Ending a Rental Agreement Early

A rental agreement or rental lease agreement is a binding contract.  This means that once you sign it, you are bound by its terms. You have a legal obligation to pay the rent and abide by the other terms of the lease or rental agreement until it expires.  Circumstances may arise which require you to break your lease, so it's important to know what your rights and obligations are under the law.

Reasons to Break a Lease or Rental Agreement

You may need to break a lease for an number of reasons. Some common scenarios include:

• Job Loss
• Job Transfer
• Illness
• Marriage
• Divorce
• Purchase of a Home

Regardless of your reason for breaking a lease, you will probably pay a penalty for doing so.  Your lease or rental agreement should contain a provision which explains the penalty for early termination.  You should keep in mind, however, that everything is negotiable.

Penalty Exemptions from Early Agreement Terminations:

Many states have laws which limit or prohibit early termination penalties under certain circumstances including:

• Tenant has been called to active military duty;
• Tenant must relocate to an assisted living facility as a result of an illness or injury; and
• The apartment or house is uninhabitable due to a natural disaster or other catastrophic event which was beyond the tenant's control.

You may also be able to avoid paying an early termination penalty if the landlord has broken the lease.  For example, if your landlord has invaded your privacy by entering the premises without giving you proper notice or if he has failed to maintain the premises in a habitable or livable condition (also known as constructive eviction), a court may refuse to enter a judgment against you.  To win this kind of lawsuit, you must be able to present evidence of what the landlord has done or failed to do.  Therefore, you must keep good, detailed records including photos and copies of all correspondence between you and the landlord.

If your reason for breaking your lease is not one that the law recognizes as a valid reason to waive the early termination penalty, there are steps you can take to minimize the penalty.  The most effective step is to give your landlord as much notice as possible of your intent to vacate the premises early.  Make sure to give the notice in the exact manner outlined in your lease.  Because the law in most states requires a landlord to mitigate his damages by making every reasonable effort to re-rent the premises, giving the landlord as much notice as possible of your need to terminate your lease will probably work to your advantage.  Once the landlord finds a new tenant, you will only be responsible for his loss of rental income during the time period the property is vacant.

Oral and Signed Rental Agreements

In most jurisdictions, if the parties have an oral agreement pertaining to the rental of real estate and the landlord accepts payment from the tenant, the agreement will be enforceable for up to one year.  In instances where only one of the parties has signed the written lease or rental agreement, some courts will recognize the terms of the lease as long as the signing party delivered the signed agreement to the other party.

In jurisdictions that require both parties to sign a lease or rental agreement if only one party has signed and landlord has accepted rental payments from the tenant, the agreement will be treated as a month to month tenancy.  The law in most states requires one party to provide the other party with at least 30 day's written notice of his intent to terminate a month to month tenancy. Failure of either party to give the appropriate notice may result in a monetary judgment being entered against him if the other party files a lawsuit.

Help and Advice

Never move out without giving your landlord the appropriate notice.  After you give notice, try to negotiate a reduction in the early termination penalty and offer to help your landlord find a new tenant.

If you are not sure of your rights and obligations under your lease or rental agreement and you must terminate early, you should contact an experienced landlord-tenant attorney and ask her to review your lease and advise you of the law in your state.