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Breaking a lease: moving on with minimum damage

Peter Warden
The Mortgage Reports editor

The best of plans…

There’s an easy way to avoid breaking a lease: Don’t sign one in the first place. If there’s a real chance you’re going to have to move during the term of a lease, be a month-to-month tenant instead. The rental agreement for one of those tenancies will give you the flexibility to move on without hassle.

But life’s not like that. Stuff happens — and frequently when you least expect it. What seemed unthinkable last month can be a looming inevitability this.

So what’s your best way of breaking a lease without suffering too many painful financial penalties? Read on to find out.

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Leases and the law

Your first step is to dig out your copy of your lease and read it from beginning to end. You’ll then know what you’re up against.

One thing’s pretty certain: when you signed your lease, you entered a legally binding contract to pay all the rent due during the period it lasts. All of it. And the fact you’re allowed to pay it monthly doesn’t change your obligation at all.

In return for your money, you gain a right to live in the home, subject to the lease’s conditions. However, you don’t have to occupy the property. What you do have to do is pay the rent, whether or not you’re in residence.

Still, in some states, your exposure may be limited by law. And the terms and conditions of any contract can be varied with the consent of both parties. In most cases, the best way to end a lease early is to work with your landlord.

Breaking a lease and the local rental market

How easy it will be to get your landlord to cooperate may largely depend on the local rental market. If you live in an area where there’s a shortage of properties like yours, you stand a good chance of moving on with little or no financial loss.

Related: Rent-to-own homes (lease options)

A new tenant moves in as you move out, and your landlord suffers no break in her income.  She has no reason — and usually no legal basis — to come after you.

However, things may be different if there are loads of properties like yours available locally and few people wanting to rent them. Your landlord might face months during which the home will be empty. That will inevitably hurt her financially and you can hardly blame her for expecting you to make up the shortfall.

A very good (or very bad) relationship helps

If you’ve always paid your rent on time, haven’t caused a nuisance, have complained only proportionately and haven’t damaged the home, your landlord will likely love you. True, she’ll hate to lose you. But she’ll see you as a good person. That’s a great starting point for negotiating your way out of a lease.

Oddly, being a terrible tenant can also help. Your landlord may be as desperate to get rid of you as you are to be gone.

Related: What happens when you break a lease?

Work with your landlord

Whatever the state of your local rental market, you can often reduce your exposure by working with your landlord to find a replacement tenant. You should:

  • Tell her you’ll be moving out the moment you’re certain you will — The longer you both have to find a new tenant, the more likely you’ll succeed
  • Offer to show prospective tenants over the home while you’re still in residence — And use those opportunities to sell, sell, sell
  • Keep the home clean and tidy for showings — It’s in your interests for the place to be as attractive as possible
  • Use your social and professional network to try to find a replacement tenant yourself

Your landlord isn’t obliged to sign a new lease with anyone who can mist a mirror. A replacement tenant will probably have to meet similar criteria to the ones you met when you were accepted. Those may include an income threshold, an acceptable employment history and background and credit checks.

Landlord’s duty to mitigate damages

Some landlords don’t see the point in going to all the effort of finding a replacement tenant when they already have you on the hook for the rent. But, in most states, they have a legal duty to get you off that hook as quickly as is reasonably possible.

Lawyers call this the “landlord’s duty to mitigate damages.” You need to know about the laws and regulations applicable in your state. So it’s just as well legal website NOLO provides links to an overview of those for each state.

Some courts in some states may assume that a tenant breaking a lease should pay one month’s additional rent to cover the time it takes to find a replacement. But they may require the landlord to provide very good reasons why it should take longer.

Of course, avoiding court is in everyone’s interests. So, if finding a replacement tenant is proving tricky, you could try offering to buy yourself out of the lease in exchange for a month’s rent, perhaps using your security deposit. In some circumstances and jurisdictions, you may have to pay considerably more. Be sure to get any such agreement in writing.

Related: Protecting your security deposit

Other grounds for breaking a lease

You may find through those NOLO links other grounds that make breaking a lease possible. For example, you may be able to quit without penalty if you can show your landlord systematically harrassed you, repeatedly violated your privacy or otherwise attempted to “constructively evict” you by making your life unbearable.

You might also have grounds for setting aside the lease if the landlord breached its conditions. You have a reasonable expectation that your home will be safe and habitable.

Perhaps your landlord failed to promptly make urgent repairs to your hot water or heating system. Or he might have ignored a dangerous problem with mold or an infestation of pests.

Expect a “reasonableness” standard to be applied here. Courts don’t expect landlords to conjure up plumbers, electricians and heating engineers in a puff of smoke. And you’ll struggle to make your case if you created a mold or infestation problem yourself, either through design or negligence.

If you’re experiencing problems like these, prepare to prove what’s happened. You’ll need to log events and contacts with dates and to gather photographic and video evidence.

Extreme circumstances

Most states strictly restrict grounds for breaking a lease. But a few allow you to break one in limited personal circumstances. These include relocating for work and a serious sickness in the family that necessitates your move. Even then, you’re likely to have to pay rent for your notice period.

In many more states, you’ll be able to end your lease early if you’re a victim of domestic violence, stalking, harassment or sexual assault. You’ll still have to give written notice and pay rent to cover the next 30 days, but you should be able to move out quickly.

There’s good news if you’re joining the “uniformed services,” which include the armed forces, activated national guard and a few specified federal bodies. A federal law (so applicable in all states) allows you to break a lease upon providing notice. You’ll be free 30 days after your next rent is due.

Keep it civilized

Few tenants try to break a lease on a whim. And few landlords try to obstruct a tenant who has genuine reasons for being unable to stay.

But both parties have their own interests to protect. If you can each put yourself in the other’s shoes, you may be able to avoid the conflict and rancor that sometimes arises in these situations. Play nicely!

Verify your new rate (Jul 17th, 2019)