When you sign a lease agreement, you enter into a legally binding contract and commit to paying rent for the entire duration specified in the lease. But what happens if you need to terminate your lease early?
The process of breaking your lease can be complicated, tricky, and costly. But there are steps you can take to do so responsibly and minimize potential repercussions.
Although breaking a lease early is not ideal, some circumstances demand it. No matter the reason you need to leave, it is possible to do so and we’ll tell you how to do it so you can minimize penalties and potentially avoid fees wherever possible.
Common reasons to break a lease
Under the warranty of habitability, your landlord is legally required to provide you with a safe living environment. If your rental unit lacks basic necessities for comfortable living such as functioning plumbing, heating, or has mold, you may want to look for another apartment.
A sudden loss of income, like losing your job, can make it difficult to meet your monthly rent obligations. In these situations, breaking your lease may be the only viable option to avoid falling into further financial distress, accumulating debt or even risking eviction.
Relocation for work
Perhaps you’ve been offered a job out of state which requires you to move. While it may be a tough decision to leave your current living situation prematurely, seizing a promising job offer to advance your career and pursue new opportunities is not an uncommon reason for tenants to break their lease.
There are several major life events or personal reasons why a tenant might need to break their lease early. Maybe the rental doesn’t meet your expectations, you don’t like your landlord or neighbors, or you’re having problems with roommates. Tenants may also choose to move out if their family is growing, or if their relationship status changes. The list goes on.
Legal grounds for penalty-free lease termination
Laws and regulations regarding leases can vary from state-to-state as well as by city. However, if you need to terminate your lease early, these exceptions can get you out of your current living situation penalty free.
Breach of housing codes
When a landlord fails to uphold required housing code standards, it jeopardizes your safety and well-being. Inadequate electrical systems or faulty wiring, for example, could lead to electrical fires. Likewise, insufficient ventilation in a bathroom can create a breeding ground for mold and mildew, damaging your respiratory health. And pest infestations not only degrade the living conditions but can also contribute to health concerns.
Tenant rights infringement
Are you constantly reporting essential maintenance or safety issues to your landlord only to have your requests ignored? When your landlord disregards their obligations to provide essential services like hot water or neglects critical safety concerns such as broken windows, it constitutes a violation of your tenant rights. In cases like these, you have every right to terminate your lease early.
Breach of privacy rights
Your landlord isn’t allowed to come into your apartment whenever they want. In fact, they are required to provide at least 24 to 42 hours notice and must have a valid reason for entering. If they routinely cross the line, you may have legitimate grounds to break your lease agreement.
Military service protections
According to the Servicemembers Civil Relief Act, individuals serving in the military are entitled to terminate their lease if they need to report for active duty during their lease period. If you paid rent in advance, the landlord must prorate and refund the unearned portion. If a security deposit was required when you moved in, it must also be returned to you at the end of your lease.
While you are entitled to break the lease early, you must provide the following to your landlord to initiate the process:
- A written notice outlining your intention to vacate due to military orders
- Supporting documentation including a copy of your official military orders
- Payment of rent for the current month in which you submit your notice
- Payment of rent for the subsequent month
According to the National Coalition Against Domestic Violence more than 10 million people a year become victims of domestic violence. In situations where staying until the end of your lease is unsafe for tenants subjected to abuse, most states have laws that enable you to get out of the situation quickly. But you’ll need to provide at least 30 days notice. To avoid penalties, your landlord may require proof such as a protection of abuse order or a police report.
Criminal activity on premises
Statistics state that homes and apartment complexes are reported to be the number one location for violent crimes. Rentals can be particularly dangerous because people live in close proximity, turnover rates are common, and there isn’t much control over who enters the property.
If you’re stuck in a dangerous living situation, providing proof of criminal activity like drug dealings, a violent crime, or other illegal activities can get you out of your lease. Additionally, if you’re the victim of a crime on the property, you may have legal grounds to terminate your lease early. Either way, it's important to carefully review local laws and regulations, as well as the terms of your lease agreement, so you can exercise your rights as a tenant.
Penalties for breaking a lease early
If you do break your lease early, you may be subject to various penalties including:
Loss of security deposit
Don’t be surprised if your landlord retains all or a portion of your security deposit once you break your lease. Leaving your apartment on short notice can be a financial burden for your landlord, especially if they can’t find a replacement tenant quickly. Your landlord may need to hold onto the extra money not only as a form of financial protection, but to also cover any expenses for repairs or damages.
Remaining rent obligations and legal fees
In the worst case scenario, your landlord may decide to take legal action against you and file a civil lawsuit to ensure you pay off the lease balance. And if you end up in court, it can come with some costly consequences. If the court rules in favor of your landlord, you may have to pay the remaining rent for the duration of the lease term in addition to any associated legal fees. In certain circumstances, your renters insurance may cover the cost. Additionally, if the judge ends up issuing an order, this will show up as a public record and all future landlord’s will see this on your record.
Terminating your lease early can cost you up to three months’ rent. So before you start packing up, consider if you have the financial means to move forward with the legal process and if the consequences are worth it.
Marks on your credit and rental history
If you break your lease, it could impact your financial standing and rental history. Your landlord can report late payments to the credit bureaus or get a collection agency involved to recoup their losses. Not only can it result in a negative mark on your credit report and cause your credit score to dip, it can also make it more challenging to secure loans, credit cards, or obtain a mortgage down the line.
Obstacles securing future rentals
When you leave your apartment, it can take your landlord weeks or even months to find a new tenant. If word gets around and other landlords find out you have a record of breaking your lease, it can make it hard for them to trust that you won’t do it again. Even if you break a lease just once, it can set off a red flag for future landlords.
Steps to get out of a lease early and penalty-free
1. Review the lease
Thoroughly review your lease agreement for any provisions related to early termination, including potential fees and requirements. The lease terms give you
a clear picture of what you can and can’t do, and some leases include an early termination clause that outlines the process and associated costs.
2. Negotiate with the landlord
When you discuss your intentions to break the lease, be open and honest with your landlord. Telling them as soon as possible will give both you and your landlord time to explore potential solutions, such as finding a replacement tenant. If you can’t find a replacement tenant, consider offering to cover the costs of finding a new tenant. Relinquishing your security deposit is another amicable gesture that may help you reach a mutually agreeable resolution. Alternatively, if your landlord won’t budge, you may want to negotiate for a lower monthly rate for the remainder of your lease.
3. Research legal options
If negotiations with the landlord prove challenging, seek legal advice to explore your rights and options for a penalty-free termination. Professional counsel can help you navigate the process but be sure you are prepared with documentation of all communications to serve as support or evidence of any disputes or legal proceedings.
4. Consider subletting
Assuming your lease permits you to sublet your apartment, it’s worth having the conversation with your landlord to see if they are open to this option. However, finding a suitable subtenant who meets your landlord's criteria comes with its own challenges. The subtenant must have a good credit score, be financially reliable, undergo a background check, and demonstrate that they can responsibly meet your landlord’s expectations.
Strategically breaking your lease can save you in the long-run
At the end of the day, your landlord wants to collect rent and fill open vacancies as quickly as possible. In certain circumstances, breaking your lease is the only option available to you but it doesn’t have to be a contentious process for you or your landlord. By following the suggested steps we’ve outlined above, you can avoid burning bridges and make the process as smooth as possible.