The Most Commonly Broken Lease Rules: Early Termination
When you sign an apartment lease on the dotted line, you are probably excited and think nothing of complying with the terms of the contract. That said, one of the most commonly broken lease rules is an early termination of the lease.
With so many people moving come Spring, some renters will be breaking their leases (or considering it) to set their sights on a new home. Here are a few things you need to know before breaking a lease. This includes the ramifications of your decision so that you understand what’s outlined in the lease should you decide to terminate early.
Knowing Your Options Before Breaking Your Current Lease
From a landlord’s point of view, the lease represents guaranteed income for the period of time agreed upon. It costs the property each time they need to clean, advertise and vet new tenants. Naturally, when the apartment is empty, the landlord loses out on that valuable monthly earning.
Three Clauses You Need to Understand
Because of this, a lease often contains numerous stipulations about non-compliance, so the first thing you want to do is read it. Below are some of three common clauses to look for in your lease when you are thinking about breaking it. You should, of course, be aware that there may be differences from state to state.
Lease Term: To Renew or Not to Renew?
Each lease spells out both the term (duration) of the lease and the time period the tenant has to advise the landlord he/she does not intend to renew their lease. For instance, if you have to give 3 months advance notice, this means that in April you send in your letter to terminate the lease when it is up in July.
This is not considered breaking the lease and is a date that should be added to your calendar. You can opt to not renew, but you definitely need to keep to the specifics regarding non-renewal or else it is called ‘breaking the lease.’ Why? Usually, if you fail to notify, your lease may be automatically renewed for a specified term such as 2 months.
The Early Termination Option
Leases also spell out the penalty involved in breaking it. Sure, in a perfect world you could end your lease one minute and close on your new house the next. But life isn’t always seamless. To this point, many leases have a clause called ‘Early Termination Option.’
Yours might insist you pay 3-months rent to ‘get-out-early.’ Crunching the numbers, if you pay $1,000 on rent per month, it could cost you $3,000 to terminate your lease ahead of the non-renewal date. Plus, you’ll probably lose your deposit, if you had to leave one. If you’re not sure where this is spelled out in your lease, it’s sometimes under a clause called ‘Rent Default Termination Damages.’
Penalty: Paying the Consequences
Aside from the financial costs of breaking a lease, you should keep in mind that since a lease is a legally binding agreement, your landlord could take civil action to recover any money that you owe. If you are ordered to pay a debt, this credit judgment could stay on your credit report for seven years. Moreover, any unfavorable data on you may follow you as you try to rent elsewhere, so tread with caution.
How Can You Break A Lease Without Penalty?
Sometimes it is possible to break the lease without incurring any costs or penalty, though these are ‘special circumstances’ and may not apply in your situation.
- Unlivable Conditions: Your landlord has to abide by the contract too and this generally means they keep up their end of the bargain in terms of providing running water, heat, and a safe, healthy environment. So, if there is an acute mold condition or you can show that your radiators are broken, this could help you exit early.That said, documentation is your friend. You should definitely record all communications and keep track of your paper/email trail. Then, if the landlord takes you to court, you have some evidence rather than just one person’s word against the other.
- Sublet: Sometimes finding a new tenant could help you leave early (without breaking the lease), but you have to go through the right channels. Not every landlord permits their tenants to sublet. However, if you are allowed and can find a suitable tenant, unless they legally take over the lease, you are still on the hook for it. In other words, if they break it, you might have to pay for it.
- Allowable Circumstances: A lease might have a clause that allows a tenant to break it in the case of situations such as military leave, job loss, medical issues, job transfer, and/or divorce. Check your fine print to see what these ‘allowable’ scenarios are.However, this doesn’t mean you do not have to follow certain protocol. For instance, in Philadelphia, if you are part of ‘uniformed services’ you must give your landlord notice of intent to vacate for military reasons. Once you mail or deliver your notice to the landlord, your tenancy will terminate 30 days after the date that rent is next due, even if that date is several months before your lease expires.
- Harassment: Some states, like Pennsylvania, don’t have a state law that specifies the amount of notice your landlord must give you to enter rental property. However, your lease may set out boundaries, such as that your landlord has to provide 24-hour notice if they want to access your apartment.If you are in the shower and your landlord just keeps showing up, this could be construed as a violation of privacy and could justify your decision to break your lease. Check out Landlord-Tenant Law in your state to see what you have recourse to do.
- Talking it Over: Don’t expect to have a conversation where you tell your side of the story and all goes well. That said, you may be able to negotiate with your landlord, and if he/she is sympathetic, you may be able to agree to an early termination without penalty.You may also be able to settle on terms to pay your balance owed over time which could give you some cash flow, no red marks on your credit score, and really nothing lost on the part of the landlord.A property manager you have a rapport with may see that if you leave early, they can jack the rent up with a new tenant and earn more over time. Or, they may just have a heart and know you can’t pay your mortgage and rent without going belly up and so make an exception to the rules. If you don’t shoot, you don’t score, but relying on your property manager’s sympathy isn’t something to always bank on.
Playing by the Rules
Just remember your lease carries other clauses which you presumably agreed to. These might be community-oriented (e.g., no smoking or no minors in the fitness room) or tenant-focused (e.g. no dark colors on the walls or max number of occupants per premises). Being a good tenant and playing by the rules may put you in better stead with your landlord should you ultimately need to break your lease for some unforeseen reason.