Getting Out Of A Lease When You Can't Pay The Rent
Getting out of a lease as an alternative to eviction
Affordable rents can quickly become unaffordable when you lose your job or when, for some other reason, your financial situation worsens. Moving to a less costly apartment or house may be your best option, at least until your situation improves. This is usually better than being evicted and then being forced to find another residence under severe time pressure.
If you break a lease, you may owe your landlord rent not just for those months you are in the apartment, but for some number of months after you leave. Nevertheless, switching apartments on your own time schedule, even with this penalty, may still be a better choice than waiting to be evicted.
Eviction can be a devastating and disruptive experience. Eviction makes the financial hardships you already have even worse because it puts extra costs and pressures on you. The speed of the eviction process may force you into unwanted choices, extra expenses and acceptance of far from satisfactory alternative living arrangements. Frequently, the only other housing available is more expensive than that from which your family was evicted.
You can avoid most of these problems by moving out on your own. This is almost always better than an eviction. While you may owe your landlord a penalty for breaking the lease, there are steps you can take to lessen this amount.
Reading the lease
The first step in terminating a lease is to read the rental agreement carefully. If the agreement provides that either party can terminate the lease by giving advance notice, you need only give the notice specified in the lease. Then you may move without responsibility for additional payments.
Check to see if the lease is for a specified amount of time, usually one year, or if it is a month-to-month lease. If you have lived in the apartment for a long time, the lease might have started out as a one-year lease but it may have turned into a month-to-month lease after that year ended. State landlord-tenant law will establish the rules for terminating those agreements. In most states you must give 30 days' written notice before moving, unless something is seriously wrong with the property, making it unsafe to remain there.
Negotiating with your landlord to reduce what you owe
If the lease requires you to pay for all rent due until the end of your lease, try to get a better deal from the landlord. If you want to try to stay in the apartment, start by asking for a rent reduction, explaining why the rent is no longer affordable. Lowering the rent may be less costly for the landlord than evicting you and finding a new tenant. This is less likely if you live in an area where it is very easy to find new tenants. Still, even if the landlord won't reduce the rent permanently, the landlord may do so for a few months until you get back on your feet.
Landlords may also allow you to break the lease without penalty so that they can rent to others who are better able to pay. You can even try to get the landlord to agree not to charge you for back-rent if you move out by a certain date. Landlords will often do this to get you out of the apartment more quickly and avoid expensive court costs. Be sure to get in writing any deal you make with the landlord. This will protect you if the landlord breaks his or her word.
Finding someone else to take over the apartment
There are two different ways that someone else can take over your apartment and the rent payments for you. One way is a sublease, where someone else takes over your apartment and pays the rent. In a sublease, you're still obligated to pay the landlord for any rent your subtenant fails to pay. The other way is for someone else to take over not only the apartment, but the whole lease, called "assuming" the lease. If you can find someone to assume the lease, you will be able to wash your hands of the lease forever even if the new tenant doesn't pay the rent.
Look at the language in your lease to see whether subleasing or assumption is allowed, and whether the landlord must approve the new tenant. Whatever the wording of the lease, the landlord may let you move out early with no penalty if you have arranged for responsible tenants to sublet or assume the lease. Even when a lease permits subletting or assumption, landlords should be consulted before you begin looking for new occupants. Landlords are more likely to cooperate with a sublease or an assumption if you let them know what you are trying to do.
Breaking the lease
If it is impossible to negotiate a friendly early termination, assumption or sublease, you should evaluate the financial cost of breaking the lease. Although there may be financial consequences of breaking a lease, the alternative of eviction--or of continuing to pay rent for an apartment you can't afford--is usually worse.
When a lease is broken, the amount you will owe the landlord is limited in most states. The landlord must try to find a new tenant for the unit right away. If the landlord doesn't try, this may provide you a defense to the landlord trying to collect additional rent from you.
If you have a month-to-month lease and you give proper advance notice that you are leaving, you have no financial liability to the landlord. If you have a one-year lease, you can only be obligated to pay rent until the end of the one-year lease period although you may have to give notice that you are not renewing.
If there are still a number of months left on your lease and there are no state laws that limit how much you owe, breaking your lease may mean that you will owe the monthly rent for the remainder of the lease or until the landlord finds a new tenant, plus any costs associated with the landlord finding a new tenant (whichever is less).
You can only be forced to pay, however, if the landlord goes to court. Landlords who take their cases to court may sometimes also be awarded court costs or attorneys' fees, if such fees are allowed by the lease agreement and state law. If a new tenant is found who will pay rent in an amount lower than you would have paid, you may be responsible for the difference.
If your landlord does sue you for rent owed, you might not make payments a high priority because the debt to the landlord is an unsecured debt. This means that it can only be collected by a lawsuit. Even after the landlord gets a judgment against you, he or she must find nonexempt property to satisfy the judgment.
If the landlord doesn't sue, your loss will be limited to the security deposit, last month's rent or other money held by the landlord (together with anything you agree to pay voluntarily).
Having a judgment on your record may cause you problems in looking for a new apartment. Some landlords subscribe to "tenant screening services'' that gather information from court records and sell this information to landlords who want to find out more about prospective tenants. If you live in an area where landlords frequently use these services, it is even more important to try to reach an agreement with your landlord before you move out. It is also important to try to get a copy of your credit report to make corrections if necessary.
Other things to do if you decide to break the lease
If you decide to break the lease, here are some steps to take to minimize your liability for damages:
The bottom line is that if you break a lease, you will probably lose your security deposit. However, if you plan carefully, making sure that the landlord suffers no loss of rent and has no unplanned expenses, you may recover some or all of the deposit.
- You should give the landlord plenty of notice, preferably 30 to 60 days, so the landlord will have time to advertise for new tenants.
- You should consider advertising the apartment yourself, either by word of mouth or through newspaper classified advertisements. Even if a sublease or lease assumption is not permitted, offering a suitable substitute tenant will make it hard for the landlord to argue that no other tenants were available.
- The premises should be cleaned thoroughly and left in good condition when you move so that there are no claims of damages against your security deposit. It's also to your advantage that there be minimal delay before the next tenant moves in. You should request that the landlord go over the property after you clean it to prevent any dispute over damages. You may also want to have a neutral party review the condition of the property before you move in case you need a witness later. You can also take pictures or video of the clean apartment to use in the event of a dispute.
- Check newspaper ads to verify that the landlord is making an effort to find new renters.
- After you move, you may also want to go by the rental unit from time to time for signs of new occupants.
State landlord-tenant laws provide specific procedures for recovering your security deposit if the landlord doesn't voluntarily return it. These state laws usually specify the number of days or weeks after you move out during which the landlord must return the deposit. If the entire deposit isn't returned, most states require landlords to send you an itemization of costs that were deducted from the original deposit. Check this itemization over carefully, as landlords commonly try to charge you for damage to the apartment that was not your fault. In most states, you can recover damages in a court case if the deposit is wrongfully withheld.