Money Renting Tips & Tricks for Renters

Breaking a Lease: What You Can Do to Minimize Penalties

RentCafe renting an apartment

It’s time to move again. Whether you’re starting a new job, you are getting married, or you simply have to move to another place, breaking the lease on your apartment is a difficult thing to do, and it brings about serious consequences. Like any other contract, a rental agreement implies you keep your end of the bargain. However, life gets crazy and sometimes there is no other option but to end the contract early. In such cases, you want to minimize the penalties that might occur because of your decision. First, you need to understand what the process implies.

What does it mean to break a lease?

The moment you lease an apartment you are legally bound to paying a sum of money for a certain period, usually one year. In the event of breaking this agreement, there are multiple consequences that will reflect negatively on your credit score and credit report, which in turn affects your ability to get a new lease. Typically, breaking a lease means losing your security deposit, paying the remaining rent owed through the end of the term, or both. If the landlord or management company is not willing to negotiate an early termination and your contract doesn’t allow it, you might even get sued.

RentCafe moving truck on the road relocating after breaking lease

 

When is it acceptable to break a lease?

There are situations when penalties for breaking a lease do not apply. These cases include being called to active military duty or having to relocate because of a military order. If you suffer from serious injuries or illnesses which require you to move to an assisted living facility, you are allowed to end your contract earlier. In some cases, if the apartment becomes uninhabitable through no fault of your own, you could break the lease with no penalties. However, you need to have proof of how the damage occurred and be able to make your case. Check the state legislation on this matter as well, as you might find something to cover you there.

How to minimize penalties?

If you don’t qualify for any of the previous situations, there are other options for you to get away with as little damage as possible. Here are some of the things you can do:

  • Know your rights and obligations: Go through your contract again very carefully, as in most cases it tells you what the consequences for breaking the lease are. You should also look for what the agreement says on subletting or assigning the lease, as finding a new tenant might be a solution for you. However, your landlord or management company might decline prospective assignees or sublettees, which brings us to the next point.
  • Talk to your landlord: Transparency is very important, so you should let your landlord or management company know that you plan on moving the very moment you decide. If you give them as much notice as possible, they will be more willing to cooperate, and you can figure out a solution together. If they agree to find a new renter, you are covered. You can offer to clean and renovate the apartment, or have them keep your security deposit to cover the rent until finding a new tenant. If they are unwilling to cooperate, look for tenants’ associations. These organizations help you better understand your rights and your obligations, and they can help you with the entire process.

RentCafe couple going over contracts and costs for breaking lease

  • Be ready to pay: It’s best to prepare for the worst, as sometimes things get out of your control. If nothing else works, have at least two months’ worth of rent ready, until you figure out what to do. You can offer to keep on paying until the end of the lease or give up your security deposit. Some rental agreements include an opt-out clause, which discusses the fees you have to pay for breaking the lease. Offer to pay off the lease balance over time, as it might save you some money depending on your initial agreement.
  • Talk to a lawyer: This sounds extreme, but if you have a legitimate reason for leaving the apartment and your landlord or management company refuses to help you, you can look for legal advice. If the apartment is uninhabitable or there are problems that you have asked your landlord or management company to fix but they didn’t, you have a case. Make sure to get everything in writing so you have proof. Take pictures and record everything, you never know what may be helpful.

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About the author

Mihaela Buzec

With a love for language and an inquisitive nature, Mihaela found her passion for real estate at RENTCafé. When she is not reading or writing, she enjoys the outdoors, especially hiking and walking through forests.

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