We all have moments in our lives where things don’t work according to plan and now steps have to be taken to move ahead. When it comes to housing, you never sign a lease with an intention to break it, but for many, it’s something you’re forced to do because of unforeseen circumstances.
The thought of breaking a lease can seem quite intimidating, especially if you’re by yourself and don’t have a clue about the repercussions. But we’re here to help you out with the process and we hope that through our guide you have a clear idea of what breaking a lease entails and the potential consequences of it.
Before we get into exploring the potential consequences of breaking a lease, let’s first explore various alternatives and get you prepared.
Preparing To Break A Lease
When you’re considering breaking a lease, there are a few things we suggest you look at before you make the decision and go ahead with it. Don’t be impulsive, and even though you might have already put a lot of thought into this, go through the following steps once.
1. Read Through Your Lease
It’s essential that you read through your lease thoroughly because there’ll be ample information available about the terms and conditions that the landlord placed before you decided to sign it. From information about termination to subletting, your lease will have everything you need to know.
Usually, a lease will also have detailed information about the consequences you will face when you break the lease. Most times, you have to pay a fee when you terminate the contract which can be mentioned in your lease. But this isn’t always the case, so read through the lease thoroughly so that when you do contact your landlord, you know your stuff and the communication can go well.
2. Understand If There’s A Legal Way To Break Your Lease
Didn’t think of this? Breaking a lease doesn’t always come with problems and additional expenditure. There are actually multiple reasons under which breaking a lease is considered legal and, in such cases, you won’t be charged a penalty, and these include:
- Your landlord does not comply with maintaining the property as expected which involves following building codes, carrying out major repairs, etc. These laws are different for every state in the country and you can check the same here.
- If you receive a call to active military which involves being deployed for 90 days or more. In this scenario, you will not be penalized for breaking the lease according to protections offered by The Service members Civil Relief Act (SCRA).
- Your spouse dies on active duty, also covered by the Service members Civil Relief Act (SCRA).
- If your lease was illegal or if the apartment you’re renting out is not a legal rental unit.
- Your landlord engages in trespassing on your property or harasses you, but you need to have a proof for the same.
- You have been subject to domestic violence or sexual assault.
3. Find Out If Subletting Is An Option
On multiple occasions subletting is an option that’s taken instead of breaking the lease and it’s something that might be mentioned on the lease itself. It’s much easier and in the process, you don’t incur any kind of monetary losses if the job is done quickly. But it’s necessary that you take the consent of your landlord before you go ahead with subletting your apartment and keep him or her in the loop through the process.
If you’ve decided to sublet/sublease your apartment, we suggest you create a contract based on the subletting laws in your state. You can find information about the same on the Public Legal forum here. Once that’s done, be sure to verify all details of the person you choose to sublet to because in an unlikely scenario that he or she creates any trouble, you’re liable to pay the rent.
Did you know? You can also consider assigning your lease with the consent of your landlord which means that the renter you choose will directly pay rent to your landlord and not you. While this is convenient, it still holds you liable to pay rent in case the renter you choose doesn’t do so.
Also See: Tips For Finding A Subletter
The Potential Consequences Of Breaking A Lease
As you’ve made your decision to break your lease, let’s now take a look at the potential consequences you could face when you do break it. We’re giving you the most likely scenarios and it’s quite possible that you and your landlord might use other ways to work around the termination.
You Might Have To Continue Paying Rent
One of the simplest things you might have to do is continue paying rent till your landlord can find a new tenant. While this is a financial burden, because you’re being forced to pay rent even though you’re not living in the rental space, there are things you can do to speed up the tenant finding process. You can take steps on your own to find a new tenant for your landlord by posting ads around or helping your landlord with showings. Whatever you choose to do in this scenario, don’t forget to consult with your landlord first.
You Might Have To Give Up On Your Security Deposit
Breaking a lease also means dipping into your savings or going through the strains of depleting finances because you’ll most probably be required to pay hefty fees. While paying rent is one thing, you might be required to turn in your security deposit entirely if not partly when you break a lease.
Remember though that this entirely depends on what was first mentioned in your lease which is why we suggested you read your lease thoroughly first. If your lease already states that you will have to turn in your security deposit, then there’s no way you can get out of it. At the same time, if the amount you’re required to pay as a fine is higher than your security deposit, you’ll have to arrange for that too.
Your Credit Score Could Suffer
We all know how important maintaining a good credit score is, especially if you want to continue to rent or buy a house in the future. A good credit score depends on a host of factors but your credit score might take a hit if you don’t cooperate with your landlord and pay your dues or any other termination fee that you’re legally bound to.
This can hurt your credit score and make it difficult for you to rent or find a house in the future, so as we suggested before, try to avoid this as much as possible. Cooperate with your landlord and try your best to fulfill the clauses in your lease.
You Might Get Taken To Court
You knew this point was coming, and it’s something you must consider if your landlord isn’t as cooperative and you have to break your lease no matter what. While this is a rarity, if you are sued, you should be ready for a number of hefty court fees in addition to paying rent till your lease is over. Most times the court also requires that you turn in your security deposit;it barrels into a huge financial strain and one that can cause much trouble.
This is why it’s best to avoid being dragged to court which you can do by cooperating as much as possible with your landlord. Also, try your best to help your landlord if he or she has to find a new renter.
Also Read: Moving Stats and Facts
Steps To Breaking A Lease
While you know what the potential consequences of breaking a lease can be, it’s also essential you know how to go about the process of breaking a lease. If you have the right knowledge about everything, then you can go into the process with much confidence instead of having to figure everything out last minute.
Contact Your Landlord
It is crucial that you contact your landlord first thing if you’ve decided to break your lease because it’s his or her right to be informed. Do this once you’re entirely confident about the decision and be sure to inform the landlord of the potential date that you’re planning to move out on.
While this can be uncomfortable to do and it’s not absolutely necessary, it’s common courtesy to take this step so that your landlord is kept in the loop and can start looking for another renter to plan accordingly. At the same time, this will help you to maintain an amicable relationship with your landlord which is important till everything is sorted out.
Submit An Official‘Notice To Vacate’ Letter
You are required to submit an official ‘notice to vacate’ letter to your landlord or property manager once you’ve spoken to them and made the decision to break the lease. This letter should ideally have the date when you plan to move out and also the reason why you’ve decided to break the lease.
Remember to keep the letter concise and to the point and use terms that are already mentioned in your lease. For this purpose, we suggested that you read and understand your lease well at the beginning itself so that you come across as informed and confident. You can also state what you’re expecting from your landlord with respect to what was already mentioned in the lease. For example, if your lease states that you have to pay two months of rent, you can state that you have knowledge of the same and wish to do the same and part on amicable terms.
Apartment List has a template of the official letter to get you started which you can refer to to pen a concise and well-written notice.
Consider A Tenant Surrender Agreement
Ever heard of this? A tenant surrender agreement is just what it sounds – a written agreement that’s between the landlord and the renter stating that the property is now being surrendered by the renter. It takes away all obligations from both parties since the tenancy is now void and both can move forward amicably.
A tenant surrender agreement is a great way to deal with the early termination of a lease since it does not involve any hassle for both parties and comes with a lot of benefits. When you’re drafting the agreement be sure to include the following points:
- Exact date and time of the property surrender.
- The condition that the apartment/ home is being returned in when you leave.
- A mutual lease of liability stating that both parties have no obligations whatsoever once the property is surrendered.
- How the security deposit will be distributed.
- A covenant that both parties won’t sue each other.
Is Breaking A Lease Bad For Rental History?
Unfortunately, yes, breaking a lease can be quite bad if you’re looking for a new place to rent. The reason is simple – landlords always require rental references and check your security deposit. If you’ve broken your lease before and you were negatively hit, you could be denied a place to rent!
Can I Break My Lease If I Lose My Job?
No, you cannot break your lease legally if you lose your job unless something about it has been mentioned in your lease when you had initially signed it. There are various reasons that count for legally breaking a lease as we’ve mentioned before, and financial hardship is unfortunately not one of them.
See Also: Top Cities for Job Seekers
Is It Better To Break A Lease Or Get Evicted?
It is common knowledge that getting evicted is a better option as compared to breaking a lease because when you break your lease, you’re liable to pay a termination fee which is usually two months of rent. As we’ve mentioned in this article, the other potential consequences of breaking a lease can poke a hole through your pocket which won’t be the case if you’re evicted.
No matter which alternative you go with, whether it be subletting or paying rent till your landlord finds a new renter, the process will go smoothly if you know your lease agreement well. We’ve mentioned this time and again and that’s because it’s important – understand the ins and outs of your agreement and know your rights as a tenant so that you’re not harassed or taken advantage of. In the end, the process can get over quickly if you and your landlord are cooperative and you show a genuine interest to help your landlord. Good luck!
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