Consequences of Breaking a Lease

For whatsoever reason, you’ve decided to move out, indicating you’d like to terminate your lease. When you sign a lease for an apartment or house, you agree to certain terms and conditions. One of those terms is that you will not break the lease agreement. If you do break the lease, some consequences can follow. This article will discuss some of those consequences. Such as:

  1. You’ll have to pay for the remainder of your contract, which is usually at least six months or more.
  2. Breaking a lease will negatively affect your credit score because you’re late on payments.
  3. The landlord may refuse to rent another place to you in the future if they think that you’re unreliable or irresponsible with money.
  4. If you break your lease, there’s no guarantee that any rental property will accept someone with bad credit history as an applicant.
  5. You’ll lose out on important security deposit protections

Breaking a lease can be expensive, and it can affect you in ways that might not seem evident until it’s too late. It is best to read any contract carefully before signing it, so there are no surprises later. Let’s dig deeper into it.

How to Break a Lease

There comes the point in many renters’ lives when circumstances change, and they wish to terminate their lease early. It might be due to a job shift or an unpleasant rooming situation, among other things, but it doesn’t matter why someone wants to relocate; whether it’s because of a job change or any other reason, relocating before your rental contract expires is a significant financial risk. 

Before contacting your landlord, read your signed rental agreement carefully for provisions regarding early lease termination. If you’re moving to a different city or state, this could be very difficult for you to do. Some landlords are somewhat flexible regarding early lease termination, but there may be strict penalties if your contract says nothing about it. Again, before taking action, read the contents of your rental agreement carefully.

Suppose there are no such options available in your contract, then do not panic! Contact your landlord and explain your situation. You can read our article on How to tell your Landlord about your Move to make your work more easy.

Don’t just vanish without notifying them. If you do that, you could end up with bad credit ratings.

Some landlords may charge an early termination fee, and others might not care about your situation as long as you return your keys on time. Many landlords will let you know if there are any penalties; some will not. It is up to you to get this information.

There are several other legal ways based on which you can break your lease, such as if you are an active member of the military and received a transfer notice or if you are a victim of domestic violence within the last 6 months, or if the landlord itself breaches the lease agreement and so on. Then you can break your lease without any problems.

Consequences of Breaking a Lease

Breaking a lease is serious business and can have several consequences for renters. The first consequence of breaking a lease that must be mentioned is something that all renters should already be aware of: If you break your lease, you will be liable for the remainder of the contract. This usually equates to an additional six months or more on top of your original agreement and is very costly.

You may be subject to several ramifications if you terminate your lease early. They’re not mutually exclusive, which means you could get hit with several problems at the same time. A few of them are discussed below.

House Owner Can Take Legal Actions On You

When you break your lease based on a justification not covered by state landlord-tenant legislation or rules, the property owner may sue you for unpaid rent. Even if you think you’re in the right legally, it’s best to avoid this situation if at all possible.

If your reason for breaking the lease is not covered by state legislation, then the property owner has every legal right to file a lawsuit against you. A court can force you to pay for damages or back rent and even put you in jail if necessary. The House Owners can take legal action on you if the outstanding rent amount far exceeds the potential court costs of a lawsuit, you depart early in your tenancy, the owner knows that you have the means to pay your rent if required, or the rental home has been empty for some time and attempts to re-let it have proved fruitless.

House Owner May Sue You For Damages

Another consequence of breaking a lease is that the property owner may put you on the hook for any damages caused by your departure early. If you had to use some of their tools or furniture during your stay, these are technically their property, and they have every right to expect them back in good order. Tenants who break their leases may also be required to pay for any decorating or cleaning services that must be performed because of the early move-out.

House Owner May Keep Your Deposit

If you are breaking a lease before time, there are chances that you might lose all your security deposits. The owner will make an effort to show your place and fill it with new tenants to get the best possible return on the deposit.

If this is not done, you might be held responsible for paying back that money when you vacate. In some cases, you might also have to lose your entire deposit as a penalty for early termination.

If you do end up losing all or part of your security deposits, it is an irrecoverable loss, and you should never agree to it. It does not mean that the landlord can get away with anything they want if you break your lease contract.

There are also chances that the landlord might keep some of your items if you do not take them before you vacate. This is known as the landlord’s lien, and again, it is an irrecoverable loss.

If you are leaving early under any circumstances, read your lease carefully to see what the penalty might be. 

You may even want to consult a lawyer or tenant’s rights group to ensure that no one is taking advantage of you. It doesn’t hurt to have this information ahead of time to prepare financially for it. Go through our Article on Rights and Obligations of Landlord and Tenant.

It Can Cause You Financial Difficulties

Breaking a lease has several consequences, and facing financial difficulties is one of them. If you lose, you may be ordered to pay additional punitive damages or be required to reimburse the property owner for any money they spent attempting to collect from you. If a court rules you’re legally obligated to pay the balance of your rent due, you’ll also have to pay court costs associated with filing the suit.

In every one of the aforementioned cases, the renter will forfeit a large sum of money.

Broken Lease Can Affect Your Credit Score

Leasing a home or apartment is a big deal, and breaking a lease has consequences that go beyond financial difficulty. If you break your lease, landlords can report you to credit agencies without going through proper channels.

When you break a lease without giving the correct amount of notice, it goes on your credit report as an eviction or unfinished rental contract. This can make it very difficult to procure new rentals when looking for housing in the future. In many cases, a bad credit score from this one incident can make it impossible to get approved for the lease on a new place.

If you are thinking about breaking your lease for any reason, try to talk with your landlord first. If they’re reasonable, you may be able to work out a solution that fits your needs and ensures your credit score remains intact.

You May be Required to deal With the Debt Collector

If the property owner doesn’t want to spend time and money seeking a court judgment to recoup past due rent, they can hire a collection agency to get the money for them. You’ll then be able to interact with an agency that specializes in credit and debt issues and often can add fees and penalties.

Though federal law limits the lengths to which they can go to collect on debts, collection agencies are generally more aggressive than original lienholders. Their goal is to collect as much money as possible on the debt by whatever means they can.

At all costs, you should avoid debt collection. It will have a significant negative impact on your credit score and lead to further financial problems.

Avoiding the Collection Agency

It’s easier said than done, but you should do everything in your power to avoid a debt collection agency altogether. If you land on their list, you’ll want to negotiate payment as quickly as possible and work out a payback plan that fits your budget and doesn’t include significant penalties.

It’s important to pay attention to the agency’s specific policies and recommendations. Every company is different, so you’ll need to do your homework before attempting to contact them directly with an offer. Otherwise, you risk making it even worse for yourself than it already is.

It May be Difficult to Rent Another Place or Get Mortgages in the Future

One disturbing consequence of breaking a lease is making it difficult to rent another place. If you have had several rental history gaps, prospective landlords may not be willing to take a chance on you.

Though it may vary from state to state, landlords are often required by law to provide a detailed account of all their obligations and any defaults before they place an advertisement.

Additionally, many landlords use tenant background screening services to screen potential renters. If your history contains unresolved rental issues such as this one, the property owner may not look favorably on your request to rent again in the future.

On top of that, lenders may take a negative view of your rental history and decide not to offer you mortgages or other home loans when you attempt to get new financing.

Consult with a lawyer

As a tenant, you must follow certain regulations while breaking your lease contract. If you break any provisions of this agreement, it is advisable to consult with an attorney who will help you get out of the situation while minimizing losses for you.

Regardless of why or how you are breaking your lease, you should be conscious of the possible consequences and prepared to deal with them. A loss of money or time is always better than a bad credit score or criminal charges.

Conclusion

Breaking a lease can have significant consequences, both financial and non-financial. It is important to be aware of these consequences before deciding to break your lease agreement. If you’re unable to meet your obligations under the lease, it’s best to negotiate with your landlord or lienholder to come up with a payment plan that works for everyone involved.

Once you know everything that could go wrong and have made your decision, it’s time to take the necessary steps to complete the process. Ensure that you have copies of your lease agreement, all recent rent payments, contact information for neighbors and staff members at the rental office. It will also be helpful to have proof of your efforts to make amends with the landlord or lienholder before moving out.

Frequently Asked Questions

What are the implications of breaking a lease?

There are several implications of breaking a lease, such as financial penalties, lost security deposits, damage charges, and termination of future rental prospects.

How can I get out of my lease early?

If you want to get out of a lease early, there are multiple options available, such as subletting the property or packing up and moving out. You can also negotiate with your landlord or lienholder to pay for your early termination of a lease agreement.

How are sublets different from subleases?

A sublease is an arrangement where you rent a property from somebody else who already has a contract for that specific property. This means that you will be responsible for any damage caused to the property while subletting. On the other hand, a sublet is when you rent a property from another tenant who already has a lease agreement with the landlord.

What can I do if my landlord breaches my contract?

If your landlord breaches the conditions of the lease, you may pursue legal action against them in court. Because the lease is a two-party agreement (the leaseholder and the landlord), any courts can pursue any breaches.

Also See: Giving your Landlord Move Out Notice before your Move | Best Out of State Moving Companies in the US | How to Renew a Rental Lease?

Written by


Rostislav Shetman is the founder of 9Kilo Moving. He has been in the moving and relocation industry for more than 25 years, making him an expert in his field. Rostislav started as a helper, dispatcher and driver and has worked his way up to owning his own company. He takes great pride in his work and enjoys helping people relocate across the United States of America. When he's not working, Rostislav enjoys spending time with his family and friends. They are the light of his life and bring him happiness every day.