Financially Digital - Blog - Should you break your lease?

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Sep272011

Should you break your lease?

Tuesday, September 27, 2011 at 2:25PM

There are many reasons that you might consider breaking your lease on an apartment or home rental. Some of the more common reasons involved getting married or divorced, having to move to another city for your job, or buying a new home. You might also just become fed up with your loud neighbors, crime in the area, or a lack of attention to needed repairs. Unfortunately, the only circumstances in which you might be able to break your lease without penalty include becoming gravely ill or being called to active military service.

However, if you are in the process of buying a new home, then breaking your lease might be the only option for you, unless you want to pay your rent and your mortgage payment until your lease expires. Even if you are able to time your closing well, chances are unlikely that you will close exactly when your lease expires, leaving you some overlap. Here are a few things for you to consider when you start looking to buy a new home while you're still renting:

How Much Will it Cost

Most apartments will allow you to break your lease early -- for a cost. Typically, renters are required to pay a penalty of one or two month's rent, or to pay the monthly rent until a new tenant can be found, whichever comes first. The deposit may also be forfeited. Consider what your maximum costs may be if you have to end the lease early, and calculate those costs into your overall moving expenditures. These costs should be included in your total "move in" expenses for your new home, including your closing costs, deposit, the cost of movers, and other new items.

Find a Subletter

If your apartment manager or landlord will allow it, you can find a temporary tenant to sublet your place for the months that you won't be living there. The subletter can pay your rent, relieving you of financial responsibility, and you can maintain the terms of your lease. Make sure you find a trustworthy subletter who will maintain the remainder of the lease. You may even consider signing a contract of your own with the temporary tenant.

Go Month-to-Month

If you know that you will likely close on a new home before you are able to finish out the terms of a new lease -- typically a year -- consider renting month-to-month instead of renewing. When you rent month-to-month, you do not have a contractual obligation to remain a tenant for any certain amount of time. However, you will still have to give notice when you are ready to move out. You will also have to pay a premium on rent, usually a percentage over market value. Consider the overall cost of the rent increase for the total number of months that you expect to stay before you decide on this option. If the cumulative costs would be more than the penalty for breaking a lease early, then you may be better off renewing for a full term and continuing to pay the lower rent.

Breaking your rental lease is breaking a legal contract. However, when you have decided that it's time to buy your first home, it may be unavoidable to break your lease. Try to give as much notice as possible and negotiate what you can with your landlord. Carefully consider the costs, and try to plan your timing so that your closing is minimally disruptive.

Bio:

Maria Rainier is a freelance writer and recent graduate of Elon University. She is currently a resident blogger at an online schools resource site, where recently she’s been researching different online physical therapy assistant degrees and blogging about student life. In her spare time, she enjoys square-foot gardening, swimming, and avoiding her laptop.

Nunzio Bruno |

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Reader Comments (7)

I think finding a sublet is the hardest unless of course, you have a friend who's really interested in becoming a temporary tenant. Or you have a relative who's willing to pay the remainder of the lease and stay as a tenant.

September 27, 2011 |

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I know - trust and reliability is huge in attempting to sublet

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