Cost of Breaking a Lease

Last Updated: November 1, 2023 by Phil Ahn

Tenants that break their lease early may be held liable for all remaining rent due and any property damage. However, landlords in many states must make a reasonable effort to re-rent and must stop charging the old tenant if a new tenant is found.

Breaking a Lease Without Financial Penalty

In most states, a tenant may break a lease without penalty under the following circumstances:

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Tenant Costs for Breaking a Lease

Most states do not have a law limiting the the amount a tenant owes a landlord when breaking a lease early. A tenant could be liable for remaining rent through the life of the lease. However, depending on the state, a landlord must mitigate damages and seek to replace the tenant.

Remaining Rent

If a tenant breaks a lease early, they will still be liable for the remaining rent due. In states where landlords must try to re-rent the unit, once a new tenant is found, the original tenant is no longer liable for the remaining rent.

Damages to Property

When a tenant breaks a lease early, they will be liable for any property damage that was caused during the tenancy. This is the same whether the tenant breaks the lease early or the tenant fulfills their contract to the end. Property damage is the destruction of the premises through the tenant’s negligence and fault, rather than issues caused through normal wear and tear.

Early Termination Costs

In many leases, the landlord and tenant can agree to include an early termination clause. This allows the tenant to legally break the lease early, but there will be a financial penalty associated with this. In general, the tenant would no longer be liable for the rest of the rent due over the life of the contract.

Whatever the Tenant Negotiates with the Landlord

If there is no early termination clause in the lease, or if the landlord is open to negotiation, the tenant and landlord can come to an alternate agreement. This could be in the form of a different amount of money paid, the tenant agreeing to leave behind their entire security deposit, or they agree to find a new tenant to replace them in the unit.

Landlord’s Duty to Mitigate Damages

When a tenant breaks the lease early without justification, they are still liable for the remaining rent due. However, in most states, the landlord is required to re-rent the premises to another tenant. This is known as the landlord’s duty to mitigate damages.

States that do not require a landlord to mitigate damages include:

  • Arkansas
  • Florida
  • Georgia
  • Mississippi
  • New Hampshire
  • Pennsylvania
  • South Dakota
  • Wyoming
  • Vermont

Common steps that landlords take to mitigate damages include:

  • Advertising the vacant rental unit
  • Showing the property to potential renters
  • Setting a fair rental price to attract renters
  • Responding timely to interested renters

If the tenant successfully mitigates damages by finding a new tenant, the original tenant will not have to continue paying rent. The tenant may still be responsible for rent payments until the new lease agreement begins or until the original lease term expires, whichever occurs first. The tenant may also be responsible for any costs incurred by the landlord in re-renting the property, such as advertising expenses or leasing commissions.

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Tenant’s Right to Sublet

Rather than break a lease and subject themselves to financial penalties and costs, tenants can potentially sublet the property. Unless any lease states otherwise, a tenant’s right to sublease is contingent upon receiving the landlord’s written consent. Either the original lease or a separately signed agreement can provide this consent.

Consequences for Moving Out Early

If a tenant breaks their lease and moves out early, the potential consequences include: 

  • The landlord keeping the security deposit
  • The landlord suing the tenant for damages
  • A lower credit score
  • A potential bad reference in the future 

Can the Landlord Keep the Security Deposit?

A landlord may keep all or part of the security deposit when a tenant breaks a lease early. How much the landlord keeps depends on the amount of damage the tenant caused or how much remaining rent there is. 

The landlord can deduct from the security deposit the amount of rent the landlord loses until a new tenant starts paying. When the owed rent becomes bigger than the security deposit amount, the landlord can hold the tenant liable for the difference—assuming the landlord has made a reasonable effort to re-rent the unit.

Likewise, a landlord may deduct any property-related damages the tenant committed from the security deposit. The damage must be caused by the tenant’s negligence or carelessness and not from normal wear and tear.

Can the Tenant Be Sued for Damages?

If a tenant breaks a lease early, the landlord can sue a tenant for a breach of contract for the remaining rent due or for any property damage. Claims for damages will generally be brought in Small Claims Court, which can be found in the jurisdiction in which the landlord lives.