How Much Does It Cost to Break a Lease?
Imagine this all-too-real scenario: After months of searching for the perfect job, you land your dream job in New York. The only problem is, they want you to start at the beginning of next month, but you still have three more months to go on your lease in Los Angeles.
Now, instead of celebrating your new opportunity, you’ve been staying up all night wondering whether you should break your lease, and, more importantly, how much it will cost to break your lease.
In short, breaking a lease early is a tough decision, and can be expensive. While some landlords may be sympathetic to their tenants’ situations, others may charge you considerably to break your lease. This guide will answer the question, “How much does it cost to break a lease?” by focusing on the following:
- Lease breakage fees for tenants
- Paying the whole rent upfront
- How to cut breakage fee costs
- When you can legally break your lease
Let’s get started!
Lease breakage fees for tenants
Breaking a lease early typically comes with a big financial hit. That’s because when you break a lease, you’re violating the terms of your legal agreement.
As a result, most landlords will make tenants pay lease breakage fees in the form of flat rates. Some landlords might even make you pay until a new tenant is found. To that end, there are typically three payment structures you must be mindful of when breaking your lease:
1. Flat fees
Most leases have a section detailing the amount you’ll pay if you break a lease. This amount is called the “flat fee.”Simply put, the flat fee’s the one-time, fixed amount you’ll have to fork over if you want to end your lease agreement early.
While the flat fee can differ based on the specific lease term, it’s almost always based on one of the following payment structures:
- Early termination fee: An early termination fee is typically equal to two to four months’ rent. The number of months will usually be stipulated in the rental agreement. For example, if your monthly rent is $1,200 and the early lease termination clause states that the fee’s three months rent, you’ll be on the hook for $3,600. Some companies may even charge tenants more than the rent.
- Amount of remaining rent: Rather than have you pay the equivalent rent for a stipulated number of months, some leases mandate that you pay the rent off in its entirety. For example, if your monthly rent is $1,200 and you still have five months left, you’ll have to pay $6,000.
- Amount of remaining rent + security deposit: Landlords who want to disincentive breaking leases early will charge you the remaining rent in addition to your security deposit amount.
Regardless of the fee structure, breaking a lease almost always involves taking a financial hit. However, early termination fees may not be the only fees you’ll have to pay. In some cases, you may have to pay additional costs.
2. Additional costs
In addition to paying an early termination fee, you may be on the hook for additional costs. These costs include:
- Late or back rent
- Unit damage costs
- Cleaning costs
- Costs associated with finding a new tenant
If you’re unsure about the flat fee structure and/or additional costs, you must read through the lease agreement before you break it to understand what you’ll be charged. This can usually be found in the “Early Termination Clause” section.
3. Pay until a new tenant is found
Payment structures that make you pay until a new tenant is found are more uncertain. That’s because, under this type of lease agreement, you’ll have to pay for as long as the rental unit’s unoccupied (or until your lease expires). This could be anywhere from one month to a full year.
For example, let’s say your monthly rent is $1,200. If your lease stipulates that you have to pay until a new tenant is found and it takes four months to find a new tenant, you’ll be on the hook for $4,800.
That said, if you work diligently with your landlord to find a new tenant and someone moves in after two months, you’ll have to pay considerably less ($2,400).
Some landlords may even charge an extra fee to help cover any advertising costs or broker’s fees associated with getting a new tenant through the door. Check with your landlord about what’s expected here, as you may be able to avoid these costs if you do the legwork of finding a new renter yourself.
Paying the whole rent upfront
If your living situation is uncertain (and you have the resources), you can eliminate early termination fees altogether by paying the whole rent upfront.
Paying the rent upfront comes with at least two key benefits:
- You don’t have to worry about making monthly payments
- You can (in theory) terminate the apartment lease at any time
That said, paying the rent upfront can be quite costly. Most rental agreements last a full 12 months, which means you’ll have to pay the full cost of the agreement at one time.
For instance, if your rent is $1,200 per month for 12 months and you decide to pay your entire rent upfront, you’ll need to pay $14,400. You may even have to pay additional costs once you move out.
Even if you have the resources, some landlords won’t let their tenants pay the rent upfront. That said, if you want to pay upfront but your landlord or the property owner won’t allow it, it may be beneficial to explain the precariousness of your living situation. Clarify how paying upfront guarantees that the property manager receives the full amount of rent—regardless of whether you stay for one month or 11 months.
How to cut breakage fee costs
Although most, if not all, leases require renters to pay an early termination fee if you decide to terminate your lease, you may be able to cut down on this breakage penalty in certain situations. There are even rental options that eliminate breakage fees entirely.
Read on to discover two ways to (potentially) minimize breakage fees as a renter:
1. Negotiate with your landlord
At the end of the day, your landlord is human. If you explain your situation politely and are willing to compromise, your landlord may be willing to cut down (or even eliminate) breakage fees. This is especially true if you have to move out through no fault of your own.
To negotiate with your landlord, it’s best to do the following:
- Explain your situation as clearly and politely as possible.
- Offer to help with building maintenance and repairs in exchange for a minimized breakage fee.
- Offer to work with them to find a new tenant for the rental.
If you have a good relationship with your landlord and have been a solid renter in the past, they may be more inclined to reduce your breakage fee.
2. Find a new tenant
Besides negotiating with your landlord, the best thing you can do to reduce your breakage fee is to quickly find a new tenant. If your landlord approves the new tenant, they can take over the lease, potentially negating the need for a breakage fee.
Additionally, you might even think about subletting your rental. Subletting essentially means renting out the apartment to another tenant. While subletting helps defray breakage fee costs, some landlords may not allow this type of arrangement, or may need the new tenant to go through a rigorous approval process before allowing them to live in your apartment. Again, it’s always best to read your lease thoroughly before breaking it.
When you can legally break your lease
In most cases, breaking your lease can lead to big financial (and sometimes legal) consequences. However, there are a few instances where you can legally terminate your lease without penalty. These instances include:
The unit isn’t habitable
If the rental unit’s no longer habitable through no fault of your own, you’ll be able to break the lease without penalty. Reasons a unit becomes uninhabitable include:
- Damage caused by natural weather
- The landlord fails to provide essential utility services to tenants
- The building doesn’t pass safety inspections
- The unit needs substantial repairs
As a tenant, you legally have the right to a home that’s liveable. If your landlord doesn’t ensure your home’s habitability, you have the right to terminate your lease.
You’re the victim of domestic violence
If you’re the victim of domestic violence, you may have the right to break your lease early. This applies regardless of whether the perpetrator lives in your unit or is a tenant in another unit in the building.
In this case, you may have to show your landlord documents pertaining to the domestic violence allegations. These documents typically include police reports and/or medical visits.
Your landlord violates your tenant rights
While landlords have a lot of power when it comes to the landlord-tenant relationship, there are a few things landlords simply cannot do.
The biggest of these is violating your tenant rights. If you experience harassment constantly or your landlord violates your right to privacy, you have an excellent case for a broken lease. You may even be able to take legal action against your landlord.
Limit fees with Landing
If you’re thinking about breaking your lease early, you should expect to pay an early termination fee, as well as additional expenses per your lease agreement. While there are things you can do to help minimize fees, these aren’t guaranteed to work.
What is guaranteed to work is living with Landing, a rental option that stands above the rest.
We offer flexible leases to furnished apartments across the country, allowing you to stay for as long as you like—with no fees or additional costs involved once you decide to move somewhere new. Whether you want to stay in your place for one month or 11 months, switching places is as easy as giving 30 days’ notice, without the hassle of finding a new tenant, paying hefty sums, or hoping you have a sympathetic landlord. Plus, our membership-based national network requires no application fees, security deposits, or additional month’s rent upfront so you can rest assured that you’re saving time and money.