When you sign a lease for an apartment, you’re signing a legally binding contract. You get a place to live for a set amount of time, and in return, you agree to pay your rent each month. Breaking a lease is breaking a contract, and can end up costing you thousands of dollars in fees and penalties.
However, there are some ways you can minimize the impact of breaking a lease and limit the hit to your finances. How you break a lease can go a long way to making the process easier. These methods can help you come up with solutions that work for both you and your landlord.
How to break a lease
Know your lease terms
Under a standard apartment lease, you are on the hook for the entire contract, even if you move out early. But in many states, the landlord must make a reasonable effort to find a new tenant. In other words, they aren’t allowed to sit idly by and charge you for an empty apartment. (Look up the specifics for your state here.)
When it comes to breaking lease agreements, most owners realize that finding a new tenant is in their best interest. Once you move out, they know they have little power over you to force you to keep paying rent. Instead, many landlords and complexes will offer you different options.
When you first sign the lease, there may be an addendum attached that covers how to break a lease. One of two common scenarios is likely to happen:
Under the first option, the landlord will try to find a new tenant, and you keep making payments until the new person signs a lease. This option works if you live in a high-demand area. If your apartment has a waiting list, you could be responsible for just a few weeks. However, if your complex has vacancies, you could end up paying rent for months.
The other option is for you to pay one or two months’ rent when you move out, and then you are completely clear. This path is good if you want a clean break without the potential for any other issues.
Sublet the apartment
If you need to break your lease and you do not have one of the options mentioned above available, you may still be able to work out a solution.
Review your paperwork and talk to your landlord about subletting. If it is permitted, it can be a good option that works for both of you. In a sublet, you lease out the apartment you are renting to a short-term tenant who pays you directly. The landlord still gets the money he’s owed, but you have the expense covered.
Not all properties allow subletting, so be sure to check before subletting out your unit.
Find a replacement
If your landlord doesn’t let you out of your lease, you may be able to negotiate with him if you find a replacement tenant. By doing the legwork for him and advertising for a new renter, you make the transition seamless and ensure your landlord does not lose any income.
Your landlord is not under any obligation to accept the tenant you found. But by doing the work, you increase the chances of getting out of your lease without having to owe money.
Sacrifice your security deposit
If you are willing to sacrifice your security deposit, that can be a strong negotiating point. If you proactively offer to forfeit the security deposit on file, your landlord may be willing to keep it as a fee for breaking the lease and let you out early.
Give plenty of notice
Many property managers will give you a break if you give them plenty of notice. If you let them know a few months ahead of time that you will be moving out early, that allows them to plan accordingly. They can begin advertising and showing the unit and can get a new tenant quickly.
By giving a heads up, you ensure your landlord doesn’t lose any rental income, and you can figure out how to break a lease without getting burned.
Set up a payment plan
Breaking a lease can leave you owing thousands to your landlord. If your landlord doesn’t come down on what you owe, ask if you can set up a payment plan rather than owe it all at once.
Many landlords will understand that you can’t afford to pay all that money upfront and will be willing to work with you. It increases their chances of getting the money they are owed, so payment plans are a good option.
If you need to end your lease early, communicate with your landlord as soon as you know. If you lost your job, were offered a new position in another city, or are getting married, a landlord is more likely to be sympathetic.
Be direct and upfront about the circumstances around your move. If you’ve been a good tenant and have reliably paid your rent on time, he may be willing to make an exception and tell you how to break a lease without damaging your finances.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
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