Breaking a Lease on a Rental Agreement
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Having a tenant break a lease can be a stressful experience. But by writing your lease agreement carefully, you may be able to head off some problems before they ever arise. Breaking the lease usually means that a tenant has vacated a property before the term of the lease has expired.
Most rental agreements have a section regarding the renter breaking the lease agreement. While there’s also likely a section or various sections regarding when the leasing agent may force out the tenant, the section on breaking the lease should be of particular interest to those who might be in a position to have to break the lease a few day. Tenants should understand these contract terms so they may make an informed decision. Additionally the tenant should consider all prices associated with breaking the lease. This includes some financial prices as well as emotional prices.
Understand the Contract Terms
Tenants should review their rental agreement carefully before signing this document. The rental agreement is a legally binding document which should be given proper consideration before entering into the agreement. This is important as understanding these terms will be essential if the need to break the rental becomes a fact.
Rental agreements normally do allow the tenant to break the lease but not without a few form of penalty. This penalty normally comes in the form of requiring the tenant to give a specified amount of notice before the contract is up and also requires the tenant to pay a sum of money to break the rental agreement. A notice of 30 days and a lease break amount equal to one month’s rent are common penalties associated with breaking a lease, however, individual leasing agents may impose penalties which are either harsher or less severe.
Consider the Costs of Breaking the Lease
As previously mentioned there’s normally a fee associated with breaking a lease. This fee is much set equal to one month’s rent. While paying this fee may seem excessive there are a few instances in which it’s an economically good decision to break the contract even though there’s a financial penalty imposed.
Consider the example of a householder who’s the process or relocating due to a job change. The householder may opt to rent a flat in the new state while the house is put up for sale in the previous state. If the tenant enters into a 12 month contract under the supposition that it will take this long to sell the old house and buy a new house, he perhaps surprised if his other house sells quickly and he gets a house in his new state rather quickly. This may all occur within a matter of 2-3 months.
The tenant has the alternative to stay in the flat until the rental agreement nears expiration and then begin looking for a house. However, this option runs the risk that the house he previously found won’t likely be available. The tenants other alternative is to place a bid on the new house and plan on breaking the lease if he’s able to close on the new house. In this case, the tenant would be saddled with both a rent and a mortgage for 9-10 months. This will likely be significantly more expensive than the price the tenant would pay to break the lease.
Breaking the Lease isn’t Always a Financial Decision
The decision to break a lease isn’t always completely a financial decision. There are sometimes emotional components which factor into the equation. For example a renter may have only 1-2 months remaining on his rental agreement when he’s offered a dream job which will require him to relocate immediately. Though breaking the lease that late in the agreement is normally not financially wise, the tenant may make this decision to avoid missing out on a dream job.
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June 19 2010 06:49 am | Home Value
