I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.
See all posts Frank GogolHow To Get Out of a Lease
Updated on April 10, 2024
Written by
Written by
Reviewed by
Rohit Mittal
Reviewed by
Rohit Mittal
Rohit Mittal is the co-founder and CEO of Stilt. Rohit has extensive experience in credit risk analytics and data science. He spent years building credit risk and fraud models for top U.S. banks. In his current role, he defines the overall business strategy, leads debt and capital fundraising efforts, leads product development, and leads other customer-related aspects for the company. Stilt is backed by Y Combinator and has raised a total of $275M in debt and equity funding to date.
See all posts Rohit MittalAt a Glance
- Valid reasons to break a lease include uninhabitable conditions, landlord’s illegal entry, active military duty, domestic violence, or financial hardship.
- Read the lease, understand penalties, document everything, and communicate with the landlord.
- Conduct a walk-through, seek legal advice, and be aware of exceptions and potential impact on credit.
- Seek help from attorneys or housing agencies to understand your rights as a tenant.
Emergencies that require you to break your lease can happen at any time. But breaking a lease is a complicated legal situation; you should weigh your options properly before making a final call. No matter why you are breaking a lease, understand the consequences and find the best legal solution.
Can Rental Leases Be Broken?
Leases are contractual obligations, so the answer might vary depending on how the lease has been prepared. It could also change depending on your local legislature, various legal reasons, and the state you live in. Whenever you are thinking of terminating a lease, you should first go through your rental agreement to see if there is a clause regarding the conditions of breaking a lease. There might be penalties and legal workarounds for such a clause.
What Happens If You Break a Lease?
You need valid legal grounds to break a lease. Without that, depending on the wording of your lease agreement, you could be required to pay the rent for the remaining notice period of your lease. Your landlord could also take legal action against you, and credit agencies could mark any deviation in your credit report.
Reasons People Break Their Leases
When it comes to breaking leases, you are not alone. Plenty of situations might arise which require you to move out of a property quickly.
The Rental Unit Is Uninhabitable
When you are renting an apartment, the landlord is legally liable for the upkeep of the home. They should ensure that the property maintains all safety and health codes. If there are mitigating circumstances like black mold, issues with running water, or problems with waste disposal, you could have grounds for an uninhabitable property, which might require you to break your lease.
The Landlord Illegally Entered Your Rental Space
When you are renting a property, landlords are not allowed to enter your home without legitimate reasons. Many states also require them to provide a written notice to the tenant before they enter. If you feel your landlord is invading your privacy or entering your home without your consent, you have the right to initiate termination of the lease.
Active Military Duty
If you have been deployed on active military duty, you might need to terminate your lease.
Domestic Violence
Domestic violence victims need to protect themselves and get away from the place where they cohabitate with their aggressor.
Unable to Cover Rent
Even if you love your home, sometimes it could be challenging to pay your rent. Many people have lost their jobs and income due to COVID-19, have large medical bills, or student loan debt, to name a few reasons rent is a burden. You should look into legal options to terminate your lease for the betterment of your financial situation.
How To Get Out of a Lease
It is difficult to be sure that you can get out of a lease early without paying any penalties. These penalties are defined in a standard contract, and it could be more than one month of your rent. This penalty goes towards compensating the landlord for the loss of income. But if you really have to get out of the lease for any of the above reasons, you should look into the lease terms.
Read Your Lease and Document Everything
Don’t be tempted to take hasty actions. Make sure you read the lease correctly. Look for words like sublease, sublet, etc. Understand the conditions if you terminate the lease early; you could be financially liable to pay rent for the remainder of the lease.
Know the local legislature of your state. In some states, landlords cannot ask you to compensate for the rent while also seeking out another tenant who pays rent for the same duration. In some cases, if the new tenant is paying a lower rent than you were paying, you might have to compensate for the difference in the cost. You could also be liable for finding a new tenant or paying the price to find one.
Your lease should also contain information regarding the landlord’s responsibilities. If your landlord is not meeting these responsibilities, you might have a legal way of getting out of the lease without paying any penalties. You should document everything just in case you are considering breaking the lease.
Communicate Thoroughly
Inform your landlord that you want to terminate the lease. Some landlords might be flexible as to the tenant’s schedule and disregard penalties. Understand that terminating a lease early could also put a financial strain on the landlord, so it is your moral duty to help them find another renter.
Get Confirmations in Writing
Whatever conversations you have with your landlord, keep everything in writing. If your landlord has agreed to let you move out of your lease with a small fine, get that clear in writing. If push comes to shove, it will be your word against theirs. This way, you don’t end up in court for collection. If the landlord does not communicate anything in writing, you can still create your own trail by keeping the letters and messages you send.
Don’t Forget the Walk-Through
You might want to get out of your current situation as soon as possible, but remember to give your landlord a walk-through on the day you leave and document it by taking pictures or videos. Your landlord could keep the security deposit if they can prove that you have damaged the property in any way after you terminated your lease.
Don’t Make Assumptions
Don’t assume that just because you are breaking your lease, the landlord is legally allowed to keep your deposit. Seek legal advice to understand the entire process and clear any remaining balance or fees.
Know That There Are Exceptions to the Rules
Even if the lease does not include explicit details regarding situations where you need to move out early, you could have a legitimate reason for wanting to do so. The landlord has to keep the property in a reasonable condition and maintain all the safety conditions. Depending on your state, you should be able to break your lease early if there is a violation of any safety or standard codes.
Get Help
Understand your rights as a tenant by seeking help from attorneys or local housing agencies before you sign any agreement.
Can Breaking a Lease Affect Your Credit?
Getting out of a lease early is unlikely to impact your credit score directly. However, if the landlord has raised collection actions against you for any money you owe on rent, that could decrease your score. Ensure that you have adequately documented all fees and communications to protect your credit.
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Conclusion
In this tumultuous time, any of us can be in a situation that requires terminating our lease early. Just make sure you follow all legal obligations and keep documentation of communications and financials to ensure you are protected against any legal action down the line.
Frank Gogol
I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.