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Breaking a Rental Agreement Lease

Most rental agreements include a clause about the renter breaking the lease agreement. While there will most certainly be a section or parts on when the leasing agent can evict the renter, the section on breaking the lease should be of special importance to individuals who may find themselves in the situation of having to break the lease at some point.

Renters should be aware of these contract terms to make an informed selection. Furthermore, the renter should examine all of the costs associated with breaking the contract. This includes both monetary and emotional expenses.

Breaking a Rental Agreement Lease
Rental Agreement

Recognize the Contract Terms

Before signing this paper, renters should carefully research their rental agreement. The rental agreement is a legally binding document that should be carefully reviewed before entering into the arrangement. This is significant because comprehending these provisions will be critical if the need to break the lease arises.

Rental agreements often allow the renter to break the lease, but only with a penalty. This penalty usually takes the form of asking the tenant to give a certain period of notice before the contract expires, as well as paying a fee to break the rental agreement. A notice of 30 days and a lease break amount equivalent to one month’s rent are usual penalties connected with breaking a lease, however, individual leasing agents may apply fines that are either harsher or less severe.

Consider the Costs of Lease Termination

As previously stated, there is usually a fee for breaking a lease. This fee is frequently set at one month's rent. While paying this price may appear exorbitant, there are some circumstances in which it is economically advantageous to terminate the contract even if a financial penalty is imposed.

Consider a homeowner who is in the process of relocating due to a work change. The homeowner may choose to rent an apartment in the new state while the house in the previous state is listed for sale. If the tenant signs a 12-month lease with the expectation that it will take that long to sell the old house and buy a new one, he may be shocked if his old property sells quickly and he finds a home in his new state promptly. This might all happen in 2-3 months.

The renter has the option of remaining in the apartment until the rental agreement expires, at which point he or she can begin looking for a new place to live. However, this alternative increases the likelihood that the home he previously sought will not be available. The renter's other choice is to submit a bid on the new property and intend to break the lease if the new house can close. In this situation, the renter would be responsible for both rent and mortgage payments for 9-10 months. This is likely to be substantially more expensive than the renter's option to break the lease.

Breaking a lease isn't always a wise financial decision

The choice to break a lease is not usually only based on financial considerations. There are sometimes emotional components that enter the picture. For example, a renter may have only 1-2 months left on his lease when he is offered a dream job that requires him to relocate immediately. Although breaking the lease so late in the agreement is usually not a good idea, the renter may make this decision to prevent losing a dream job.