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It's possible to break a lease early, but there are many things you should consider before you terminate your lease agreement.
If you rent, you probably signed a lease that commits you to pay rent for a specific period of time. It's always possible to break a lease commitment, but you may face negative consequences for doing so. After all, leases are contracts between you and the property owner. When you sign, you promise to uphold your end of the bargain.
Here's what you need to know about breaking a lease.
Legally Justifiable Reasons for Breaking a Lease Early
Though a lease is a legal document, you may be able to break it without facing penalties. However, it still isn't something you should do lightly, or without fully understanding the drawbacks—it's often wise to consult a lawyer or get help from local experts. Depending on the state you live in, you may be able to turn in your keys before the lease expires with few (if any) ramifications for the following reasons:
1. The Home Is Not Habitable
It's the landlord's responsibility to maintain the property to a certain standard and according to the terms of the agreement. In most jurisdictions, residential leases include an implied warranty of habitability. That means your home should be functional, with things like working gas, heating, electricity, plumbing and intact roofs.
2. The Landlord Invades Your Privacy
Your landlord is not permitted to enter your rental space (whether you're present or not) without proper notice, good reason or your permission. You may obtain a court order to stop the landlord, and if that order is violated with continued unlawful entries, you can give notice that you will terminate the lease.
3. Your Home Is Not as Peaceful as It Should Be
If you moved into the home with the expectation that it would be safe and quiet, you may have the right to leave prematurely if it isn't. In fact, this clause may be embedded in your lease. A breach of the peace can include excessive phone calls and visits from your landlord, constant dog barking, excessively loud neighbors, and unnecessary remodeling or maintenance work that takes longer than the landlord proposed.
4. You're Entering Active Military Service
The Servicemembers Civil Relief Act grants you the right to terminate the lease at any time if you signed the lease before entering military service. If you concluded the lease agreement after entering the military, you're bound by the same rules as a civilian—unless you receive military orders for a permanent change of station or to deploy for 90 days or more.
5. You're Being Harassed or Are Otherwise in Danger
In many states, you can break a lease early if you are a victim of domestic violence. States may also permit people to terminate a lease and leave due to sexual assault, stalking or harassment. The circumstances which allow you to do this vary, so make sure you understand the local landlord-tenant laws before proceeding.
6. There's a Built-in Termination Clause
Check the paperwork you signed. It's possible that the lease included the ability to leave early under conditions specified by the lessor. For example, a tenant may be able to pay an early termination fee (usually two months' rent) and get out of the deal.
Laws regarding tenancy differ depending on your jurisdiction. So be sure to research your state and local government codes to find specific information on rules for both tenants and landlords where you live.
What Happens if I Break a Lease Early?
If you break your lease for a reason that isn't legally protected, the consequences can be severe. Be prepared for potential fallout if you're reneging on your lease agreement. Ramifications include:
Being Taken to Court
Your landlord could pursue what is owed in a court of law. If you lose the case, a judgment may be awarded to the landlord, which can include the rent you didn't pay as well as associated court costs. The money you owe could possibly be taken out of your paycheck with a wage garnishment order.
Debt Collection Action
Instead of suing you, your lessor may choose to simply turn the debt over to a third-party collector, which will pursue you for the amount owed. If you still refuse to pay, a debt collector can also take you to court and sue you for the money.
Losing Your Security Deposit After Breaking a Lease
The amount you put down as a security deposit can be substantial, and usually equals one month's rent. Even if you kept the place immaculate, the renter may claim the deposit and apply the funds to the amount you owe.
Most landlords ask for a letter of recommendation from your most recent landlord, and that person will have no reason to give you a glowing review if you walked out on the lease. That can jeopardize not just your future tenancy, but if you have people depending on you such as children or a partner, it puts them at risk too.
Tips for Responsibly Breaking a Lease
If you want to break a lease early, you'll need to be prepared. Follow these tips to maximize your chances of success.
1. Organize Yourself and Collect Your Papers
Before you even start the process, collect all relevant paperwork in one place. This includes detailed records of all agreements and financial arrangements. If you can't find your rental contract, ask your landlord for a copy. Collect all your rental receipts if you've paid cash or ask your landlord for a proof of rent payment letter.
2. Read Your Lease Carefully
It's very important you carefully read the initial lease agreement before attempting to terminate your agreement. You might find a clause that allows you to leave your rental space without facing collections, owing too much of a fee, or facing legal consequences. Sometimes, you can break a lease early because the agreement isn't written properly or lacks necessary details.
3. Get Information and Legal Help
Look for a rent board or tenants' rights organization in your area that can help you look over your rental contract and navigate the early termination process. Also, check local laws to see if there are circumstances in which you can prematurely break the lease without repercussions.
4. Talk to Your Landlord
It may simply be best to talk to whoever manages your unit. They may agree to let you out of the lease early without much persuasion.
5. Find a New Tenant
It might help to find and present an acceptable new tenant who can move in as soon as you move out. The lessor would still screen the applicant, but it can help to smooth things over. Since the apartment won't be sitting empty while they attempt to find a tenant themselves, they may be more willing to let you break your lease.
6. Consider Subletting before Breaking the Lease
Another idea is to sublet to someone else who will pay the rent for the months for which you're obligated. However, not all landlords accept this arrangement, and subletting isn't legal always and everywhere, so proceed with caution. The Tenant Resource Center offers great help if you think about subletting your apartment.
7. Expect the Worst
If your landlord doesn't budge and you have no legal recourse, get ready to pay what you may owe. The landlord is usually allowed to continue charging you rent until the lease expires or a new tenant is secured.
What Does Breaking a Lease Do to Your Credit?
Most landlords do not report rent payments to the credit reporting bureaus because rent is not a debt or a type of credit. If that's the case for you, breaking a lease won't automatically affect your credit report.
However, if the landlord does turn over a balance due to a debt collection agency, that company can—and usually will—send the account to the credit reporting bureaus. When this happens, the balance owed will end up on your consumer credit reports and negatively affect your scores. It will remain there for up to seven years, and anyone who views your reports will see the derogatory account.
A collection account is a clear indication that you did not fulfill your end of a financial bargain, so it will be factored into your credit scores too. Because payment history is the most important credit scoring factor, your credit scores could decline when the debt collection account appears.
Additionally, a broken lease agreement can appear on a document called a tenant screening report. This is separate from your credit report and contains an overview of your tenancy history. Landlords can furnish information to tenant screening reports, listing your payment pattern and any other relevant information for future renters to review. If you broke your lease without just cause, it can show up as a major red flag. When it does, you can have trouble securing a new place to live.
Experian Helps You With Your Credit Report
As a tenant, you'll want to keep your credit report clean. A collection agency debt that's derived from breaking a lease early will not just be a problem when seeking a new home to rent, but it will affect your ability to obtain a loan or credit card with excellent terms.
Check your credit report from Experian often. It's free and a great way to keep track of what is being reported about you. The next landlord will almost certainly read it and you'll want all the data to shine.