What happens if you break a lease?

How to break your lease

You may need to break your lease due to a job transfer, military deployment, loud neighbors or other reasons. Before you take action, however, read your lease agreement carefully. It should include an early termination clause outlining the steps you’ll need to take to end your lease term and details about the consequences or penalties for breaking it.

For instance, the lease agreement may state that you must notify your landlord in writing of your intentions to move out, typically with at least 30 to 60 days’ prior notice. When given proper notice, landlords may be more willing to negotiate the early termination fees with you.

Communication is key

A good move is to give your landlord as much notice as possible. If they have time to find a tenant to replace you, they might not hold you liable for any missed rent due to a vacancy.

Also, the sooner you make them aware of your move-out date, the sooner they can find a new tenant to occupy the residence. This may help you avoid having to pay other fees, like advertising or administration costs. You can also help your landlord find a new tenant so there’s little to no vacancy time, which could mean avoiding early termination fees.

You might also consider consulting with a real estate attorney before giving notice in certain situations. They can offer legal advice that may save you money in fees.

As David Suny, managing partner at McCormack Suny in Boston, Massachusetts, explained to ConsumerAffairs, “If you think the landlord will have difficulty in finding a replacement tenant, he/she is more likely to try to collect unpaid rent from you and challenge the reason you are breaking the lease.”

Potential consequences of breaking a lease

A lease agreement is a legal contract in which the terms are agreed upon and signed by both the tenant and the landlord. An important aspect of the agreement is the lease term. If you decide to move out early and break your lease, there may be both legal and financial consequences.

Early release fees

As outlined in the early termination clause, you may be liable to pay certain fees if you break your lease. These fees can include future rent (two months’ rent, for example, or rent due based on the remaining months of the lease), turnover expenses (like cleaning costs) and any advertising costs for finding another tenant. The landlord may also be able to keep all or part of your security deposit to pay for all or a portion of these expenses.

The fees you have to pay may depend on the state you’re in, and they could become due immediately upon breaking your lease. Suny advised consulting with an attorney before paying any fees if your lease includes an accelerated rent clause, an item that allows landlords to demand immediate payment of remaining rent owed if you break your lease.

“Some states have laws that make this an unenforceable penalty for any lease (whether residential or commercial) and require a later accounting to assess the landlord’s actual damages over the life of the lease. Other states permit this clause to be enforced,” Suny said in an email.

Potential lawsuits

Another possibility is that your landlord could sue you for damages resulting from breaking a lease. A lawsuit can be time-consuming and financially draining, so you’ll want to keep the lines of communication open with your landlord to avoid one if you can. However, if the total fees are more than you can pay, an attorney may be able to help you negotiate reduced charges with your landlord.

Credit score impacts

Breaking your lease by itself may not impact your credit score. However, when you don’t pay the early termination fees you are liable to pay, your landlord may resort to hiring a collections agency to get payment. If you don’t pay them, the agency may report the unpaid debt as a collections account to the credit bureaus, which can stay on your credit report for up to seven years.

Having debt in collections can serve as a red flag to future creditors and potential landlords, showing that you may not have been responsible with your past financial obligations. In fact, most landlords request authorization to pull your credit report on the lease application. In addition, even if you pay off and close a collections account, it’s still visible on your credit report for several years.

Ability to rent in the future

Breaking a lease could affect your ability to rent in the future, especially if you didn’t give proper notice and didn’t pay the early termination fees. Potential landlords or mortgage companies (if you’re trying to buy a property) may ask for a reference from a previous landlord to process your application.

In a reference check, landlords can ask questions like, “Was rent paid on time?” and “Would you rent to this tenant again?” This is why it’s critical to communicate your plans to the landlord and try not to burn any bridges when you leave so they may give you a good recommendation in the future.

Tips to ending a lease early

To help you navigate the process of ending your lease early, consider the following tips:

• Review your lease for an early termination clause. Take note of the specific requirements.
• Consider seeking legal advice to help you understand the terms of the lease agreement.
• Provide written notice to your landlord.
• Assist your landlord in finding another tenant. Ask friends, family or co-workers if they may be interested in renting your place and connect potential tenants with your landlord to complete a rental application.
• Consider finding a subleaser if your landlord allows it. Be sure you understand your state laws regarding subletting your place, though. For example, if the subleaser fails to make rental payments, you might still be liable for the rent.

Early termination clause

The early termination clause allows both the tenant and the landlord to end the lease early before the term ends. It provides the conditions and procedures for the lease to be legally terminated. The clause can be found in the leasing agreement and may include multiple subsections explaining the conditions.

When it’s legally OK to break your lease

In some cases, you can break your lease legally without penalty. However, even in these instances, keep in mind that you may still be responsible for the next month’s rent payment. The lease termination may not become effective for 30 days or more, depending on when you give your landlord written notice.

Some legal reasons for breaking a lease include required military service, domestic violence issues or a violation of tenants’ rights.

Military service

Federal law, specifically The Servicemembers Civil Relief Act of 2003, states that active-duty military personnel should not incur damages from terminating a lease early under certain circumstances. Some of the requirements include deployments over 90 days and entering into the lease before the active service period.

Cases of domestic violence, harassment or stalking

State laws protect victims of domestic violence, sexual harassment or stalking from the financial penalties of breaking a lease. You may need to provide your landlord with documentation, like the protection order, and give a 30-day written notice.

Violation of tenants’ rights

Tenants have a legal right to live in a safe environment. Landlords are responsible for maintaining the premises and adhering to building codes for safety. For example, they must provide working smoke alarms and operable heating systems. The landlord should also fix maintenance issues within a reasonable time frame.

Suny explained that if you need to break your lease due to unsafe or uninhabitable conditions, you should consider calling the local authorities (e.g., the building inspector or the department of health). “They may investigate the issues you raised and hold the landlord responsible, taking the pressure off of you to prove your case,” he said. Their report may also be useful if a lawsuit occurs.

Bottom line

While it may not be ideal, at some point, you may need to break your lease. Certain reasons are legally protected, like if you’re a victim of domestic violence or an active-duty service member who has deployment orders. In those cases, the landlord must release you from further financial obligations.

However, if you’re in a situation that is not legally protected, you may want to consult with an attorney about potential fees for breaking your lease. Communication with your landlord about your situation and helping them find a new tenant may also be key to avoiding significant penalties.