What You Need to Know Before You Break a Rental Agreement

If you plan on renting a home or an apartment, be aware that it involves all sorts of terms and conditions, all of which are going to be explicitly stated in the rental agreement. The rental agreement also includes a few pages stating the consequences renters face should they decide to break parts of the contract, perhaps after getting a mortgage and closing on a new house.

Such consequences usually involve paying a certain amount and going through some stressful procedures. As a renter, it is crucial that you familiarize yourself with these possible consequences before you even think about breaking a rental agreement.

Knowing What You’re Allowed to Do

Just because you have signed a rental contract does not mean your hands are tied completely. Most contracts actually permit a renter to break a rental agreement legitimately provided he adheres to certain conditions. For instance, if you need to break your rental agreement, your contract may require you to give the property owner ample notice, usually 30 days, before you vacate the premises. The rental agreement may also have the provision that you should pay a fee equivalent to one month’s rent or any specified amount before you are allowed to break the agreement. Of course, the actual conditions depend on the decision of the leasing agent, so it is important that you read the rental contract thoroughly before you sign it.

When Is It Okay Break a Rental Contract?

Most renters, upon signing a rental contract, intend to stay in place for a long time. However, there are situations wherein a renter has no other choice but to break his rental agreement. For instance, if you already own a home but are suddenly given an attractive job offer that is located in another state, you probably are not going to think twice about leaving and pursuing the career opportunity of a lifetime. You will most likely put up your home for sale and rent an apartment in your new state while you wait for your house to sell.

Now, let’s say the old house sells faster than you expected, enabling you to make a down payment on a new home where have relocated. You can choose to either remain in the apartment you are renting until the lease expires, or break the agreement and go off to buy yourself a new home. In this case, you need to decide based on the costs. If you continue with the rental agreement, you are going to have to pay rent on the apartment and the mortgage on your new house until your lease ends. On the other hand, if you decide to break your lease, you only will have to pay the mortgage on your new house plus the fee for breaking the rental contract. Obviously, you should go with the more financially sound decision.

But then there are also times when money is not the biggest factor. It may be that your rental agreement has only a few months before it is up, but something comes up that requires you to leave right away. It can be anything — a job offer, a family matter, or some other urgent emergency. In any case, you may have no choice but to pay the fee for breaking your rental agreement and pack up your things — even if staying until your lease expires proves to be the cheaper option.