What Happens If You Break A Lease: Everything You Need to Know Before You Sign

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When you get into a lease, you’re in a legally binding agreement with a landlord, and breaking it may have consequences. Especially in big cities, the penalty you might have to pay might be bigger since rents are higher. But what happens when you break a lease? 

First off – what is a lease?

A lease is an agreement between a tenant and a landlord. In such an agreement, as a tenant, you signify that you will pay a specified amount of money in exchange for staying in the landlord’s apartment for the duration stated in the contract. Your contract will also include the duration of the tenancy, the monthly rent, the due date, the responsibilities of both parties and any additional terms. 

Leases in big cities usually work the same way as other places but they may be affected by state laws and the competitive market. In New York, for example, the law covers issues related to a typical lease, such as the amount of notice your landlord has to give before raising the rent. This is similar in Los Angeles where the landlord has to give a 30-day notice before raising the rent by 10% or less.

What happens when you break a lease?

Breaking a lease means terminating the agreement before the date written on your contract. This usually has several consequences which could include:

Fees and financial consequences

Your landlord may request you to pay a fine or the remaining months’ rent when you break a lease. In some cases, you might lose the security deposit that you paid before moving. 

Legal consequences

If your lease doesn’t have an early termination clause, your landlord might sue you for breaking the lease. Talking to your landlord to find common ground is often the best way to avoid reaching this stage. 

Lower credit score

Early termination, unpaid fines, and a lawsuit can lead to a lower credit score. This might prevent you from buying a car or renting another place in the future. 

Breaking a lease is a big decision. Before you decide, make sure to read your rental agreement carefully. Your rental contract will most likely cover what happens if you want to leave early. 

Common reasons for breaking a lease and how to avoid them

Here are some scenarios that illustrate common reasons for breaking a lease.

1. Relocating for work

Let’s say that you’re living in Los Angeles but you found your dream job in San Francisco. You know you have to go! Sudden job changes and relocations do happen and in this case, breaking a lease might seem like the only option. To avoid fees or legal consequences, make sure that your lease has an early termination clause. Since this is an exceptional circumstance, negotiating with your landlord might also be a good idea.

2. Loss of job or other financial problems

Losing your job or struggling to keep up with the increasing cost of living can make it difficult to pay rent. It is important to budget, check the cost of living especially in big cities, and try to foresee your future plans before committing to a long lease.

3. Family emergencies

If you urgently move out of the city because you need to be closer to your family, consider letting the landlord know as soon as possible. If you’re planning to move out only temporarily, check if your contract allows subletting. This way, you can keep your apartment without losing money.

4. Major life changes

Life changes like getting married or having children might mean that your apartment is not suitable for you anymore. Ideally, you will have enough notice to give your landlord but in unpredictable situations, the best way is to communicate as soon as possible.

5. Unfavorable living conditions

If the apartment becomes uninhabitable because of health hazards or safety concerns, asking the landlord to fix them is crucial. Breaking the lease is the next step if the landlord fails to fix the issues. In this case, check the state laws or consider speaking to an attorney to learn more about your rights.

Is it possible to legally break a lease?

Besides unsafe environments and unfavorable living conditions which may allow you to legally break a lease, there are other factors that can help you to get away with it.

Early termination clause

Depending on your rental contract, you might have to pay a fee, find a new tenant, or give notice in advance for the early termination clause to work.

Negotiation with the landlord

Especially if you’re on good terms with your landlord, negotiating might work. A way you can help your landlord out is to find a replacement tenant that will take over your lease. 

Is it possible to find lease-free apartments?

Short answer, yes. Leases usually require a commitment of one year. If you’re planning a shorter stay, such a commitment will not be worth it. This is why people who are new to a city, employees on a business trip, or remote workers often opt for corporate housing.

These are move-in-ready, furnished apartments where you can stay for a month or longer, and signing a lease is not necessary. Designed to make you feel at home, corporate apartments also include luxury amenities such as housekeeping, rooftop, lounges, co-working spaces, BBQs, and more. Since you will be renting the apartment on flexible terms, you will not need to worry about the financial and legal consequences of breaking a lease. 

A lease for a living room with a TV and a couch.

Lease-free apartments are a great option

Without the need to sign a lease or deal with a landlord, you can focus on what’s really important: discovering the city, adapting to your new work environment, and enjoying life as much as possible. Once you’re all set, you will already know the city well enough to know where to look for long-term apartments and what to expect while signing your first lease. 

If you’re heading to New York, Los Angeles, San Francisco, or San Diego, we would love to host you at Anyplace’s corporate apartments. Live on your own terms – no leases are required.

Where to next? Find monthly rentals designed for remote workers on Anyplace.

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