease Termination Letter
You’re legally allowed to vacate the premises without incurring any penalties if your landlord does anything that violates the terms of the lease agreement.
Only use this strategy as a last resort, and only if your landlord is truly legally culpable and unreasonable.
Verify if any of these claims are true:
- Landlord illegally enters the property: Has your landlord failed to give you advance notice before entering the property?
- Landlord fails to uphold provisions in the agreement: Has your landlord failed to repair broken fixtures or provide agreed-upon utilities?
- Landlord fails to provide a suitable living environment: Has your landlord allowed the property to fall into disrepair (no heat or running water)? Is the property so uninhabitable that it’s dangerous for you to continue living on the premises? This is legally known as a “constructive eviction.”
- The property is an illegal structure: Does your living situation violate regulations in your state? For example, in some states, basement apartments are illegal so your dwelling unit might cause your lease to be null and void.
- The lease agreement has illegal terms: Are there terms in your lease agreement that are unenforceable or illegal? This requires more research into your state’s landlord-tenant laws regarding leasing real property.
If any of these situations have occurred, you have grounds to terminate your lease and may be able to file a lawsuit in small claims court.
Also, keep in mind that when a landlord or property manager doesn’t maintain a rental unit and the original tenant can’t use and enjoy the space, constructive eviction laws govern the situation.
As a tenant, you still have rights that are legally protected. Consult an attorney to discuss landlord-tenant laws and your rights.
Additionally, if you have to break a lease due to military service, you may be able to get out of your lease early without penalty (the Servicemembers Civil Relief Act, protects you if you are an active duty service member).
To prove any wrongdoing on a landlord’s part in early lease termination, ensure you have all questionable interactions down in writing.
5. Pay the Remaining Rent
Once you’ve exhausted all your options, the last recourse is to pay off the rent for the remainder of your lease period.
It isn’t always financially feasible for most people, but it’s the only guaranteed way to avoid paying the penalty for terminating a lease and the possibility of negative reporting on your credit report.
If you’re worried about paying everything off at once, discuss with your landlord the possibility of paying off the balance in installments.
For an option that’s less of a drain on your finances, try negotiating with your landlord about paying rent until one of you has found a new renter.
Stay prepared to hand over the agreed-upon amount of cash to move out, though, because it’s best to always plan for the worst.
Consequences of Breaking a Lease
It’s essential to be aware of the potential consequences of breaking a lease early.
While you may not have any other option but to break your lease, you may find yourself:
- Facing a lawsuit by your landlord – A lease is a legal contract, which means your landlord is within their legal right to pursue you in court for remaining rental payments, as well as damages for loss of income and the cost of finding a new tenant. This is a worst-case scenario you should avoid because it could subject you to hefty fines and fees and negative reporting to the credit bureaus.
- Paying out-of-pocket – Lease agreements often include penalties and fees for breaking a lease. Most commonly, an early termination fee is two months’ rent. Various state laws limit the maximum amount a landlord can charge, so check your state’s laws and regulations.
- Losing your security deposit – In addition to possible early termination fees, you’ll likely have to forfeit the security deposit you paid when you first moved in. Be prepared for this loss of money as it’ll impact your new apartment hunt.
- Damaging your credit score – Besides all monetary consequences, most renters don’t realize that breaking a lease can negatively affect their credit score. Landlords and property management groups often report your rental history to credit scoring agencies, and breaking a lease is considered a significant black mark. A poor credit score will make it more difficult to rent an apartment in the future.
Resources for Renters
Tenant unions – Tenant unions are great resources for tenants to determine the specific state law or laws that govern lease terminations, evictions, and lease agreements.
It’s worth contacting a tenant union when you suspect you might have to terminate your lease early because these organizations can explain your rights and suggest additional consumer services that might help your situation.
Breaking a lease is a delicate matter. Knowing your state’s landlord-tenant laws (what you can and can’t do as a tenant) will help you to settle issues in your favor.
When you want to terminate a lease early, take the following five steps before doing anything that may subject you to legal action.
- Review your lease agreement
- Talk to your landlord
- Consider reletting or subletting
- Use a lease termination letter
- Pay the remaining rent