What Happens If You Break a Lease?

Breaking a lease early can be costly. You might have to pay a lease break fee, or even pay the remaining months’ rent in full.

But breaking a lease doesn’t have to cost you anything. If you find a suitable replacement tenant, for instance, you might be able to end your lease on good terms without having to pay anything extra.

Read your lease

Your lease might include language on what happens if you leave early. This is called an early termination fee or a lease break fee. If your lease has that policy, you’d need to pay whatever amount the lease specifies to break it, typically one or two months’ rent. If you have only a couple of months left on your lease, it’s probably better to stay for the entire lease term, if possible. If you want or need to leave well before your lease is up, then you’d probably choose to pay the lease break fee and, literally, move on.

Why breaking a lease is a big deal

When you sign a lease for a specified period, you’re also agreeing to pay a certain amount of money to the landlord: A 12-month lease at $1,000 a month means you agree to pay the landlord $12,000. If you leave early, the landlord still has a right to any balance owed. So if you want to leave after six months, for example, you would owe the landlord $6,000, unless there’s a lease break fee option. If you have a lease break fee of two months’ rent, for instance, you would owe only $2,000, no matter how much time is left on the lease. 

What to do if there’s no lease break clause

If your lease is silent on the issue of breaking the lease, and you need to leave before your lease is up, you should tell your landlord immediately. There’s a good chance your landlord will work with you. But if you just leave without telling your landlord, your landlord could sue you. Let’s explore that option first.

Leaving without telling the landlord: the worst thing you can do

If you just leave early without telling your landlord, your landlord could sue you in small claims court for the remaining months of rent. If you had put down a security deposit at move-in time, your landlord will probably keep the entire deposit to recover any unpaid rent. If the security deposit isn’t enough to cover the balance of the rent owed, the landlord could sue you for the rest. And if you damaged the unit, the landlord could sue you for the cost to repair the damages.

If you lose the court case, you’ll need to pay the balance owed plus any damages and court costs. Plus, the judgment against you will probably go on your credit report, making it difficult for you to rent another place.

Telling your landlord you need to break the lease: the best thing you can do

If you let your landlord know you need to leave early, the landlord might be willing to work with you. In most states, landlords need to mitigate damages. That means, your landlord can’t just sit back and collect rent from you until the lease term ends. It means they must actively look for a replacement tenant. As soon as the landlord finds one, you’re off the hook for paying rent.

It’s in your best interest to help the landlord as much as possible because the sooner there’s a replacement tenant, the sooner you can stop paying rent. Here are some things you can do:

  • Let your landlord show the unit as much as possible while you’re still living there.
  • Keep the place neat and clean for showings.
  • Find a replacement tenant before you leave.

If you find a replacement tenant, the landlord is under no obligation to accept that person. Landlords typically run credit and background checks before they rent their property, so expect that to happen with someone you find.

If you or your landlord can’t find a replacement tenant, you’re on the hook for the balance of the rent owed. Or if the landlord needed to reduce the rent to get a replacement tenant, you’d need to pay the difference. If you were renting for $1,000 a month, for example, but the landlord could only rent the unit for $800, you’d need to pay that extra $200 for the remainder of your lease term.

Your roommates could sue you

If you have a roommate or roommates and you all split the rent but you leave early, your roommates could sue you in small claims court. In this case, your roommates would need to cover your share of the rent to the landlord. If they can’t or don’t, they could be evicted, and you’d share in the costs.

Find out whether you can sublet

If you need to break your lease, you might be able to sublease. That person would either pay you rent, which you would then pay to the landlord, or that person would pay the landlord directly. If the person subleasing is paying the landlord directly, though, and doesn’t pay rent, you’re liable for it, along with any late fees. 

Note that a late fee policy must be in the lease for the landlord to be able to collect late fees. Landlords can’t arbitrarily assign a late fee after the fact. And some states have limits on how much a landlord can charge in late fees.

A possible benefit – or drawback

There’s a possible bonus for you if you sublet: You might be able to charge more than what you’re paying, thereby making some money on the deal. But be careful. If your rental unit is under rent control laws, you might not be able to charge more. You’d need to check your state law if you want to charge more than what you pay. 

On the flip side, you might not be able to get the full amount of rent from the person subletting. You might be able to get only 80%, for example. Getting something is better than nothing, so that might be your best option.

Some landlords don’t allow subletting

Some leases prohibit subletting. If yours does, you don’t have that option. But you might want to ask anyway. Your landlord might be willing to make an exception, especially if you have a great replacement tenant lined up and you’ve had a good relationship with your landlord. 

If your lease doesn’t say anything about subletting, you generally can do it. But it’s better to run it by your landlord just to make sure. Landlords rarely like surprises, and many leases that allow subleasing require the landlord’s approval first.

A note about subleasing

Subleasing works best when you plan to return to the unit. Let’s say you need to be out of town for a few months but then plan to return. Subleasing holds your rental unit while helping you out with the rent. If you know you’ll never return, though, it’s usually better to end your lease and help find a replacement tenant. That way you won’t have any surprises if the person who’s subleasing stops paying rent or damages the unit.

Before you sign a lease

It’s both expensive and a hassle to break a lease. So before you ever sign a lease, if there’s a good chance you won’t be able to stay in the rental unit for the entire lease term, you’d probably be better off signing a month-to-month rental agreement instead. With that, you’d only need to give one month’s notice before you move. That isn’t always an option. But it might be a good idea to look for a rental with a month-to-month arrangement if you think you might have to move soon. 

Extenuating circumstances

You might be able to break a lease with no penalty if the landlord isn’t fulfilling their obligations. Landlords must provide a safe and habitable dwelling. 

If your place isn’t safe and the landlord takes no action to make it safer, you might be able to break the lease. For example, your rental unit must have doors and windows that lock. You can’t be expected to live in an unsecured unit. The same goes if the landlord won’t make repairs to make the place habitable, such as if you have no hot water or working stove. 

If you’re in the military and receive orders to report for duty, you’re allowed to break your lease without penalty as long as you give the proper notice to your landlord.

The bottom line

A lease has a start date and an end date. When you sign a lease, you’re responsible for paying rent for the entire lease term. If you need to leave early, work with your landlord to make the process as painless as possible. Sometimes there’s not much you can do, but if you have a good relationship with your landlord, they might be willing to help you out.