WHAT TO DO IF YOU NEED TO BREAK YOUR LEASE
By Annie Hawkins of Sovereign Associates Inc
Life happens and you may find that a change in your circumstances means you have to break your current lease. But don’t just skip out on your landlord—you may want to use them as a reference later on, and if you just up and leave this could affect your credit score down the road.
When you sign a lease for a New York rental apartment you are essentially signing a contract: You are legally responsible to pay the rent for the entire lease term, whether it’s 12 months or 3 years. If you need to leave you apartment before the end of your lease you risk losing your security deposit, or you may have to pay your rent until a new tenant is found.
But there is some good news: NYC landlords have what’s called a duty to mitigate damages, which means they have to do all they can to find another tenant at the same rent or market rent, whichever is lower. If the market is really competitive, they can choose to increase the rent, and if they do so it lets you, the original tenant, out of the lease. This law is intended to equally incentivize both parties to find a new tenant who meets the building’s income requirements and who can sign a new lease for the apartment.
At Sovereign Associates we will work with you by screening prospective tenants, to find tenants who will meet the landlord’s income requirements and their credit requirements if needed. You may have to pay toward the broker fee as an incentive for the new tenant to rent your apartment, but this will certainly be less than having to continue paying rent on your existing lease.
How to Break Your Lease
1) Put it in writing
As soon as you know you want to get out of your lease, notify your landlord or management company in writing. A letter sent by registered mail is the formal method but check your lease to find out how you should communicate with your landlord. In your letter be clear in explaining your situation and find out what your options are.
Always approach your landlord first, with the idea that they will act reasonably. They may ask you to find a replacement tenant, or to allow them regular access to your apartment so they (or a broker they work with) can market it and show it to prospective tenants.
While ending a lease early is fairly common there’s no standardized way to do it. Ask you landlord what you need to do. They may keep you on the hook until you re-rent your apartment, they may ask you to find a qualified tenant, or they may let you out with a penalty. Your goal is to get your landlord to sign a “surrender agreement” containing language that legally releases you from your lease.
2) Find another tenant to take on the lease
If you know someone who wants to move into your apartment when you leave this will make things easier for you. However, the landlord will want to approve the new person according to their financial criteria and other screening processes. Even though there’s an expression out there that a person can “take over” your lease, the new person will be signing their own new lease.
3) Avoid breaking your lease in winter, if possible
The slowest rental season is usually November through March so if you need to break your lease during this time it can be a bit more complicated. Since rents may be lower in winter your landlord may have to offer more concessions to get your apartment re-rented.
An environment in which rent prices are increasing is a better time to break your lease because it gives the landlord more of an incentive to work with you. That said, if your lease ends in a winter month and you are looking to break it in the summer a landlord might appreciate it if you can find a new 12-month renter with a summer lease start. The best starting place is to have your apartment marketed 60 days in advance of your lease break.
4) Your security deposit is (technically) safe
Your security deposit is likely refundable if your apartment is clean, undamaged and you return a working set of keys. Your landlord does need to provide you with a walkthrough at the end of your tenancy, itemize any damage, give you an opportunity to make repairs, and pay you your money back, less the cost of any repairs, within 14 days or your tenancy ending.
