A tenant cannot break a lease early before moving in, as the lease is a binding agreement that has already taken affect. Any tenant that breaks the lease before moving in is subject to the same penalties as an occupant who breaks a lease early, regardless of when it happens.
What is a Legally Binding Lease Agreement?
When a landlord and tenant have signed a lease agreement, they have entered into a legally binding agreement. This agreement outlines the terms of the contract such as when rent is due, how much notice is required by the landlord to enter the premises, and the consequences of lease violations.
Furthermore, both the landlord and tenant have obligations they must fulfill. For example, a landlord must provide a habitable premises and make necessary repairs. Tenants must pay the rent on time and ensure they are using the premises in the proper way.
Breaking the Lease
Once signed, the landlord and tenant have entered into a legally binding contract, regardless if the tenant has moved in or not. A tenant may decide they want to break the lease before moving in due to:
- Job relocation
- Moving in with a significant other
- Medical issues
- Family affairs
- Loss of interest
However, a tenant cannot break the lease early without penalty for any of those reasons.
Breaking a Lease Before Moving in with an Early Termination Clause
An early termination occurs when one or both parties involved in a rental agreement decide to end the contract before its scheduled expiration date. Generally, an early termination clause is written into the lease agreement and agreed to by both parties.
The early termination clause will generally specify:
- The cost for breaking the lease
- The amount of notification required
- The method of notification required
What happens largely depends on how the lease is written. Most of the time, the tenant is bound to the lease for a year. However, if the tenant is on a month-to-month lease, no early termination clause is required and the tenant simply needs to give 30 days’ notice.
Penalties for Breaking a Lease Early
If the lease does not allow for early termination, then there may be certain penalties a tenant may have to face.
Liability for Rent
As the tenant is bound by the contract, they will also be liable for the requisite rent payments attached with the contract. Most states do require that the landlord has a duty to mitigate damages, which ensures that the landlord acquires a new tenant as soon as possible. Therefore, a tenant will only be liable for the rent until a new tenant is found.
Loss of Security Deposit
Security deposits are used to ensure a landlord is compensated, at least in part, for any loss that the tenant is responsible for. The security deposit is generally equal to two or three months’ rent. If a tenant breaks a lease early, the landlord is able to keep a part or all of the security deposit to ensure they are able to make up for the loss of unpaid rent.
Breach of Contract
As a lease is a contract between a landlord and tenant, there is a possibility that the landlord sues the tenant in court to recoup certain damages that they are entitled to. These damages can include loss of rent or property damage.
Some leases may contain clauses that set out the predetermined costs associated with lease violations known as liquidated damages. This is to ensure that the landlord is compensated for any lost rent or other damages associated with the violation.
Although there are penalties associated with breaking a lease before moving in, a tenant can always try other options to see whether they can terminate without paying a penalty.
A tenant may be able to convince the landlord to allow them to break the lease even before moving in. A tenant could explain the situation surrounding early termination, and might persuade the landlord to let the tenant break the lease. Furthermore, willingness to assist the landlord mitigate the costs of the lost damages could be helpful in negotiating a tenant’s way out of the lease.
Subleasing or Assigning
Subletting would be the quickest way to get out of a lease without paying a penalty. The original tenant would technically still be responsible for the rent payments, but someone else is living there and has agreed to pay the landlord on the tenant’s behalf. Although the original tenant’s name would still be on the lease, it provides an alternative to having to pay the penalties associated with terminating the lease.
Assigning is the transfer of the lease over to the new tenant. While similar to subleasing, assigning ensures that the original tenant’s name would not still be on the lease. The transfer of the lease would mark the end of the landlord tenant relationship and relieve all duties of the original tenant.