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How much does it cost to break a lease?

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Introduction

Lease agreements are usually long-term agreements; however, tenants might need to move from the property way before the lease reaches its expiry date. Although the tenant may have agreed to reside in the property for a stipulated amount of time, they may need to move due to circumstances unforeseen.

The good thing about lease agreements is that, although they are legally binding, it is still very much possible for you to exit. There are terms and conditions that free the tenant to do so. In a lot of instances, the tenant has to pay a penalty fee for breaching the contract.

breaking contract
Lease agreements are usually long-term agreements; however, tenants might need to move from the property way before the lease reaches its expiry date

What is a lease agreement?

It is simply a contract between a landlord and a tenant. It stipulates how much the tenant will be paying each month and for how long. It clearly outlines the obligations of both the landlord and the tenant. It also states who amongst the two parties will be responsible for the maintenance of the property.

The lease is a legally binding contract that can and will be used in the court of law if there are any legal proceedings between the two parties. It is then important for all the parties involved in the lease agreement to understand the lease so that they know their rights and they also know when they are in violation of the terms and the conditions.

In very rare instances, the lease can also be in the form of a verbal contract. Both parties agree on their terms and their responsibilities orally. Tenants that exist under these circumstances are protected by the tenants-rights laws as they may be susceptible to abuse or exploitation by their landlords.

lease agreement in details
In brief lease contract is – agreement between landlord and tenant

How to break a lease.

Most landlords first consider the conditions or the reasons for breaking the lease. If you do not have any legal grounds for doing so, you may suffer huge consequences, especially if your landlord does not sympathize with you.

The first step to breaking a lease would be to go through the contract and reading the terms of “early release”. This will help you understand what is most likely to happen if you break a lease and also help you answer the most commonly asked question “how much does it cost to break a lease

 

The second step would be to talk to your landlord or put in a notice. This is to ensure that they know about your intentions to leave and also the reasons. You will then discuss based on the terms of the lease agreement what your penalty will be if any.

 

How much does it cost to break the lease?

There is no specific amount a tenant should pay when breaking a lease agreement, it always depends on what the terms and conditions of the lease itself.

Some leases have an early termination clause that stipulates that a tenant should pay anearly termination fee. The fee can range from any amount, sometimes it is the value of a month’s rent and sometimes double the amount. It always depends on what the landlord has put down on the clause.

terminating fee
Terminating contract fee consist of a lot of parts

Pay remaining rent

Other early termination clauses on the contract say the tenant ought to pay rent for all the months remaining until the lease eventually expires. This means even if you have occupied the property for only five months out of twelve, you will be required to pay rent for the following seven months. It sounds like a very harsh clause but if you signed the lease, it is something you will have to live with.

paying rent
Don’t forget about paying rent

Security Deposit.

In some instances, lease agreements stipulate that if the tenant exits the contract prematurely, they forfeit their security deposit. This means you lose all rights to get your security deposit back as you normally would. In this instance, breaking your lease will cost you the value of your security deposit.

Pay rent until the Landlord finds a new tenant

Some lease agreements will require you to continue to pay rent but only until they find a new tenant. This means the longer it takes for them to find a new tenant, the higher the cost of breaking the lease. The sooner the landlord finds a new tenant the lower the cost of breaking the lease. This kind of agreement allows you to decide your fate. Most tenants who want to avoid incurring too many costs help the landlord find a tenant as soon as possible. If they are lucky, they can even find one before they leave or officially break the lease.

 

It could go to court

In most instances if the tenant-landlord relationship is strained or when the tenant breaks the lease following bad circumstances that do not have any legal grounds, the landlord is most likely to take it to court. If the landlord wins you are most likely to end up paying rent for the duration of the lease agreement and also lose your security deposit. The court is most likely to hold you to continue for the damage to the property. Other costs will also include court costs and attorney fees.

If this is where breaking your lease will lead to then it is definitely not going to be cheap.

 

Can you break a lease without incurring any costs?

The most guaranteed way of breaking a lease without incurring any costs or with very little costs is when the lease itself says so. Sometimes if the lease has no clause that says anything about early termination, it gives a leeway to break the lease without having to incur any costs.

In some instances what could save you is a good relationship with your landlord. If you have an understanding, they could sympathize and you might not have to bear the cost of terminating the lease.

breaking lease without overpaying
Check your lease about termination

Conclusion

It is important that you only sign a lease if you understand what the terms and conditions are. In terms of early termination of the lease, if you have legal grounds you are most likely to break the lease swiftly and without any complications.

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