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How to Break a Lease Without a Penalty

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September 7, 2021
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As a renter, one of your biggest responsibilities is making sure that you are able to fulfill the terms of your lease, particularly when it comes to the length. Even if you’re going by month-to-month leases, you still need to abide by the terms of the lease to avoid incurring penalties such as late fees or voiding your refund.

However, life throws you a curveball every now and again, and you might find yourself needing to break the lease early. There are a myriad of reasons why you might need to terminate your lease prematurely -- maybe your job requires you to move to another city, or maybe you need to move back home to be with family, or maybe the rental unit isn’t what you were expecting.

No matter your reasons, keep in mind that a lease is a legally binding contract, and at the very least, you will have some trouble trying to break that contract early. Some of the possible consequences of breaking the lease early without cause include penalties, voiding your deposit, or even getting sued in civil court. At the very least, you’re going to experience tremendous stress because you’ll have to give your landlord a good reason for terminating the lease early.

If you find yourself in this situation, here is our guide to help you navigate through the process and (hopefully) avoid potential losses.

The Early Termination Clause

The best-case scenario for you is if your current lease has an early termination clause. Most standard leases will have a clause that will allow you to break the lease early under special circumstances. Most often, these circumstances are life-changing or drastic, such as the death of your significant other or a divorce.

That being said, having early termination clauses in your contract doesn’t necessarily mean that you are completely free from any consequences of breaking your lease early. You might encounter additional stipulations such as:

  • Rent-responsible - you will still be responsible for paying the rent until the landlord finds a suitable replacement tenant for the unit.
  • Buy-out - you will incur additional fees or agree to void your deposit if you move forward with breaking the lease early.

Furthermore, you will still need to give an official notice of intent to vacate to your landlord. Make sure that you are submitting the notice in accordance with your state’s requirements. In New York, for example, tenants are required to give at least 30 days notice to vacate before they move out of the apartment.

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Is Breaking the Lease Early Truly Worth It?

If you’re thinking about breaking your lease early, you probably have your reasons. However, you should pause and consider whether they are worth the possible negative consequences that you might incur.

Possible Consequences of Terminating Your Lease Early

Fines

As mentioned earlier, the mildest consequence that you would likely face is getting slapped with hefty fees. These can range from an amount specified in the lease or forfeiting your deposit. And, yes, these fines *are* deliberately painful to discourage people from terminating their lease early.

Litigation

Your worst-case scenario is if your landlord decides to file a lawsuit against you for breach of contract. Your case will be heard in civil court, and if the judge decides that you terminated your lease illegally, you will need to pay off the lease balance.

Negatively Affecting Your Credit Score

In case a lawsuit is filed against you and you lose, you will not only need to pay off the lease balance, but your credit score might also get affected as well. This type of credit hit can stay on your record for up to seven years, and make future financial transactions difficult.

Difficulty Renting in the Future

You might get a reputation for being an unreliable tenant (regardless of your reason for breaking the lease), and you will have difficulty renting in the future. You will not be able to use your landlord as a reference for future rental applications.

Five Legal Reasons to Break a Lease Without a Penalty

Now that you know the possible consequences of breaking your lease early without reasonable cause, it’s time for some good news: there are some instances when you can break your lease early without triggering a penalty.

The rental unit is illegal

Unscrupulous property owners or landlords looking to make a quick buck will illegally convert empty rooms into rental units. If you were not aware that the unit was illegally converted into a rental, you can break the lease and even get all or a portion of your deposit back. If you feel that you are living in an illegally converted rental unit, check the housing laws in your state to find out where you can get legal assistance.

Noncompliance with local or state housing codes

You deserve a safe and habitable place to live. If your apartment does not comply with local health and safety codes, that is a surefire reason to break your lease early! The property should have running water and electricity, working plumbing, heat, and sound structures. Any major issue that can threaten your health, safety, or well-being is grounds to terminate your lease without penalty.

Here’s the catch: unless the situation poses ian mminent danger to your person, you will need to give time for your landlord to solve the problem. After sending your landlord a written notice about your issue, you will need to wait a reasonable amount of time so that they have a chance to fix it. If your landlord still fails to solve the issue, you can contact the local housing authorities and file a legal complaint.

Violation of Your Tenant Rights

Any violation of your tenant rights can also be ground for terminating your lease without penalty. For example, if your landlord violates your privacy rights by entering your legally rented apartments without prior notice, you can file a legal complaint against them in small claims court. Once you get a court order stating that your tenant rights have been violated, you can move ahead with early termination of your lease.

Military Service

If you are an active and full-time duty member of any military branch, you are legally allowed to break a lease early without penalty under the Servicemembers Civil Relief Act (SCRA) if you are called into service. You must send a notice of intent to vacate along with a copy of your orders.

Criminal Activity on the Premises

In many states, a victim of domestic violence or other forms of criminal activity happening inside the rental unit can break their lease early without penalty. You must be able to prove that the criminal activity is happening, either through police reports, medical records, or court orders.

What If You Can’t Terminate the Lease Early without Penalty?

If after everything is said and done and you still can’t find a way to get out of the lease without incurring a penalty, you can still try to mitigate your losses. If your landlord is not willing to break the lease early and is threatening to file a lawsuit, you can offer your deposit as compensation for their lost income. That way, you can at least avoid getting a mark on your credit report.

You can also consider subletting your unit, especially if you offer to find the new tenant. Many landlords will jump at the chance to find a new tenant without having to go through the hassle of vetting applicants.

Final Thoughts

Breaking a lease early can be daunting, especially if you’re in a vulnerable position. There are times when you just need to bear down, explain your situation to the landlord, and hope for the best. While it might not always work, there’s no harm in trying to appeal to your landlord’s human side.

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