Introduction-
A lease agreement is a contract between a landlord and a tenant that outlines the tenant’s right to occupy the landlord’s property for a set length of time, both parties are legally bound by this leasing agreement. The agreement specifies the parameters of the expectations between the landlord and the tenant, such as the rent, rules for residence, lease period, and so on. The lease agreement is signed after both parties have a consensus on the terms and conditions revolving around the lease. In this article, we will see about ‘How Much Does It Cost To Break A Lease?’.
How Much Does It Cost To Break A Lease?
Although there are many advantages to renting a property rather than buying, moving out on your wish is definitely not one of them. Almost all the lease contracts have the clause to provide the landlord with at least one month’s notice before shifting out. When the tenant intends to break the lease before the expiry of the lease, then they may need to negotiate some arrangements with the landlord in order to avoid paying exorbitant costs. The cost of breaking a lease will be determined largely by the tenant’s conditions and the landlord’s flexibility.
- The cost for breaking the lease might differ because of various aspects like how early are you terminating the lease? what are the local laws governing the lease agreement? etc.
- The terms regarding early termination are generally mentioned in the lease agreement, if not then you may have to pay a specific fee to the landlord, however, this can be negotiable.
- In some cases, the landlord may ask for rent of 1-2 months as an early termination charge.
- It is important to note that regardless of the fact that the tenant pays the termination fee, most lease agreements still require a 30 days-notice before breaking the lease.
The Following are a Few Situations Regarding the Cost for Breaking the Lease Agreement:
- To Pay till New Tenant is Found- There might be a situation where the landlord asks you to continue paying the rent until a new tenant takes over the place, if your lease agreement expires before new tenants are found then you can discontinue paying rent. There are some states which requires the landlord to find the new tenants however, if you find a potential tenant before the landlord then you can make an offer to the landlord stop paying rent.
- Paying the entire Lease- The Landlord can ask for the entire lease money which means that you have to pay the entire rent amount of the remaining time period of the lease agreement altogether. However, if you pay the whole lease and the next tenant takes over the place then the landlord will credit back the rent from that month.
Ways to Reduce the Cost for Breaking the Lease-
- It is possible to reduce the cost of breaking the lease, you might even get away without paying a single penny, this is possible when you find a new tenant to move in immediately after you plan to leave, by doing so the landlord might waive the penalty for early termination or at least reduce the penalty fee.
- Another way to reduce the cost is by subletting the place to someone else, policy for subletting is usually mentioned in the lease agreement, However, if subletting is not permissible you can always negotiate with the landlord regarding your situation and reduce the cost.
- It is important to note that whenever a new arrangement like subletting is made, it is always wise to formalize the agreement so that this arrangement is legally binding on both the parties.
- Some states allow the tenants to break the lease without any termination fee to be paid to the landlord if the landlord fails to maintain the property. Hence if you are facing issues with maintenance of the property or habitability standards, which might affect your health or safety, you would be exempted from paying any kind of penalty for breaking the lease contract.
- If the unit or property is illegal then you will not have to pay anything for breaking the lease, in fact, in many states, if this is the situation then the landlord might have to refund some of the rent to the tenant.
- If the local law provides that an early termination clause is illegal in a lease agreement then you can easily get away without paying any termination fee for breaking the lease agreement.
Conclusion-
Now we have learnt ‘How Much Does It Cost To Break A Lease?’, Laws regarding the lease agreement and termination of lease agreement dramatically vary from place to place, It is recommended to check the local laws before paying any kind of termination fee to the landlord. It is also recommended to negotiate with the landlord for cutting costs and make sure you include the termination clause in the lease agreement and discuss its flexibility before entering into a legally binding contract.
Frequently Asked Questions-
- Are Lease agreement and Rental agreement the same?
Answer. No, lease agreement and rental agreement are not the same completely.
