How Much Does It Cost To Break A Lease?

Are you considering breaking your rental lease? Even though renting a home comes with numerous benefits, moving out anytime you wish is not one of them. Most leases required that occupants (tenants) provide a minimum of one month’s notice that they are leaving the rental to their landlord. If the tenants have plans to terminate the lease before the end of their term, they may be required to negotiate special conditions with the landlord to avoid being charged high fees.

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How Much Does It Cost To Break A Lease

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Are you considering breaking your rental lease? Even though renting a home comes with numerous benefits, moving out anytime you wish is not one of them.


Most leases required that occupants (tenants) provide a minimum of one month’s notice that they are leaving the rental to their landlord. If the tenants have plans to terminate the lease before the end of their term, they may be required to negotiate special conditions with the landlord to avoid being charged high fees.


The cost of terminating a lease will majorly depend on the tenant’s as well as the landlord’s leniency.


Of course, a lot of landlords are reasonable and know that in some cases, tenants need to move because of various reasons. Maybe the tenant bought a home or got another job in a new city. If there is a legitimate reason for terminating the lease abruptly, the landlord may be highly sympathetic and ready to let the tenant off the hook of financial obligations of a signed lease contract. After all, the tenant has signed in concession to pay a particular amount of rental for a particular period.


For further information about terminating a lease and how much it cost, continue reading.  


The Typical Cost of Breaking a Lease


Terminating a lease can cost around nothing to many thousands of dollars. Numerous factors are playing a huge role here, including the reason you are leaving, whether your lease contains an early termination clause, the local laws that may apply, as well as the amount of time left on your lease.


Most often, the amount it will cost you to terminate your lease is spelled out in the rental agreement, generally in an early breaking clause or something related. That part won’t just indicate the amount a landlord can charge, but also indicate any steps you must take to terminate the lease.


Laws of breaking leases can dramatically vary. In some situations, landlords may be restricted to charging a certain amount, typically depending on how much your rent is.


If this is your situation, you may have to pay a flat fee for leaving early. However, you could also see a formula or chart, as the amount you owe may vary based on how long you have on your lease.


Let’s talk about three popular scenarios based on the cost to terminate a lease.


1. Flat Fee to Terminate a Lease


Lots of leases have a flat fee to terminate the lease. In these situations, the cost generally equals to two or three months’ rent. For instance, if your rental costs $1,000 per month and the fee for early termination is two months’ rent, you would need to pay $2,000 to cover that fee. If the penalty is 3 months’ rent, then you’d be paying $3,000. There may be extra costs too.


For example, if you owe previous due or existing rent, or have to pay certain fees to cover any damage aside from wear and tear, you would owe beyond the $2,000 or $3,000 mentioned above.


2. Paying Till a Tenant is Found


You may be required to continue paying the complete rent until a new tenant shows up. If for instance, your monthly rent is $1,000, you would continue to pay $1,000 every month until a new tenant moves in or your lease expires in the process.


Are you or the landlord responsible for finding a new occupant in this case? Even though some states have laws that mandate the landlord to get a new tenant, it is never a poor move to find a new tenant on your own. As long as the rent is still being paid by you, the landlord has no strong motivation to aggressively find a new tenant.


To save money, you can even find a tenant before you move out. If you get a tenant willing and ready to move in immediately you are out the door, you might not even pay the excess at all – we’ll discuss more on that soon.


3. Paying the Entire Lease Upfront


In other cases, the current tenant may have to pay for the complete remainder of the lease agreed to upfront. In that case, you would end up getting credit back immediately a new tenant is found or until the actual lease period is over.


For instance, if your rent is $1,000 monthly, and there are 4 months left until your lease ends, you’d owe $4,000. Then, if a new tenant finally moved in after two months, you’d be given 2 months’ rent ($2,000), credited back. This can be a huge amount to pay at once, but if you have the money to cover it and are coming up after your lease anyway, this can be reasonable. Again, it is wise to find a new tenant ready to move.


How to Terminate Your Lease without Being Charged a Fee or Facing Legal Actions?


Even if your landlord is legitimately right to fine a penalty for terminating a lease, that doesn’t mean you can't avoid it. In general, you will have to determine another option of arrangement with your landlord. If there is a reason behind breaking your lease aside from a special situation covered by the law, you will possibly incur some fees. Fortunately, there are steps you can take to reduce the financial and legal damage when you move out. 


These include:



Find words like ‘early termination’, ‘sublet’, and ‘re-let’, and when you sight the words, remember the page number so you can carefully read through it again when needed.


The lease agreement may show that you have to give your landlord a notice of vacation from the apartment 1 or 2 months in advance or that you have to get a replacement tenant. A lot of leases will also offer an alternative for breaking the agreement quickly, but they usually come with higher fees and a loss of your bond.


Tenants are offered protection by state tenant’s rights laws which may enable them to terminate their lease in specific circumstances, like if the property becomes unlivable, if the landlord failed to finish repairs, or if you can locate a loophole inside the lease that renders it legally invalid.


If you agree to sublet the rental to a new tenant and you don’t have the documentation that backs the agreement, the lease may still be your responsibility.


However, remember that rental payment until the end of your lease agreement is still your responsibility. To increase your chances of breaking out of the lease without being fined, we suggest you speak with the landlord about leaving the lease as soon as you can.

If the tenant and landlord are not able to find a new occupant, then the tenant will have to pay the rent by law. If the landlord can get a replacement renter for the unit, then the old tenant will no more be responsible. However, (as discussed earlier) if the landlord is forced to re-rent the unit for a lesser rental rate, then the old tenant will have to pay for the cost difference.

Yes, everyone will need to consult their lease agreement to figure out whether subletting is allowed or not before they find a subtenant. Sadly, many lease agreements are against subletting a home to another tenant.

Four Reasons not to Terminate Your Lease

In some cases, terminating a lease can be avoided; however, you need to carefully look into the consequences when considering terminating your lease.

We will outline a few reasons you should continue with it till the end of your lease duration if you can.


1. Early termination fees: Each lease agreement come with different early termination conditions (the small printed paper that dictates what happens if you break your lease), and the fees are significantly different. When you are signing a lease, you are agreeing to remain in the unit for the duration of your lease, by law. If you terminate the lease, you incur penalties (usually fees) in the early termination condition. The condition may ask you to pay 1 or 2 months’ rent, or to pay for the rent until they find a new tenant to sign a lease on the exact unit, leaving you with a huge bill to pay.


2. It will affect your credit score: Many landlords will not be able to report the broken lease to a credit reporting agency directly, but they sure can sue you in small claims court for terminating the agreement. This could lead to a civil judgment which is taken as debt and reflects as a negative strike on your credit history.


Civil judgments remain on your report for 7 years starting from the filing date and will have a negative effect on your credit history for a lot of time. A landlord may decide to hire a collection agency to get the debt, and you will also see this collection amount reflected in your credit history and stay there for 7 years starting from the date the account was submitted for collections.


3. You may need a lawyer to defend you in court: Leases are agreements that bind by law, and your landlord is by right permitted to sue you to recover rent payments. Usually, the landlord wins. And while you may think that giving your landlord "enough notice" (like 1 - 2 months) should enable you to break the lease, it is still your responsibility to pay the rent until the end of the term or until the landlord finds a replacement.


4. It may be tough to rent another place: Immediately you've terminated a lease agreement, don't think you will easily get another place. Your new landlord may ask for rental references or may check your credit report. Any sign of negative information, such as a breach of agreement could lead to denial of your rental application from future landlords. Even if you lie or try to rent before the broken lease reflects on your credit report, the landlord may later figure out the truth, and it could affect your being able to remain in the rental.


Good Reasons to Terminate Your Lease


There are numerous reasons to terminate a lease. Many reasons that should legally relieve you of the need to pay rent are:


Are you moving soon?


Whether you are terminating a lease and leaving or replacing an old tenant and moving in, you will need all the moving assistance that you can get. You can get all the help you need from through its wide network of dependable and trusted movers who makes booking the best moving company for your job easy.


All local moving companies in our database are insured and licensed, so you can be certain that good hands will handle your entire move. To get personalized moving checklist, personal to-do lists, useful recommendations, coupons, and email reminders to keep you organized before moving, use our helpful moving guide also. Good luck and enjoy your move.


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