What happens when you break a lease?

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You need to move before your lease is up. The idea itself may make you break out in a cold sweat. You’ve always heard that it is a terrible idea to break a lease, but why?

Is it expensive? Does it affect your credit? What if you have a good reason?

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Keep reading to find out all about what happens when you break a lease. The consequences might not be as dire as you first thought.

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How Do Leases Work?

a sign that says rent

Leases can be long-term or short-term. Year-long and 6-month leases are common, but some can run for several years and others can be month-to-month. Sometimes a lease will start out for a year and then turn into month-to-month at the end of that year.

Even if the lease is month-to-month, your landlord will still require notice when you want to move. Usually, you have to alert them at least 30 days before your next payment is due. In other words, you usually can’t give notice for partial months. 

What happens if you need to leave your lease early? This will depend on the terms of your lease.

Make Sure You Read the Lease

First up is to find out what your lease says. There are general guidelines that most leases follow, but they are not all exactly the same. 

To find out what happens when you break your lease, look for the “lease termination” or “early release” section. Some leases may state this is not possible, but even so, you may have options. 

Related: House Hacking: Live for free with an Airbnb Investment Property

Potential Consequences of Breaking a Lease

With prices going up leasing can get very expensive. Here’s an infographic showing renting prices skyrocketing.

Let’s look at some common consequences that you could face for breaking a lease early.

Fines

Most commonly, breaking a lease will cost you money. When you break a lease, the landlord loses money, so most contracts are set up so that you take the financial hit rather than them.

Some leases contain a set fee you have to pay to break the lease. In many cases, this fee is quite expensive to deter you from breaking it. Plus, the fee makes it worth it for the landlord if you decide to break your lease anyway. The fee you pay will cover their expenses to find a new tenant and make up for any lost income.

In other cases, you may have to agree to continue to pay rent until a new tenant is found. The landlord is also obligated to make a reasonable attempt to find a new tenant, but it could still take a month or two, or even longer.

A Lawsuit

By breaking a lease, you’re breaking a legal contract. This means that the landlord has the right to bring a lawsuit against you if you don’t handle things well.

Most of the time, this doesn’t happen, especially if you’ve been a good tenant. Your landlord typically won’t want to waste time in court any more than you do.

The best way to ensure that this doesn’t happen is to abide by your contract and follow whatever the landlord is willing to agree to allow you to do.

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Trouble Renting Anew

Many landlords will call up your previous landlords to get an idea of your track record. Discovering that you’ve broken a lease makes them wary of renting to you. They don’t want you to do the same thing to them. 

This is where good communication with your landlord can make a difference. Explain your situation. Get on their good side. Then when a potential new landlord calls up, they’ll have only good things to say about you.

A Credit Hit

It’s also possible that your credit score could take a hit if you break your lease. However, this usually happens in cases where the tenant doesn’t pay the required fees. Then those fees become an unpaid debt that can be sent to collections and appears on your report.

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Break a Lease with No Consequences

a plate breaking

There are a few instances when you can break a lease and not be held responsible in the eyes of the law. These include:

Active Military Members

All states have laws that allow tenants to get out of their lease if they enter military service or are deployed before the lease ends. As soon as the tenant receives word of their deployment, they are to give notice to the landlord along with a copy of the orders. 

Month-to-month leases then end 30 days after the next rent payment is due. Longer leases end on the last day of the month after the month in which you give notice. For example, if you give notice on April 14th, your lease will end on the last day of May.

Domestic Violence Victim

Not all states recognize being a domestic violence victim as a legal reason to break your lease, but many do. You usually have to provide at least 30 days’ notice and something that proves you’ve been a victim of domestic violence within the last 3 to 6 months. A protective order or something of the like will do. 

Breach of Quiet Enjoyment

Landlords have the duty to ensure that you have a peaceful, safe place to live, known as “quiet enjoyment.”

Many landlord behaviors can be considered breaching the tenant’s quiet enjoyment. These include:

  • Entering the premises without warning
  • Allowing illegal activity (or engaging in it) on the premises
  • Not addressing the poor or dangerous behavior of other tenants under the landlord’s control

Of course, what constitutes a breach of quiet enjoyment is subjective. For that reason, you shouldn’t just break your lease citing this as your reason. Consult with an attorney first to see if you genuinely have a case and learn how to proceed legally.

Constructive Eviction

The law also gives tenants the right to livable housing. In legal terms, this is called the implied warranty of habitability. Basically, the landlord is responsible for providing a decent place to live. Standards include:

  • A structurally sound building
  • Functioning electrical, plumbing, heating, and other systems 
  • Addressing known environmental hazards (mold, asbestos, lead paint dust, etc.)
  • Addressing rodent or insect infestations

Though the list of what it covers differs, almost all states give tenants this implied warranty of habitability. Landlords cannot ask you to waive these rights or put anything in the lease contract negating any part of this. Even if they do, and you sign it, that piece of paper will not be legally recognized.

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If the landlord fails to fulfill this duty, they have in essence “evicted” you. They cannot force you to live in a subpar home. You can then break your lease and claim constructive eviction.

Again, don’t do this on a whim. Talk to an attorney first, not only do the laws differ from state to state, but the conditions for constructive eviction can also be subjective. For example, you cannot see one rat and claim that the unit is infested with rodents, and you must leave immediately.

Ask Nicely

Asking nicely isn’t a legally recognized method of getting out of your lease, but it can be effective and is worth the try. Particularly if you have been a good tenant, your landlord may be willing to work with you if you need to break your lease.

Conversely, if you’ve been a horrible tenant, your landlord might be thrilled to get rid of you, but let’s hope that’s not the case. 

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How to Get on the Landlord’s Good Side

There are a few tricks you can use to get on your landlord’s good side and make them more willing to work with you. Let’s look at a few tips here.

Give Notice

As soon as you know that you need to move, notify your landlord. Giving them a couple of months’ notice is far more helpful than only a couple of weeks.

Pay for Advertising/Find a New Tenant

Additionally, you can offer to help fill your place. It’s not always easy to find a new tenant, and advertising is one of the costs the landlord can incur. Being proactive and taking that task off their plate will make them more willing to work with you.

Plus, remember that we mentioned you might have to pay rent until a new tenant is found? Offering to help find a new tenant ultimately is good for you too. Marketing your apartment will probably be far cheaper than paying rent for a couple of months or more.

Clean the Property

Give the property a deep clean and keep it picked up and clutter-free. It will be easier for the landlord to find a new tenant if they have a nice-looking property to show.

On top of that, be willing to allow the landlord to show the apartment while you’re still there. With luck, you can time your move-out date with a new tenant’s move-in date, and you won’t have to pay much extra.

Related: How much does it cost to build a house?

A Home of Your Own

Now you know what happens when you break a lease. At the very least, you’ll have to pay your landlord’s expenses for finding a new tenant. In other cases, you’ll have to pay the rent for the remainder of your contract.

Regardless, it is all money down the drain. In fact, renting is always money down the drain. You’re helping somebody else pay off their mortgage rather than working on paying off your own.

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Renting is nice for when you know, you’ll be moving around a bit. But nothing beats having a home of your own. When it’s time to leave, you get to sell it and recoup some of those monthly expenses. With a rental, you’ll get your deposit back if you’re lucky. If you have to break your lease, you could be on the hook for a lot more money.

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