How to Break a Lease

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Updated on Thursday, March 29, 2018

iStock

Moving out before your lease ends might be a smart idea, or even necessary, for a number of reasons. Maybe you need to relocate for a new job, decide to move in with a significant other or even find cheaper rent or a better location before your rental period is up.

How can you break a lease successfully, and with as little hassle as possible? The process can be stressful, and cost hundreds or even thousands of dollars, at its worst.

Open and honest communication and negotiation with your landlord will make the undertaking smoother and more pleasant for all parties. In this guide, we’ll explain the process of breaking a lease, potential missteps and ways to actually move forward with a new address.

What happens if I break my lease?

When considering breaking a lease, it’s important to understand what you agreed to in the first place. If you signed a yearlong lease, you agree to paying the full amount of rent for that year, though you may pay in monthly installments.

“That is a commitment to pay the full rent due under the lease, whether you occupy the space or not,” said David Frazer, an attorney who practices tenant law in New York City.

If you want to get out of your lease before the full term is up, you’ll likely need to do some negotiating. The consequences of breaking a lease vary by state, county and individual landlord. Before you do anything, it’s a good idea to review your state’s landlord-tenant laws and regulations.

How to break a lease

Step 1: Read your lease

Some leases contain an early termination clause that stipulates the fee that will be expected from a tenant who wants to break the lease.

A common early termination fee is two months’ rent, says Lucas Hall, a landlord and the head of industry relations at Cozy, a Portland, Ore.-based property management company that operates in 50 states and Puerto Rico. The early termination clause might also specify how much notice the tenant must give the landlord, such as 60 days’ notice.

Bigger and more sophisticated property management companies tend to more likely include a clause in their leases, says Monique Rad-Stein, an attorney in Los Angeles who practices tenant law.

Smaller operations or individual landlords who operate more informally might not have such a clause in their leases, leaving more room for negotiation, both Rad-Stein and Frazer say.

Step 2: Negotiate with your landlord

The most important part of breaking a lease is to talk directly and honestly with your landlord, experts say.

If your lease doesn’t spell out terms for early termination, you can negotiate those terms with your landlord. For example, Frazer says, a landlord may ask a tenant to pay an additional month’s rent and surrender the security deposit in order to break the lease. That option gives the landlord two months to fill the property without losing money.

Any agreement between tenant and landlord should be finalized in writing.

“It goes without saying that any deal that is made has to be reduced to writing and signed by the landlord,” Frazer said. “An oral promise to let somebody out of the lease is completely unenforceable.”

Step 3: Suggest solutions

Tenants will get better results by working with the landlord to find common ground.

Hall describes a recent example: A tenant’s lease was expiring at the end of the month, but she wanted to move out at the beginning of the month. The tenant asked if she could show the apartment herself to find a new tenant before the month’s end and receive back her prorated monthly rent.

Hall agreed, giving the tenant a chance to reduce her losses — a win-win. If a tenant can suggest a solution that will make things easier on the landlord, he or she will be much more likely to agree to the deal, Hall says.

“If they go into it with a little bit of humility and some solutions to try to make it better, then they might actually be able to break their lease and not have to pay anything,” Hall said.

Step 4: Keep open lines of communication

Remember that landlords are people, too. You’ll get the best results by communicating honestly — and early — with your landlord. Tenants should give at least 60 days’ notice when ending a lease, but the more notice they can give, the better, Hall says.

“Be open and honest with your landlord, because often times the landlord wants to try to find a good solution just as much as you do,” Hall said. “The whole system starts to break down when people don’t communicate with each other.”

Email is usually the best form of communication, Hall says. Having a paper trail ensures everyone is on the same page. If a tenant calls to discuss breaking a lease, it can catch the landlord off guard, provoking a response that may seem rash or unthoughtful. Communicating in writing increases the chances of a landlord working to help the tenant, Hall says.

Tenants should also be flexible when the landlord is showing their apartment, understanding that the landlord will likely need to show the property before the tenant has moved out. Refusing showings makes the landlord’s job more difficult, potentially hindering cooperation.

“Anything you can do to help ensure that the landlord’s not going to lose money on the deal is just another reason for the landlord to let you do it,” Hall said.

He says some tenants shouldn’t assume their landlord will deny a request to sublet or end a lease early. Some may find their landlord even more agreeable than expected.

Rad-Stein says it’s important to understand the landlord’s point of view and keep a cool head when discussing move-out dates and other details.

“It’s very easy in these circumstances … to make it a very personal fight,” Rad-Stein said. “But ultimately it just comes down to numbers.”

Dealing with consequences

If you communicate openly, there should be no surprises, which is ultimately the best scenario for all involved. But if things go sour, there are a number of consequences for tenants who break their leases, some of them with long-lasting impact.

Depending on your lease terms and negotiation process, tenants can expect to incur at least some expenses when breaking a lease. The landlord will likely require a fee upfront or an extra month’s rent, in addition to retaining the security deposit.

Abandonment

If a tenant moves out without giving notice and stops paying rent, it’s known legally as abandonment. In these cases, Hall says the landlord will assume possession of the property and try to rent it out again, but the previous tenant is still responsible for rent owed.

Some states, such as California, require landlords to mitigate damages to the tenant, meaning they have a responsibility to re-rent the apartment rather than leave it vacant (which would rack up the money owed by the former tenant). As soon as the new tenant begins paying rent, the former tenant stops being responsible for the lost rent.

In New York, by case law, the landlord does not have the same duty to mitigate damages, Frazer says.

“A landlord at its option could sit back and do nothing, and not attempt to re-rent the apartment, and hold the current tenant liable for the full term of the lease,” Frazer said.

This is unlikely, however, as it’s easier for landlords to collect rent from someone who is living in their property.

To recover rent from a tenant who abandoned a property, landlords will often deduct the money from the security deposit or take the tenant to small claims court, Hall says. This means the tenant could end up with a court judgment on record, which can negatively impact the tenant’s financial record and credit standing.

In some cases, the landlord will approach the tenant’s employer to garnish their wages, Hall says, making for an uncomfortable situation at work.

Credit repercussions

If a landlord takes a tenant to court and gets a judgment against the tenant, it will be reported to a credit reporting agency, Frazer says, likely damaging the tenant’s credit rating.

Some landlords themselves subscribe to credit reporting agencies (Experian, Equifax and TransUnion are the three major ones), and can report a tenant as “delinquent on a debt,” independent of legal action, Frazer says. The impact on credit is difficult to estimate, though.

“So it could impact your credit rating even if you’re not sued,” he said. “Whether it goes down 10 points or 50 points, I really can’t say, but it’s simply a risk the tenant takes.”

Minimize the consequences

Just as some landlords are required to mitigate damages, you can minimize the consequences in a couple of key ways.

If a tenant is breaking a lease because they’re relocating for a job, Frazer says, the tenant’s new employer may cover the remaining amount on a lease — though this is rare.

You also can put work into finding a new tenant, with the following steps.

Alternatives to breaking a lease

If you want to move out early without breaking your lease, a few solutions offer an alternative to more costly consequences.

Subletting

While there are no laws against subletting, a lease will usually specify whether or not subletting is permitted. In the case of subletting, Hall says, the tenant is vouching for the sublease tenant. The subletter will pay rent to the tenant, who pays the landlord, meaning the tenant is still on the hook for the full rent amount.

Assignment

Similar to subletting, a tenant may assign the lease to another person. In this arrangement, the lease itself is transferred over to a new person, and the former tenant holds no further responsibility for the property. It’s a clean break.

“Assignment is clearly better for the tenant, because they can walk away very quickly without losing anything,” Hall said.

Assignment can work out better for the landlord as well, Hall says, since having fewer people involved makes the arrangement less complicated. Plus, the new tenant will sign a one-year lease rather than taking over the existing lease. The landlord may charge the former tenant a fee of several hundred dollars to assign the property, Hall says.

Delay moving plans

In some cases, moving out early is more of a preference than a requirement. If your moving plans are flexible and your landlord is not, it may be best to delay until your lease is up. It may simply not be worth the hassle of negotiating a lease end agreement or finding a new tenant to take over.

Each case will vary, and tenants can use their judgment in deciding how is best to proceed given your personal circumstances.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Do you have a question?