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 your apartment or house any longer.
There are ways to get out of a lease. 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
These five steps will help you avoid legal consequences if you decide you need to break your lease:
- Review your lease agreement
- Talk to your landlord
- Consider reletting or subletting
- Use a lease termination letter
- Pay the remaining rent
1. Review your lease agreement
One of the first actions you should take when ending a lease early is to carefully read through your lease agreement.
Be on the lookout for answers to these critical questions:
- Does your lease agreement have an early termination clause?
- Has there been a breach of contract by your landlord that would justify breaking the lease? (Ex: Entering without notice, No maintenance, etc.)
- Will you lose your security deposit?
- Are you required to find your replacement?
- Can you sublet?
- 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.
2. Talk to your landlord
As in most relationships, communication is key. Take the following advice to heart when preparing to make your request to your landlord:
Be open and honest
When speaking to your landlord, let them know that breaking your lease is out of your control.
Despite your rent payments making up a portion of their livelihood, if you honestly explain your situation to your landlord, it’s possible they’ll sympathize and let you off lightly — even if the terms of the lease are strict.
Give plenty of advance notice
As soon as you decide 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 advance 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 to take over your lease. The new renter will sign a new lease agreement with your landlord, which then voids your original agreement and releases you from any legal obligations.
- Subletting: Similar to reletting, subletting is when you find a new renter to take over your lease, and they pay rent to you directly. In this case, the new renter signs a sublease agreement with you. However, your name remains on the original lease agreement. This makes you 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 breaking a lease if you sublet (although you still won’t get your security deposit back until the end of your lease).Not all landlords allow subletting. Check your lease agreement or ask your landlord before identifying a new renter.
At the end of the day, it’s still your landlord’s property, so making sure that they approve of the new tenant is extremely important.
4. Use a lease termination letter
If your landlord doesn’t allow reletting or subletting, you could end the lease yourself with 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 agreement.
Verify if any of these claims are true:
- Landlord illegally enters the property: Has your landlord failed to give you 24 hours’ advance notice before entering the property?
- Landlord fails to uphold provisions in the agreement: Has your landlord failed to repair broken fixtures or provide utilities that were previously agreed upon?
- Landlord fails to provide a suitable living environment: Has your landlord allowed the property to fall into disrepair? Is the property so uninhabitable that it’s dangerous for you to continue living on the premises? In legal terms, this is often called a “constructive eviction”.
- The property is an illegal structure: Does your living situation violate regulations in your state?
- The lease agreement has illegal terms: Are there terms in your lease agreement that are unenforceable or illegal? This one requires more research into your state’s laws regarding leasing real property.
If any of these situations have occurred, you have grounds to terminate your lease. As a tenant, you still have rights that are legally protected.
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 a penalty for breaking a lease. If you’re worried about paying everything off at once, discuss with your landlord about the possibility of paying off the balance in installments.
For an option that’s less of a drain on your finances, it’s also possible to negotiate with your landlord about paying rent up until either of you have found a new renter. However, you should still be prepared to hand over the agreed upon amount of cash in order to move out, because it’s best to always plan for the worst.
Consequences of Breaking a Lease
It’s important 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. That 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.
- Paying out of pocket – Lease agreements often include penalties and fees for breaking a lease. Most commonly, early termination fees are two months’ rent. Various state laws limit the maximum amount a landlord can charge, so be sure to check your state’s legislation on the matter.
- Losing your security deposit – In addition to possible early termination fees, you’ll most certainly 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 – On top of all monetary consequences, most renters don’t realize that breaking a lease can negatively affect their credit score. Landlords and property management groups will often report your rental history to credit scoring agencies, and breaking a lease is considered a significant black mark. Having a poor credit score will make it more difficult to rent an apartment in the future.
Breaking a lease is a delicate matter. Knowing what you can and can’t do will help you to settle matters in your favor.