A lease is a legal contract by which rents a property for a specified term and amount. Renters never go into a contract with the intention of breaking it, but life happens, and tenants sometimes find themselves in an unexpected situation and need to move. When something happens that can directly cause an occupant to break a lease, the more knowledge they have, the better off they will be. There are ways to break a lease without paying all the penalty fees.
This guide offers some information on breaking a lease which requires research and negotiation skills. Unfortunately, even with these tips, you could still incur some costs and penalties in the end.
Reasons for breaking a lease
Breaching a binding contract is never a good idea, but sometimes there is no choice when it comes to a residential lease. The only problem is unless what came up is a good enough reason for the landlord to release them of their obligation, they are stuck with the agreement they signed.
Some reasons that are strong enough to break a lease are:
- Military duty
- Hospitalization
- Major injury
- Prison
- Bankruptcy
- Domestic Violence
While these are pretty black and white reasons to relocate unexpectedly, there are also a few more that give a lessee just cause to leave. The only difference is the following grounds fall on the landlord and not the occupant.
The renter has every right to walk out of the lease without penalty when there are mitigating circumstances:
- Residence is unlivable due to noise levels
- There is no fire escape
- Missing or broken windows
- Mold
- Bugs or rodents
- Broken locks due to a landlord not enforcing code or maintaining the unit
If you join the Army, you do not have to pay out the remainder of the lease, though you may have to take care of one or two months' rent. You also have to let your landlord know in advance. If you are injured or very sick (especially if you have to move to an assisted-living facility), some states will allow you to break your lease without penalty. This also applies to some government jobs that may require you to relocate. The government may, in these cases, pay out your lease for you.
Things to consider when breaking a lease
- Read your lease. Are you allowed to give notice and then terminate? You may only need to stay there a little longer before you can legally leave.
- Talk to your landlord. If your landlord has not held up on their end of the contract, how can you be expected to hold to your end? If you can write your landlord a letter detailing the breaches and their dates, you might be off the hook.
- Find something dangerous or not up-to-code in the residence. You would have to notify your landlord and give them enough time to fix it. But, if you really want to get out of there, you could pounce if it doesn't get fixed in enough time.
- There's always court (or the threat of court). If you really feel that you are being taken advantage of, you can ask a lawyer, real estate agent or tenant's rights organization what ways you can get your landlord to let you out of the lease. If you do decide to go up against this person in a legal way, make sure you have some legal backup.
- Negotiate. There may some other way (paying a few months extra rent, for instance) that you and your landlord can reach an agreement. In the best circumstances, the renter will have kept all the rules and paid their rent on time, making the discussion less stressful. A tenant should always remain kind and calm regardless of how rude or anxious the property manger becomes.
Finding a replacement renter until the lease is up
- You can sublet your place to a friend, acquaintance, or anyone looking for a place to live -- provided your landlord is okay with it. This way, the landlord gets the rent that was promised for the term of the lease -- and you don't have to pay for it.
TIP: Remember to be careful, because your name will still be on the lease, so you are ultimately responsible for rent and any damage that the property incurs. Make sure you trust whomever you are allowing to live there.
- Assigning a lease is the next best option for an occupant to free themselves from their contract. By finding someone to take over the indenture until it is up, the renter relieves themselves of any further responsibility or rent due. The landlord does have the right to reject the renter, but this option usually leaves both parties satisfied without much hassle.
- A property manager can refuse a new tenant who may have a bad credit history or insufficient income. However, if that is not the case and there is no rightful reason for rejection, the renter can take the landlord to court and have their negative decision turned over by a housing court judge. If the judge rules in favor of the resident, they are free to go early.
Breaking the lease and paying the penalties
With no just cause, the renter still has a chance to pack up and leave with some dignity. However, it is going to cost them. If an occupant cannot afford to pay the balance of the rent due to avoid legal consequences, they may be able to pay it off over time by making an arrangement with the landlord. Since hiring a lawyer is costly, landlords would rather make direct financial arrangements with the renter.
TIP: If this is the case, the renter should have the oral understanding drawn up into a written agreement. Ideally, the landlord will offer more mercy and simply keep the security deposit, which will in most cases be far less than the rent due, leaving the renter responsibility free from that point on.
Worst case scenario, if the landlord is not willing to negotiate by any of the noted terms, then they have the right to take the renter to small claims court for breach of contract. When this is the case, the judgment will ultimately mar the tenant's credit history, making it hard for them to rent in the future. Even worse, it can cause the occupant's name to be put on a tenant blacklist, keeping them from renting at all.
If you want to terminate your lease, there are quite a few cases where you just simply will not be able to escape a penalty. However, it's always worth it to consider your options and, especially if you have a friendly landlord, just have a conversation about it first.