If something happens in your life that doesn’t fit with the terms of your lease, your first thought is probably that you need to break it. A lease break is when a landlord terminates the lease contract, the unit goes back on the market and you pay some amount of penalty fee to them.
How To Break a Lease
It may not be possible to break your lease since landlord can hold you responsible for the rest of the rent until the lease ends if she or he desires. If it is possible, then you will likely need to pay a breakage fee of between one and three month's rent. To do this you should get in touch with your landlord or property manager and ask them what their lease break policy.
You can try to convince them to let you out without paying or to reduce the fee in a variety of ways. At the very least, you can tell them why you are leaving and hope than they empathize with your situation. For example, tell them that you changed jobs and make less money now so that paying the rent will be difficult, or you are getting relocated for your job.
Want to find out what the policy is in your building? Send a note with your address to [email protected] and we'll check it out for you.
Alternatives to Breaking Your Lease
The upside of breaking your lease is that you're no longer responsible for rent payments. The downside is that it's expensive. Instead, you can find someone else who wants to live in your place instead of you. This is a more of a win-win option for you and your landlord: neither side loses money.
Once you find a qualified replacement you have two options:
A sublet is a separate rental agreement between the original tenant and a new tenant who moves in temporarily, or who moves in with the original tenant and shares the rent. When you're subletting you continue paying rent to the landlord and your subtenant pays rent directly to you.
Assign Your Lease
An assignment is a transfer of interest in the lease from one renter to another. The process must go through the landlord and the assignee must be as qualified to you and willing to fill out a full rental application with a financial and credit check. They take over the remaining months left on the contract and pay rent directly to your landlord.
What is the difference between a lease break, sublet and lease assignment?
Each has different amounts of time, money and risk associated with it.
If you're making a decision based on time:
- Your quickest option is a lease break. If they let you do it, it can happen immediately.
- The second-quickest option is a sublet. Getting approved is faster and easier and there are rarely extra fees.
- The most-time consuming option is an assignment. You will need to prepare a full application on your proposed assignee and work closely with your landlord to close the deal.
If you're making a decision based on risk:
- The most risk-free option is a lease break. The lease contract will be voided, so there's no way you will still bear any responsibility.
- Subletting and assigning are often equally risky in that you may still responsible for anything going wrong, depending on what is in your sublet agreement or assignment agreement.
If you're making a decision based on money:
- The cheapest option is to sublet. Your rent will be covered.
- The second-cheapest option is to assign, since your landlord might charge some kind of assignment fee.
- The most expensive option is a lease break.
Having trouble deciding which route you want to take? Start by finding a tenant.
At that point you can decide - with your tenant and potentially also with your landlord - if it makes more sense to break, sublet or assign your lease.**
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