A tenant moves into a rental property, often signing a lease agreement to live in the rental for one year. What happens if the tenant has to move out before the lease term is up? Learn how much it costs to break a lease.
What Is the Reason You Are Breaking the Lease?
A lease agreement is a binding contract between a landlord and a tenant. By signing the lease, the tenant has agreed to live in the rental for the duration of the contract.
Relocating for a Job
Loss of a Job
Purchasing a Home
Disliking Rental Property Location
Most situations do not qualify as legal reasons to break a lease. These include:
- Relocating for a Job
- Loss of a Job
- Purchasing a Home
- Getting Married
- Disliking Rental Property Location
While most situations do not qualify as legal reasons to break a lease, there are certain specific reasons you can break a lease early without penalty. These include:
- Landlord Failing to Maintain Property
- Landlord Illegally Enters Apartment or Harasses Tenant
- Active Duty Military Change of Station Orders
- Victims of Domestic Violence
- Illegal Apartments
Is There an Early Termination Clause in Your Lease?
Some landlord will include an early termination clause in their lease agreement. This clause allows a tenant to terminate the lease early if they follow the early termination rules. The tenant will have to give proper written notice and pay a fee.
- Written Notice: The clause will specify how much written notice the tenant must give the landlord to end a lease early. The required notice is generally between 30 and 60 days’ of desired move out.
- Early Termination Fee: The clause will state how much the tenant must pay to end their lease early. The tenant will usually have to pay the landlord the equivalent of two months’ rent if they want to end their lease early, but this amount could be higher or lower based on the specific lease clause between landlord and tenant.
If the tenant follows both of these requirements, the landlord will allow the tenant to end their lease early without any further penalty.
How Much Will You Have to Pay?
There is no standard amount a tenant must pay if they break a lease agreement early. It will depend on the lease agreement, the landlord and state law. The following are four scenarios of what you might have to pay.
- Early Termination Fee: If your lease has an early termination clause, you will be responsible for paying the amount in this clause. For example, two month’s rent.
- Rent for Remaining Months of Lease Plus Security Deposit: If you end your lease early, you still have an obligation for the remaining rent owed on the lease agreement. If you have four months left on your lease and your rent is $1,000, then you would be responsible for paying $4,000. You may also forfeit your right to the return of your security deposit.
- Rent Until Landlord Finds New Renter: Most states require a landlord to actively look for a new renter. You would be responsible for paying rent for the remainder of your lease term or until the new tenant’s lease begins, whichever is sooner.
- Landlord Could Take You to Court: If you terminate a lease early, your landlord could take you to court. If the landlord wins, you will likely have to pay rent for any months remaining on the lease, forfeit your security deposit and could be responsible for damages, court costs, and attorney’s fees.
Does a Landlord Have to Look for a New Renter?
Most states require a landlord to look for a new renter if the current renter ends their lease agreement early. Some states will also require the tenant to help find a new renter.
- Sublease: If you or the landlord find someone to sublease the rental, the new tenant will take over your lease for the remainder of the agreement. You could, therefore, be held responsible for any damage they cause or other lease violations. You will not receive any security deposit money owed to you until the end of your original lease term.
- Re-Rent: A landlord may sign a new lease agreement with a renter. Once this agreement is signed, you will have no further obligation to pay rent to the landlord, unless the new renter pays a lower monthly rent than your original lease.
What If the New Renter Pays Less Rent?
Even if a landlord is able to find a new renter, you may not be off the hook yet. If the new renter’s monthly rent is less than your old rent, you may be responsible for paying the difference until your original lease agreement ends.
For example, you had three months remaining on your lease agreement, with a monthly rent of $1,200. A landlord finds a new tenant, but the new tenant is only paying $1,000 a month. You would then be responsible for paying the landlord the difference of $200 for the remaining three months, which would equal $600.
Will It Affect Your Credit?
Breaking a lease early can affect your credit if the landlord takes you to court. If the landlord is awarded a judgment against you, it will show up on your credit report. Not only will it negatively affect your credit, any future landlord who runs a credit check on you will be able to see this information and it can impact your ability to rent an apartment in the future. Therefore, breaking a lease could affect you monetarily, but can also impact your future quality of life.