How Much Does It Cost to Break a Lease?

Legal and financial implications of breaking a lease

When you moved into your rental property, you signed a lease agreement with your landlord. In this contract, you agreed to pay rent for a set period of time in exchange for the guaranteed upkeep of a safe, habitable property.

As soon as you signed, you were legally obligated to fulfill your end of the bargain: paying the lease in full. If you break that contract by moving out early, you’ll likely face legal and financial consequences, depending on the situation.

You’ll probably have to pay a fine

Your lease probably states a specific dollar amount that you’ll have to pay in the event you break your lease. This is typically equal to a few months’ rent, though it varies depending on the contract.

Your landlord could sue you

If you can’t afford to pay the cost of breaking your lease, your landlord could take you to small claims court to try and recoup their money. As long as you abide by whatever is set forth in your contract regarding the process of breaking a lease, you should be able to avoid the court system.

Your credit score could drop

If the landlord has to send a debt collector to try and recoup their losses, it could negatively impact your credit score. To avoid this, pay all associated fines and debts before it’s too late.

Your ability to rent in the future could be affected

Future landlords may contact your previous landlords to learn more about who you are as a renter. Breaking a lease in the past could be a red flag that results in the denial of a future rental application.

» READ MORE: What happens if you break a lease?

Understanding your lease agreement

Although lease agreements are typically long and complicated, they’re very important to the rental process because they protect both renters and landlords.

Type of rental agreement

Traditional rental agreements are for a certain period of time (usually 12 months) and must be renewed before the year is up to guarantee the lease for another year. But there are also other types of rental agreements, like month-to-month, short-term, rent-to-own and sublease agreements. Your penalty for breaking a lease could vary depending on the type of lease you sign.

Duties and obligations

The lease agreement outlines the specific duties and obligations of both the landlord and tenant. For example, landlords are legally required to provide a safe and habitable property for their tenants. This requirement includes factors like ensuring running water, access to power, secure windows and doors, and no pests or mold.

If the landlord fails to meet their obligations, you could have a good legal basis for terminating a lease for cause, which means you wouldn’t have to pay any termination fees.

Early termination clause

The contract will also explicitly state what will happen if you break a lease before the contract is up. This is called an early termination clause.

Jonathan Feniak, general counsel at LLC Attorney, a business services company, stresses that this is the most important part of your contract to review when considering breaking your lease.

“An early termination clause is a section in a lease agreement that outlines terms under which the lease could be terminated before the lease period expires,” Feniak said. “Knowing the ins and outs of this clause is essential as it often includes conditions under which an early termination is permitted and any associated fees.”

There are three main ways contracts usually structure the cost of breaking a lease, according to Feniak:

• Early termination fee: Ideally, your contract will outline the terms of an early termination fee, which is typically equal to a few month’s rent.
• Apartment lease buyout: Some contracts may require that you pay the rest of your lease in full. This could add up to a lot of money depending on how many months are left in your contract.
• Lease and security deposit buyout: The worst-case scenario is that your landlord requires you to pay the remainder of your lease and forfeit your entire security deposit. If that’s the case, you could be out of a lot of cash by breaking a lease.

These aren’t the only fees you may have to pay, though. The contract could also require you to cover the cost of cleaning the apartment or the price of advertising to secure a new tenant. Your legal and financial liabilities all depend on your signed contract and what both parties agree to.

Common reasons for breaking a lease

There are many reasons why someone might break a lease. In some cases, these are justifiable in the eyes of the law. In other cases, you’ll still be on the hook for covering the costs outlined in your lease agreement.

Legal reasons for breaking a lease

Here are some reasons that may be considered justifiable depending on the situation and your state’s tenant laws.

• Unlivable conditions or landlord violations: Your landlord is required by law to keep your property relatively safe and habitable. If they violate those rules, like if they won’t fix a broken smoke alarm or a neighbor threatens you and a landlord refuses to evict them, you may be able to break your lease without repercussions.
• Health emergencies or disability: In some cases, state law may cover you if you experience a health emergency that results in a disability or something similar that makes it impossible for you to live in your current rental property.
• Domestic violence or stalking: Depending on the state, you may be protected if you’re a victim of domestic violence, stalking, harassment or assault by someone who lives with or near you. Protections vary from state to state, though, and are not covered federally.
• Change in active military duty status: The Servicemembers Civil Relief Act (SCRA) can help protect you from the costs of breaking a lease due to active deployment or relocation. This act applies to active duty members of the armed forces, including National Guard members, reserve members and eligible family members.

Remember, though, that it's not as easy as just moving out. You’ll typically have to show proof of your conditions and send written notice to your landlord, usually within 30 days of moving. If you simply move without proof or notification, even if your situation is valid, you could still be legally responsible for the fees associated with breaking your lease.

Illegal reasons for breaking a lease

There are also reasons why you may need to break a lease that aren’t justifiable in the eyes of the law. Here are some common examples:

• Relocating for a job. Sometimes, job opportunities will take you to another city or state, causing you to break a lease. In most cases, needing to leave because of a job won’t qualify you for any sort of leniency on paying your termination fees. But, you may be able to negotiate with your new employer to cover some or all of the relocation costs.
• Buying a home or finding a better deal on a rental property. Unfortunately, it’s all about timing when it comes to buying a home or switching to a new property. If the timing doesn’t work out and you still have a few months left on your lease, you’ll need to budget termination fees into the price of moving.
• Changes to your personal situation. Most changes to your home life aren’t considered a legally justifiable reason to break a lease, like if you and your significant other break up or if you lose your job and can’t afford your rental property.

How to lower the costs of breaking a lease

If you fall into one of the unjustifiable categories for breaking a lease, you’ll still have some options to help lower the cost.

Negotiate with your landlord

You may be able to negotiate with your landlord for a reduced early termination fee, or you may be able to avoid a fee entirely if you agree to find someone to take over your lease. Most importantly, know what you’re liable for and what you’re not. That way, you can make a strong and factual argument for breaking your lease.

“Negotiation is about being prepared, presenting the facts clearly, offering solutions, and maintaining a professional and courteous demeanor,” Jonathan Feniak said. “While each situation is unique, showing that you are reasonable and cooperative can often encourage the landlord to reciprocate.”

It can be helpful to provide some possible solutions during negotiation. For instance, you could do some market research in the area to see what the going rates are. If they’re higher than what you’re currently paying, it could incentivize your landlord to let you out of your lease to get a new renter who is willing to pay more.

“I would come prepared to present possible solutions that could lessen the impact on the landlord, such as offering to assist in finding a qualified replacement tenant or being willing to pay a reasonable re-letting fee to cover the landlord's costs of arranging a new tenancy,” Feniak said.

Ultimately, you’re asking for a favor from your landlord, so Feniak advises treating them with kindness.

“In approaching the landlord, it's important to use clear, respectful, and empathetic language,” Feniak said. “I would start by expressing my appreciation for their understanding and the property they have provided. Then, I would explain my situation succinctly but with enough detail to show the necessity of my request.”

Find a lease transfer

If your landlord won’t allow you to break your lease despite your best negotiations, your next best option is to find someone to take over your lease.

Also called a lease takeover or a lease assignment, this is when you sign your full lease over to another individual. Unlike subleasing, where your name stays on the original lease, you’re completely off the hook once the contract is signed with a lease transfer.

Consider subletting

Some landlords prefer a sublease over a lease takeover because it’s less risky knowing you’re still on the lease. With a sublease, a sublessor signs onto your lease, agreeing to cover the cost. But if they fail to pay their portion of the rent, you’re still on the hook as the main tenant.

Not all landlords allow subleasing, so check your contract to see if this is a viable option. If it is, be thoughtful about who you sublease to, as you have to trust them to keep their end of the bargain month over month.

Bottom line

The cost of breaking a lease depends greatly on your situation and whether your reasoning is considered justifiable in the eyes of the law. Unfortunately, if you’re moving out for an unjustifiable reason, you’ll likely have to pay a decent sum of money to break your lease. How much you’ll owe depends on the original lease agreement you signed with your landlord.

While your rental contract is legally binding, you may be able to negotiate with your landlord to remove or reduce the penalty if you help them find a new tenant or subletter. Regardless, it’s important you understand the implications associated with breaking a lease before you make any drastic changes to your living situation.