How To Break An Apartment Lease Without Penalty Legally

How To Break an Apartment Lease Without a Penalty

One of your most important tasks as a tenant is to ensure that you can fulfill the requirements of your lease, particularly the length. Even if you have a month-to-month lease, you must still follow the terms of the lease to avoid penalties such as late fees or voiding your refund. Do you need to break an apartment lease early without a penalty? What happens if you break your lease? Learn how to break an apartment lease without penalty and get on with your life.

Reasons to Break an Apartment Lease Without Paying a Penalty

There are several situations in which you can break your apartment lease early without incurring a penalty.

#1. The rental unit is Illegal.

Unscrupulous property owners or landlords trying to earn fast cash will convert vacant rooms into rental flats unlawfully. If you were unaware that the flat had been improperly transformed into a rental, you have the right to break the lease and receive all or a portion of your deposit back. If you believe you are living in an unlawfully converted rental apartment, look into your state’s housing laws to see where you can get legal help.

#2. Failure to follow local or state housing codes

You are entitled to a safe and habitable living environment. If your apartment does not meet local health and safety requirements, you should definitely break your lease early! Running water and electricity should be available, as well as working plumbing, heat, and sound structures. Any severe issue that could jeopardize your health, safety, or well-being is caused to break your apartment lease without penalty.

The catch is that, unless the situation poses an imminent danger to your person, you must allow time for your landlord to resolve the issue. After sending your landlord a written notification about your problem, you must wait a reasonable period of time for them to address it. If your landlord still refuses to resolve the problem, you can file a legal complaint with the local housing authority.

#3. Infringement on Your Tenant Rights

Any infringement of your tenant rights may also cause you to break your apartment lease without penalty. For example, if your landlord violates your privacy rights by visiting your legally rented apartments without prior notice, you can file a small claims court complaint against them. You can terminate your lease early if you obtain a court judgment indicating that your tenant rights have been violated.

#4. Military Service

If you are an active and full-time duty member of any military branch, the Servicemembers Civil Relief Act (SCRA) allows you to break an apartment lease early without penalty if you are called into service. You must include a copy of your orders with your notification of intent to vacate.

#5. On-Premises Criminal Activity

In many places, a victim of domestic violence or other forms of criminal conduct occurring inside the rental unit can break their apartment lease early without penalty. You must be able to provide proof of the criminal action, such as police reports, medical documents, or court orders.

Possible Penalty for Breaking an Apartment Lease

You may risk a penalty if you violate your apartment lease agreement. And they are not mutually exclusive, so you might have multiple experiences at the same time.

#1. The property owner has the right to sue you.

The property owner may sue you for unpaid rent if your reason for breaking your lease is not protected by state laws or rules governing tenant-property owner relationships. It is more likely to occur if:

  • When the remaining rent balance much surpasses the possible court costs of a suit, you vacate early in your tenancy.
  • The owner is aware of your whereabouts.
  • The owner discovers you have the means to pay the rent if ordered.
  • The rental unit has been unoccupied for some time, and efforts to re-lease it have been futile.
  • If the property owner has dealt with unpleasant renters in the past, they will not hesitate to take you to court if it is worth their time.

Even if the applicable law does not cover your lease-breaking choice, you can nonetheless present a defense. In several states, for example, property owners must demonstrate good faith efforts to re-lease departed apartments. They can’t simply leave a unit empty until the lease expires and then sue the lease-breaker for back rent.

However, if you lack a solid case for breaching your lease, the judge will almost certainly decide in favor of the property owner. If you’ve already left town, it may not be worth your time and money to return and make an appearance. Many evicted renters do not.

#2. You could face a monetary judgment.

A money judgment, also known as a credit judgment, will be issued if a court finds that you are legally compelled to pay the rest of your rent owing. You may be able to avoid long-term credit damage by doing the following:

  • Negotiating a mutually acceptable payment arrangement in court is something you cannot accomplish unless you appear to defend your case.
  • If possible, pay the judgment in full on the spot.

As a result of the National Consumer Assistance Plan, judgments and tax liens no longer appear on consumer credit reports maintained by the three major credit reporting bureaus. As a result, they may not have a direct impact on your credit score.

They are, nonetheless, legally binding. A money judgment in favor of the property owner may allow them to garnish your earnings (up to 25% of your disposable income) and possibly your bank account. If you live in a community property state, your spouse’s assets may also be garnished.

#3. You may be required to deal with debt collectors.

If the property owner decides not to pursue a court judgment to recoup outstanding rent, they might hire a collection agency to recover the debt on their behalf.

Despite the fact that federal law limits the extent to which collection companies can go to collect on debts, collection agencies are generally more aggressive than original lienholders. You’ll know if one takes your case. Furthermore, the collection agency that inherits your lease-breaking obligation may do what the property owner did not: seek a monetary judgment in court.

You should try to avoid debt collection at all costs. It will have a negative influence on your credit score. If you’re concerned that the property owner will hire a collection agency, sign up for TransUnion credit monitoring. Each month, you may also use Credit Karma to check your credit score for free.

#4. Your security deposit may be forfeited.

One of the many reasons you could lose your security deposit is breaking your lease. Even if the owner decides not to sue you, they may seize your deposit, generally in whole.

Most states require one or two months’ rent as a security deposit. Only a few states, like Ohio and New York, have statutory limits on security deposits for non-rent-controlled apartments. Municipalities in such states may impose reduced security deposit limitations.

#5. You might have trouble finding new housing.

Although money judgments for unpaid rent no longer reflect on credit reports, the debts remain, and the landlord is unlikely to forget you breached your lease. That could come back to haunt you while you’re looking for a place to live.

Even if you omit the address where you broke your lease on your rental or mortgage application, a normal background check and property search will reveal it as well as the identity of the property owner. The fact that you left out the problem address is a red flag in and of itself. Consider the conversation that will take place between the owner you stiffed and the owner or mortgage lender of your potential future home.

The evicted landlord may also report the breach of the lease to tenant reporting agencies such as the Landlord Protection Agency. Tenants may have little or no options for removing disparaging and perhaps false material from these loosely controlled resources.

#6. You may have ongoing financial difficulties.

When money is tight and savings are low, any extra housing-related fee may be enough to throw your budget off track. Finding oneself liable for numerous months’ unpaid rent after a property owner obtains a monetary judgment might be disastrous for your finances.

If softer steps such as credit counseling aren’t enough, your best choice may be to declare bankruptcy, a harsh decision that will have a long-term negative impact on your credit.

Mitigating the Financial Consequences of a Lease Breakdown

Even if your lease-breaking action is not covered by state tenant protection laws, these techniques may mitigate its financial impact.

#1. Document Everything

First, document anything that might support your claim if you believe your decision to break your lease is justified by state or local statute. Keep track of:

  • Important Times and Dates: The day you first observed a habitability concern, for example, or the date of a police call to the next-door apartment are both examples.
  • Records of Service or Inspection: Keep track of any events or costs associated with the problem, such as a furnace check that confirmed the need for replacement.
  • Communication with the owner about the problem: Emails, mailed letters, legal notifications, phone call summaries or recordings (if allowed by law), and in-person conversation summaries are all acceptable.

If it comes down to it, you’re significantly less likely to win in court if you don’t have proper documentation.

#2. Inform the property owner of their obligation to mitigate damages.

Most states require rental property owners to make reasonable steps to re-rent vacant units before the lease expires. It’s referred to as a “responsibility to reduce damages” in legalese. Nolo has compiled a detailed list of states that have a duty to reduce losses and where the law is less clear.

If you live in a duty-to-mitigate state, check rental listing sites like Apartments.com, prominent online classifieds sites like Craigslist, and public real estate databases like Zillow to monitor the property owner’s efforts to re-rent the unit you’ve vacated. If they don’t appear to be making reasonable efforts, or if they formally request outstanding rent shortly after you move out, send them a written notice of their responsibility to mitigate.

The warning should direct them to the applicable state statute and succinctly describe its provisions, including the meaning of “reasonable endeavors” and how the steps they’ve taken or failed to take to date fall short of that threshold. Make it clear in your letter that the property owner cannot simply let your lease term end, re-let the space on a new long-term lease, and then sue you for rent.

#3. Find a Subtenant

Even if the property owner has a legal obligation to re-rent the unit, it is best to make your own reasonable efforts to help the process.

Subletting the unit for the remainder of your lease term is one of the simplest ways to resolve a broken lease. Many housing leases clearly prohibit subleasing; however, if yours does not, notify the property owner of your intention to sublet. You can advertise the space on free or low-cost websites that prospective renters in your region frequent, such as Craigslist, Nextdoor, or Roommates.com.

It’s critical that you’re upfront about your desire to sublet. Property owners are understandably apprehensive about subtenants, and at the very least, they will subject yours to the same tenant verification as everyone else. It’s also in your best interests because you’re still liable for the lease and rent even if you sublet.

The ideal subtenant is someone with whom you have a prior relationship and can confidently vouch. I know tenants who have been burned by shady subtenants with whom they had no prior relationship.

#4. Change Your Lease

If you don’t want to be responsible for your lease after you move out, you may be able to transfer it to a new renter. Transferees take legal responsibility for rent owed after the transfer date, absolving the previous tenant, and allowing you to break your lease early with no lingering obligations beyond any legally permissible fines for damage or uncleanliness you committed.

Before putting in the time and effort to find new tenants, make sure your lease is transferrable. If your lease is transferable, the property owner cannot prevent you from doing so, but you may still be subject to a necessary notice period, which is normally 30 to 60 days. If the transfer isn’t explicitly approved, you can request it, but the property owner may have the authority to refuse.

In either scenario, be honest. Many property owners are concerned about lease transfers for the same reasons they are concerned about subleasing arrangements. Anecdotal evidence suggests that owners impede departing tenants’ attempts to transfer leases, even when the lease expressly enables transfers.

#5. Provide as much advance notice as possible

The longer your notice period, the less likely it is that your unit will be unoccupied when you leave. If possible, go beyond your state’s mandated notification period.

#6. Opt for a shorter-term lease.

My landlord’s tolerance was undoubtedly influenced by the fact that the lease I broke was just for six months. And, fortunately for my wife and me, we were able to transfer to a monthly lease shortly before purchasing our first house. We were free and clear at the end of our last month at the apartment.

If you’re about to renew your lease and anticipate moving before the next renewal date, ask the property owner if you can get a renewal term that’s less than a year. Monthly is preferable, but many business owners are unwilling to take that chance. Three to six months is more typical. It should be noted that the property owner is not required to consent to a shorter lease.

#7. Ask for Patience

When everything else fails, appeal to the softer side of the property owner. Most property owners aren’t cartoon villains who only care about boosting their assets’ cash flow. They may be willing to give you a break if you are truly in need.

Go the extra mile before and during move-out to help the owner say yes. Make a concerted effort to recruit alternative tenants — without usurping the property owner’s duty to mitigate — and laud their praises on online tenant forums.

If the landlord is unwilling to pardon outstanding rent, the next best option is to figure out a mutually reasonable repayment arrangement without going to court. If you owe four months’ rent, the landlord may be willing to accept installment payments over the next 12 or 18 months. Finally, the property owner is likely to prefer full or partial payment over time to a large write-off.

Conclusion

If you’re wondering how to break an apartment lease early without paying a penalty, there are options. Exploring your legal options and maintaining open channels of communication with your landlord are the most effective techniques for success.

If you break an apartment lease, make sure to document everything and do everything you can to minimize your losses, protect your credit score, and leave on good terms with your landlord.

How To Break an Apartment Lease Without Penalty FAQs

What happens if I move out before my lease ends?

If you have to leave before the end of your tenancy, your landlord or agent can still force you to pay the rent you owe until the conclusion of your tenure. For example, if you have a 6-month lease and leave after three months, you may be required to pay the remaining three months’ rent.

How can I terminate my lease early?

According to the Consumer Protection Act (the CPA), section 14, you can cancel your existing lease by providing twenty business days’ notice, but this must be done in writing. You will be responsible for your rent until the end of your notice period.

References

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