Terminating a Lease of a Rental Contract
It is usual for apartment rental agreements to contain clauses on the possible breaking of the lease by the renter / tenant in addition to clauses on the conditions under which the landlord may terminate the contract and evict the renter before the expiration of a rental agreement.
In a typical rental contract, the landlord allows breaking the lease by the renter subject to imposition of specified penalties. The typical penalty in such instances is an additional one-month’s rent after giving 30 days notice of intention to terminate. However, some contracts provide for additional penalties such as the tenant having to bear all costs connected with the termination until finding another tenant and taking the time factor also into the calculation.
Read and understand the Contractual Terms prior to Signing.
This is just one of so many possible pitfalls and deliberately laid out traps included in rental contracts and that is why we place so much emphasis on your going through the contract documents very carefully prior to signing.
Why does a tenant have to terminate a lease midway through a contract? It may be for a very good and genuine reason such as your getting a new job somewhere far away from the area that you cannot afford to turn down or miss, or may be for the reason that you are getting married and would need a more spacious and better apartment.
Of course it is not the landlord who is initiating this break; but you. A dream job or a wedding are major turning points in your life and no one would want to put them on hold and watch them go by simply for the sake of avoiding any penalty payments.
I am sure I also would have made the same decision as you to terminate the lease at all costs and face the consequences later! Depending on the circumstances under which you are requesting a break, some landlords may or may not impose penalties or impose more lenient or severe penalties. Provided you discuss the matter very politely with the landlord and if you undertake to find a good tenant for him quickly, he is likely to let you go free.
Assess the Financial, Economic and Emotional Costs of Breaking a Lease
Granted that there is a financially unfavorable cost by way of a penalty in terminating a lease, but provided the penalty payable is less than what you stand to gain by taking up your new post immediately, then there is an economic gain in breaking the lease. If it is for getting married that you are willingly break the lease and pay the penalty for it, then there is a clear emotional gain that by far offsets your financial and economic losses.
Now let’s go into a hypothetical case of a homeowner (this time, and not a renter), who gets a new job somewhere far away and takes an apartment on rent for 12 months in the town where he got the new job. He rented the apartment for 12 months thinking that it would take about that long for him to sell his old house and then buy a new one with those proceeds.
To his surprise his old house sells within 2 months and now he is in a quandary as to how to buy a new house because he has already committed himself by renting an apartment for 1 year, (that is a further 10 months). What should he do? Quit the rented apartment paying a penalty of 10 months rent and buy the new house or occupy the rented apartment till the lease expires?
If he stays another 10 months in the rented apartment, will the new house he intends buying be still available to him? It is most unlikely. His other option would be to give a quote for the house for sale, and if he is successful in his bid, to plan to terminate the lease, in which event he will have on his hands a dual problem of paying rent on the apartment plus a 10 month mortgage loan on the house purchased. This would be very much heavier than the cost of terminating the lease.
Premature Termination of a Lease does not constitute Financial Consideration Always
Sometimes, the breaking of a Lease constitutes more of economic and emotional overtones than financial. If a renter finds a job in a different location just 2 months into the expiration of his existing apartment renting contract, although it is not a sound financial choice to call off the lease with just two months more to go, he is most likely to do so anyhow, due to the emotional and economic reasons so as not to miss the opportunity of a new lucrative job that does not always come one’s way.